In a move directed towards competing with Netflix, Hulu, Apple (iTunes), Amazon and other video-on-demand services, Google recently announced movie rental services for YouTube users in United States. This mean the war is heating up in web video market. Entertainment-content-delivery-on-IP is THE future, no option to it. Cable TV, RIP!
Netflix which had a fabulous Q1 of 2011, reaching 23.6 subscribers in the US (outnumbering Comcast’s subscribers) & the always-improving, ever-growing Hulu are bound to be affected. It was because of this scare (from YouTube & other biggies) that Netflix shares went down 5% after it announced impressive Q1 results.
1. Reasons behind Netflix’s astonishing success (and how YouTube intends to compete)
- It’s fee-based subscription model with diverse availability of content to choose from. YouTube movies on the other hand are on-demand/rentals, more like iTunes.
- Its super awesome quality of the content. I have been using both Netflix & Hulu for more than a year now and I don’t remember of any glitch or streaming issue. YouTube’s famous bandwidth hogging is a dampener (although I should admit there has been some improvement on this front recently).
2. YouTube belongs to Google (Yes baby, smear campaign or not – people are scared of Google!)
Already a few Hollywood studios have refused to join YouTube and the too much policing on copyright issues have not gone down well with YouTube users. It is not going to be easy for YouTube either, but then no success comes easy. Advantage Netflix!
3. Omnipresence of YouTube
Arab revolutions used YouTube. Japan tragedy was all over YouTube. Iran pro-democracy protesters used it. European protests against austerity measures were on YouTube. Its 500 Million subscribers (of course, ‘free subscribers’) around the world give YouTube a huge penetration into emerging markets. In the long run, it is going to be extremely difficult to surpass for Netflix/Hulu etc. Do I see consolidation in the market?
Note – even HBO is online, everywhere. Never ignore the dark horse!
4. What else would YouTube wanna do?
- Warner Bros, Sony, Universal have joined the YouTube team. Even a few educational institutes have. Education-future-is-in-online-videos may turn out to be a great idea.
- Currently, there’s no famous artiste to perform in the YouTube team. It’s understandable since it’s just a move-rental service as of now. Going forward, it needs to learn from Vevo’s deals with artistes & athletes.
And finally, the future of TV (more-on-web):
With products like Boxee box (that kills cable), NewTeeVee (for Tech news), Apple TV (partnered with Netflix), we’re seeing a change in the way entertainment is driven off internet. Key partnerships (like Netflix with Sony Playstation) are going to prove vital.
Our living rooms are going to be owned by internet biggies – Google, Apple, Facebook & Amazon.