Google is preparing YouTube to take on both cable and broadcast television with original programming on a set of channels aimed at sports or entertainment.
The report from the Wall Street Journal says that Google will be spending up to $100 million on the low-cost content produced for the Web. And if you know Google, that's basically lunch money for the company -- an amount that can be easily spent or lost on a whim. In the past, Google doesn't want to pay content licensing fees like streaming company Netflix, yet has been in recent talks to license content from Miramax.
Since Google bought YouTube for $1.65 billion in 2006, it hasn't quite known what to do with it. While it could have gone the way of premium pay channels like HBO or Showtime, Google has decided to create channels and rely on ads in a kind of more structured Hulu. Google's plan is not to make YouTube a premium or even cable channel but a newer, leaner network channel.
Perhaps Google took note of FunnyorDie.com's content and hopes to gain access to those creators. While $100 million sounds like a lot, it isn't when a network is starting with no programming at all. While YouTube hopes to gain programs with Hollywood stars and directors, it's likely that most of the new content will be from unknowns and student directors. For whatever reason, it's how the business model works -- pay for a few big names and production values and peanuts for he rest. The good shows will rise to the top, while the others (including a few of the ones with big production values) will disappear.
Can YouTube get past its image of amateur videos of cutesy animals, laughing babies and accidental injuries to capture a national audience for its programming? Perhaps, but I wouldn't bet on anything approaching "Masterpiece Theatre" in the near future.