As if the poor (well not really) cable companies don’t have enough trouble, looks like a lot more is going to be heaped on them. Google/YouTube is ramping up to take them on. –
Google Inc. is working on a major overhaul of YouTube as it tries to position itself for the rise of televisions that let people watch online video in their living rooms, according to people familiar with the matter.
YouTube is looking to compete with broadcast and cable television, some of these people said, a goal that requires it to entice users to stay on the website longer, and to convince advertisers that it will reach desirable consumers.
The site is planning a series of changes to its home page to highlight sets of “channels” around topics such as arts and sports. About 20 or so of those channels will feature several hours of professionally produced original programming a week, some of these people said. Additional channels would be assembled from content already on the site.
It is planning to spend as much as $100 million to commission low-cost content designed exclusively for the Web, people familiar with the matter said.
Now were I cable co exec I would be a little worried. Google is not infallible but quite honestly their track record is such that if I found out they had entered my industry segment I would be looking for an exit strategy. Its not that Google is genius, its that they have deep pockets to stay in for the long haul.
It will be interesting to see if their ‘channel’ concepts holds up. Our take is that channel based offerings have just about run their course. When compared to Hulu and NetFlix which is on demand, anything else seems old hat.
Cable Cos/Verizon/AT&T have to come to face to face with the idea that they have to compete on the basis of being a data carrier on the last mile local loop. The content side is getting crowded now and it won’t be long till we see a fall out by weaker players.
Which to a thought makes DirectTV’s move riskier than ever. They don’t have the chops to weather a price war in the streaming space.