Written BY: Pooja. Thakkar
Google Inc. is working on a major overhaul of YouTube as it tries to position itself for the rise of televisions that let people watch online video in their living rooms, according to people familiar with the matter.
YouTube is looking to compete with broadcast and cable television, in order to entice users to stay on the website longer, and to convince advertisers that it will reach desirable consumers, reports Wall Street Journal.
The site is planning a series of changes to its home page to highlight sets of "channels" around topics such as arts and sports. About 20 or so of those channels will feature several hours of professionally produced original programming a week, some of these people said. Additional channels would be assembled from content already on the site.
It is planning to spend as much as $100 million to commission low-cost content designed exclusively for the Web, people familiar with the matter said.
What does this mean for YouTube, Google and the Viewers?
Google is hoping to carve out a niche of original, professionally produced Web videos that it hopes will cultivate loyal viewers.
YouTube's move comes as streaming video services are growing stronger, upending the way people watch TV shows. Netflix Inc. is building up a cache of TV content and movies, recently securing rights to stream the hit series "Mad Men." Amazon.com Inc. and Hulu LLC are making a similar grab. Hulu's investors include Wall Street Journal owner News Corp.
The moves are pressuring cable and satellite companies, which are developing and acquiring new services to compete.
From the beginning, YouTube also featured plenty of professional entertainment content, but it was often posted without the owners' consent. The site eventually implemented a filtering system in response to complaints from content owners.
Now, it is pursuing a middle way, investing in programming rather than spending huge sums to license it. It is aiming to create a network of ad-supported channels that users tune into and spend more time with. YouTube executives say they want people to "watch YouTube" the same way they "watch TV."
YouTube's changes are expected to be phased in over time, starting before the end of this year, people familiar with the matter said. The site is currently hiring people to help with the initiatives, these people said.
YouTube is still in the process of designing the channels and in recent weeks held meetings with Hollywood talent agencies such as Creative Artists Agency, William Morris Endeavor and International Creative Management to discuss the possibility of their clients creating YouTube channels, people familiar with the matter said.
In addition to increasing the average time a YouTube user spends on the site, which stands at about 15 minutes a day, the moves are aimed at attracting new ad dollars, including a chunk from the $70 billion U.S. television-ad market, said people familiar with the matter.
YouTube is now the world's No. 3 website in terms of unique monthly visitors.
Cable TV, broadcast and satellite TV are battling it out to dominate television broadcasting. So now, instead of 500 channels and nothing on, there will be 5 million channels, and if Google has anything to do with it, there will be something on.
