YouTube Taking the First Steps to Produce In-House Content

For years now, YouTube has been seen as a well-known and trusted video sharing website.  In fact, the site has become a de facto of forms for video storage and distribution, and has only grown larger since Internet giant Google purchased the site in 2006.  One of the most important aspects of YouTube has been the fact that the company has stayed out of the production aspect of videos, and has rather focused on providing the most robust, stable, and feature-rick video service out there.  This has allowed users such as you and me to be the directors; producing and uploading content as individuals.  YouTube’s implementation of this philosophy has been the driving factor in letting a great number of “YouTube celebrities” obtain the status and relative fame that they have today.  However, it is now rumored that Google is looking to purchase Next New Networks; a production company that owns a number of web-based television networks.

While the exact details have yet to be published (or even confirmed) by either Google or Next New Networks, The New York Times is claiming that they have two credible sources; both of whom are incredibly involved in the issue.  Because of the reputation and credibility of The New York Times, I am have faith that they have checked their facts and that the deal will actually go through.

However, the fact that Google appears to be looking to purchase a production company means that YouTube is trying to move away from simply hosting the content, and would like a piece of the production pie as well.  When evaluating the fact that web-based television appears to be the future, I definitely can understand why Google would want to make this venture for YouTube.  After all, YouTube would sure be a lot more profitable to Google if the company could make better money on advertising revenue by better incorporating advertisements.

It’s important to note, however, that online streaming giant Hulu started out in the same fashion by making their profits purely through advertising revenue.  However, this year Hulu introduced “Hulu Plus“; a streaming service that offers a larger selection of shows and content for $8 per month.  Personally, I feel that Hulu went this route because they realized that it was going to be extremely difficult to cover their costs (much less turn a profit) by relying on advertising alone.  And seeing as how Google and YouTube are already established and recognized, I am sure that they would have no problems in setting up a YouTube “premium” service.

Combine this with the success of Netflix, who has recently introduced a streaming-only plan, and it’s obvious that Google feels the need to enter the web-based streaming market as soon as possible.

At the same time, I am also a bit concerned with what in-house content on YouTube would do to the existing community.  Would existing “shows” and “podcasts” be pushed aside in order to make room and better promote YouTube-produced content?  In my mind, this would be one of the worst things for Google to do, because they would be sacrificing an existing success in order to take a gamble at a venture that they wouldn’t be guaranteed the same success in.  This is a point that I recently portrayed when discussing Google’s potential for creating a wireless network, and what that action would do to the progress they have already made with the Android OS.

At the same time, recent actions on the part of YouTube – such as the elimination on time restrictions on videos – suggests that the video sharing site has a renewed appreciation for their user-base.  Does this mean that Google could potentially have the best of both worlds?

At the end of the day, this is definitely an interesting topic, and only time will tell how successful this new venture will be for Google – or if it will even go through at all.  However, the fact still remains that Google seems to want to get into the production business.  Personally, I expect to see a handful of other production-related acquisitions in the months to come.  One company that I’d like to see Google purchase would be Revision3 – a company that produces a great deal of technology-relevant videos and series.

What do you think?  Will the deal go through?  Will Google purchase more production companies?  And most importantly, how would you feel about YouTube producing their own content?  Let us know in the comments!