Freeband TV News

Video on Demand makes for strange bedfellows

Chris Andrews

Could YouTube end up the big winner?

There have been some interesting goings on around Video on Demand, with a kind of symbiotic content and distribution model emerging that could potentially see Google dominating yet another market segment. This relationship may also end up confirming predictions about the increasing dominance of Over the Top services, while generating substantial monetisation opportunities for on-line content.

One such going on is the landmark deal between YouTube and Channel 4 announced last week. Expected to be fully up and running by 2010, Channel 4 is making all of its content available on YouTube in the UK free of charge.

This partnership is set to run for an initial term of at least three years, though it is non-exclusive and Channel 4 can continue distributing its 4oD services through its own website and other third parties. Both companies will share advertising revenues on an ‘agreed formula’.

This may seem slightly odd from a user point of view; if someone wants to watch an episode of Skins and it’s not on YouTube, it’s not like they’re going to shut down their computer and go for a run. One would think they’ll go to Channel 4 and watch it there. But Channel 4 is hoping to tap into the 20-odd million strong YouTube community in the UK, increasing the likelihood of its programming being consumed, and hence its advertising proposition being strengthened. It will of course also be making use of YouTube’s demographic targeting tools for that advertising.

For YouTube having ‘proper content’ should increase that community, and its ability to garner future deals with other content producers, thereby increasing its ad revenues, and round and round she goes. Furthermore, YouTube is increasingly being made available as an included service on living room devices and this could make things very interesting.

Jon Gisby, director of future media and technology at Channel 4, said that the deal with YouTube would consolidate the broadcasters market leading Video on Demand position. “The deal will grow our share of the audience and enhance our advertising sales proposition. It will create new advertising inventory for Channel 4 Sales in digital media and will help us realise our ambition to be the UK’s leading sales house for video-on-demand.”

Patrick Walker, YouTube’s director of partnerships, added: “We know that the YouTube community is enthusiastic about full-length programming on the site, and we’ve been working hard to create the right environment for more broadcasters to make their content available with the right branding, the right advertising formats and the right level of control over advertising sales.”

In a similar vein, Samsung has announced that Amazon’s Video on Demand would be available on its high end HDTVs through a downloadable widget as part of Samsung’s Internet@TV line-up. There is no subscription and customers can rent or purchase from Amazon’s digital video catalogue of over 50,000 titles, including new-release films and day after TV episodes. Purchases are stored online in their Amazon Video On Demand video library, which also enables access to videos from other devices.

And Broadband-connected TiVo DVR subscribers in America will now have access to the Blockbuster On Demand rental service, in addition to content from Netflix, which streams films and television shows for no additional fee beyond TiVo’s unlimited-plan charges, and Amazon Video On Demand as well.

Both Samsung’s Internet@TV line-up and TiVo also provide access to YouTube content, and one can’t help but wonder if Google, which just announced third quarter revenues of $5.94bn, has done it again. If the Channel 4 deal starts the ball rolling and further broadcasters agree to distribute their content through YouTube, and if YouTube can crack the American broadcast market, then we could be looking at a VoD goliath in the making. Imagine what this will do to subs, and OTT content for that matter, if every broadcaster were to make its catalogue available on YouTube, which people can now easily watch in their living rooms. Scary stuff.

© FreebandTVNews

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