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YouTube Meets Hulu, Sort Of; Shows Premium Pay Potential

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imageYouTube is going live with a new way to look at “thousands of television shows,” a better landing page for movies (expanded from a few dozen to a library of hundreds) and a wider rollout of in-stream ads. Studios signing on to the U.S.-only service include Lionsgate, MGM (the original Casino Royale) and Sony (NYSE: SNE) Pictures through its Crackle unit.

What it’s not: a massive redesign or the launch of a premium pay area. But Google (NSDQ: GOOG) CEO Eric Schmidt hinted at the possibilities during the company’s earnings call, referring to upcoming plans for micropayments and subscriptions on YouTube.

By adding new “shows” and “subscription” tabs on its front page, YouTube continues its quest to prove to entertainment companies that it can be a showcase for more than cats on skateboards and to advertisers that it can be a place to reach valuable viewers. But it will have to make the case for now without a lot of new current content, relying on library shows — and demonstrating why a full-episode deal with ABC or other major networks for primetime programmer matters so much.

This may be a trajectory YouTube had to be on but it’s hard not to see it as a response to the popularity and increasing power of Hulu. Yes, YouTube runs far ahead of Hulu in all the metrics but it’s not the destination for professional content online. Until today, YouTube had only a dozen or so movies; now execs say they will have hundreds. The number of TV shows has expanded but not the currency — the only new full-episode show we heard about during a press call was new CBS (NYSE: CBS) series Harper’s Island. The movies are a mix of classic, cult, documentaries and, well, old. (Our “first look” review.)

The change adds a new Shows tab to the front page that YouTube hopes will help people think of the site as a destination for professional entertainment content. It also adds a Subscription tab for quick access for logged-in users.

Content partners will have the flexibility to use their own players, continuing a transition telegraphed by offering an embedded Microsoft (NSDQ: MSFT) Silverlight player for’s NCAA March Madness on Demand and the recent agreement with Disney (NYSE: DIS) to use let ESPN use its own player on its new YouTube microsite. x

Content partners: Crackle/Sony Pictures, CBS (library and one new show), MGM, Lionsgate, Starz, Anime Network, Cinetic Rights Management, Current TV, Discovery (NSDQ: DISAB), Documentary Channel, First Look Studios, IndieFlix, National Geographic.

— BBC Worldwide wasn’t on the official list but is part of “Shows.” Snag Films is also there.

4 Responses to “YouTube Meets Hulu, Sort Of; Shows Premium Pay Potential”

  1. Quick, Google has worked something out…..

    Since allowing all and sundry to post video and with no major income coming in, they decided to incorporate the adsense junk it has been making everyone believe is a good income provider.

    The one major reason they have tied the relationship with some of the industries largest streaming companies is because whilst they have been sitting on the fence trying to calculate the next move, people like uStream have jumped in and showed them just how it should be done.

    Good for uStream, maybe this will kick Google into shape and bring back something that is of good use and not just an internet marketing paradise.

  2. Google buys You Tube for 1.5 billion in 2006, they loose 600 million in 2007, and 500 million in 2008, realizing that advertising revenue will never get them to a break even less a profit. Streaming cost represents the lion’s share of You Tube cogs. The only way to get the company to profitability is by charging for its streaming cost, hard to believe it took them two years to figure this out. But as in many internet business, many never had a business model.

  3. patricia

    I don't think it's so much in response to Hulu or because of Hulu. It's more in response to what's ahead for the internet, and particularly, television.