3 Ways to Make YouTube a TV Player

Here's the way Google can stay ahead of the game

   

3 Ways to Make YouTube a TV Player

Of all Google’s (NASDAQ:GOOG) many properties, YouTube is second only to the company’s eponymous search engine in terms of mindshare in global culture. It’s all the more baffling then that Google has never figured out how to make money off of it.

But credit the company for not giving up. According to a Thursday Wall Street Journal report, YouTube is getting yet another make over as Google strives to transform its online video site into an entity that can fend off challenges to its home front at the same time as stake a claim in the new television market.

The new YouTube will reportedly be built around “channels,” reorganizing the website’s massive archive of user-curated and branded video content into digestible categories such as sports and entertainment.

These channels will be more than organizational tools to separate the wheat from the chaff — about 20 of them will host professional original content aired on a weekly basis, content that has Google planning to spend $100 million for developing.

With this and past initiatives, Google is looking to wage war on two fronts. The company’s international prominence in web video is under threat by companies like France’s Daily Motion and dual Chinese juggernauts Youku (NYSE:YOKU) and the Baidu (NASDAQ:BIDU)-owned Qiyi.

Secondly, Google is trying to find a place is the emerging new television market spearheaded by companies like Hulu (owned by television old guard Disney (NYSE:DIS), News Corp. (NYSE:NWS), and Comcast (NASDAQ:CMCSA), Amazon (NASDAQ:AMZN), and frontrunner Netflix (NASDAQ:NFLX).

A channel-based YouTube will go a long way toward marrying the classic conception of a web video portal with a more familiar streaming-television packaging for users.

But that’s not enough. Here are three other ways Google can employ to maximize YouTube’s chances of success in the current video market:

Rebrand Google TV

Google’s Internet TV platform, and its attendant devices from Sony (NYSE:SNE) and Logitech (NASDAQ:LOGI), got off to a rough start last fall, coming under fire from content providers like NBC, Fox, and ABC, as well as critics who said the software simply didn’t work as promised.

The new YouTube offers an opportunity to transform its content and software businesses in television. Rebranding Google TV as YouTube will make the service more inviting and understandable to consumers at the same time as providing an ideal platform to change YouTube from an entity associated with the Web and connected devices to one with the living room.

More exclusive content for free

Exclusive and original content are fast becoming the heavy artillery among streaming-TV providers. Netflix made headlines this year scoring an original series developed by David Fincher and Kevin Spacey, as well as exclusive rights to Cablevision (NYSE:CVC)-owned AMC shows like Mad Men. Hulu recently stole away the Criterion Collection film library from Netflix.

What distinguishes YouTube from these services is that it is purely free, and that will work to Google’s advantage. Google has already made strides to provide many Hollywood movies for free in its August 2010 deal with Lions Gate Entertainment (NYSE:LGF) and Sony Pictures. Google could lure audiences away from Netflix and others by providing advertising-supported content free of charge, even outdoing Hulu if the right content is acquired.

Curate user-generated content

YouTube’s identity as an open forum for the average person is both a boon and a liability for Google as it looks to become a bona fide player in television. The key is not to make the user-generated side of YouTube a separate entity, but to find a way to curate and package that content for a living room audience. Viacom’s (NYSE:VIA) Comedy Central has had great success with programming like Tosh 2.0 that transforms user-made online video into something suitable to a traditional television format. It will be Google and YouTube’s task to make sure that its original programming works to the same end.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, http://investorplace.com/2011/04/3-ways-to-make-youtube-a-tv-player/.

©2014 InvestorPlace Media, LLC

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