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Three US studios reluctant to join YouTube VOD
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Three US studios reluctant to join YouTube VOD - 27-April-2011, 13:00

Published: 20.55 Europe/London, April 26, 2011

Three major studios are not yet ready to supply their content to YouTubes planned premium VOD service, according to Hollywood blog The Fox, Paramount and Disney are holding back their content, while Warner Bros., Sony and Universal reportedly have signed a deal.

YouTube is to take on US movie-rental services such as Netflix, iTunes, Hulu Plus and Amazon with its own VOD service, in a move to shift focus from user generated content to professionally produced premium content.

Googles YouTube is by far the best watched online video portal with 130 million unique viewers monthly and offering premium content could potentially bring big benefits for both Google and the studios. But Fox, Paramount and Disney seem to be worried Google and YouTube are not doing enough to fight piracy.

Meanwhile Netflix shares were down about 5% after releasing its Q1 2011 figures, which showed that the company reported an 86% jump in first-quarter profit as revenue surged 46%. Netflixs video subscription service drew 3.6 million more customers, making its US audience roughly the same size as the countrys largest cable operator, Comcast Corp.

Despite these impressive figures, insiders are worried that Netflix will suffer from increased competition, such as the planned YouTube VOD service as well as the probability that content owners migth want to hikes their fees for delivering content to the online video service.

In a letter to its shareholders, Netflix is also downplaying its role as a cord-cutter. Simply put, the data shows that Netflix is a supplemental channel to MVPD (Multichannel Video Programming Distributor, or distribution platform as we would say in Europe). While Netflix is likely to show huge growth again this year, we think MVPD cord cutting will be minimal to non-existent. We hear some stories from customers who have Netflix and no MVPD service, but these are generally people who rely on free broadcast TV (which is now in HD) and supplement with Netflix, rather than switching from MVPD to online.

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