YouTube is looking to challenge some of the top dogs in television entertainment with a new venture into the streaming business.
YouTube is seeking streaming rights to TV series and movies for its new subscription service called Red, reported The Wall Street Journal. The move would place YouTube in direct competition with streaming services such as Netflix and Hulu.
YouTube executives have recently met with several production companies in the hopes of negotiating licenses for new content, unnamed sources told TheWSJ. YouTube’s vice president of original content and vice president of content partnerships were involved in the discussions. (RELATED: US Appeals Court: High Standard Set In YouTube Takedown)
According to the sources, there is the potential for YouTube to gain exclusive streaming rights to the shows and movies, even if the shows are released through movie theaters or cable networks. “YouTube is still deciding how much content to license, but it is eager to have a robust collection of original programming and licensed programming in 2016 and beyond,” reported TheWSJ.
YouTube’s Red is a deviation from the company’s traditional free video content. Red is a subscription service that provides users with ad-free video, free access to Google Play Music, and a host of other customization options for $9.99. The service was launched Oct. 28 and reportedly could be making as much as $350,000 per day.
Though YouTube is a little late to the streaming service party, its impact in the market could still be felt by the likes of Hulu, Amazon, and Netflix. (RELATED: Facebook Tests Video Features That Rival YouTube)
“Hulu is expected to double spending on content this year to $1.5 billion, putting it roughly on par with Amazon, though still behind Netflix, which is expected to boost content spending nearly 18% to $3.3 billion,” reported TheWSJ.
But, YouTube entering the streaming service could cause prices to spike or send companies into a mad rush to sign exclusivity deals. Mark Terbeek, a partner at venture-capital firm Greycroft Partners, told TheWSJ: “I see YouTube as a legitimate threat to Netflix and Amazon and Hulu.”
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