We've already reported about the news that Google is planning an expansion of its current video rental service to be ready by the end of the year. Despite the fact that YouTube is owned by Google, which gives it a huge advantage in terms of Internet search traffic, how will Google transform a service associated with free content to a pay-per-view service? And how will it compete with Netflix?
YouTube is pay-per view; Netflix is subscription-based
The structure of YouTube’s current pay-per-view rental service involves a small but respectable number of TV episodes and movies available to stream for varying prices and viewing windows. The current range appears to be from $0.99 to $3.99, with viewing windows from 24 hours to 7 days. The new service would emphasize a higher $5 price point with windows likely in the 48 hour range, though Google would still leave the decision on price and viewing time to the providers themselves.
The big potential demerit for the service is that many consumers may balk at paying $5 to deliver a new release to their computer—not their TV. New TVs exist that can stream Internet content, but the connectivity of even HDTVs as little as a year old is fairly sparse. Netflix, on the other hand, is heavily integrated with many existing Blu-ray and DVD players, the Wii, the Xbox 360, the Playstation 3, and the popular Roku set-top box.
For many consumers, the Netflix pricing structure is a much better deal than Google’s planned pay-per-view service. Unlimited streaming content is included with any of their disc in the mail subscription services—starting at $9 per month. A small monthly fee versus $5 per view? How will Google succeed?
It might fail in the end, but the planned YouTube service does actually have an advantage in its higher price. By offering a higher price and limiting it to pay-per-view, Google can get all of the studios on board. In contrast, though Netflix offers a huge catalog via disc, its streaming service is often missing the most popular releases. In other situations, moves have been available for a brief period, then will disappear. Any Netflix subscriber will also tell you that trying to get new releases by disc can involve very long waits depending on popularity within each regional distribution network.
Piracy is also a potential issue. Netflix’s streaming service uses DRM to protect the source file from piracy—and Google is likely to do the same. Still, given the fact that there are well-known (and numerous) workarounds to manually download videos from YouTube’s free service, it’s unclear how effective Google will be in their new paid venture.
Streaming is different from a full download, but the data still passes through RAM, which means an inventive programmer will eventually produce a way to encode the stream to memory. Given the MPAA's aggressive anti-piracy stance, any public terms of the agreements now being negotiated will be particularly interesting to analyze.
Comment and add to the story without registration, but keep the comments meaningful please. Links are not accepted.
