Squeezing The Tube

24 01 2010

It must be nice to be rich. Having a ton of dough allows one to shop at will and buy things for no apparent reason. When you control the purse strings, you can do pretty much what you like, even though others may wonder what you were thinking.

Kind of like what has been going on ever since October 2006 when Google paid $1.65 billion for YouTube. What in the world could they possibly have in mind for what has become the ultimate time-waster?

Apparently a lot. Never under-estimate Google, because, like Walmart, their goal is total market domination. Watch out Blockbuster and Netflix, because Google wants a piece of your pie. Maybe even the whole thing.

Google is now going to start renting movie downloads at YouTube, beginning with Sundance Film Festival. It hopes that movie studios will take note and allow them to start pushing anything and everything through the internet pipe.

And this must have stockholders giddy with anticipation. While few would argue that Google is really just one big advertising agency (in spite of its pre-eminence as the search engine of choice for most), it is the prospect of actually selling something at a Google-owned site that is new. Yes, Google sells billions of dollars in little clickable text ads every year, and YouTube has become a big billboard for all manner of ads. But $4 downloads could add up quickly.

I swear, Google founders Larry Page and Sergey Brin must be related somehow to Sam Walton. Search long enough at Ancestors. com and I bet you find some branches that meet at the same trunk.

And in typical Google style, I also bet we will see even more integration of their slate of properties. Google’s online presence will be as much the Supercenter of which Sam Walton dreamed before he died back in 1992. One-stop shopping for everything.

The folks at Blockbuster are already shuttering 900 stores (about 20% of the chain) in response to the dent Netflix put in their can, but a new-and-improved YouTube could be the final nail in their pine box. The ability to treat movies as digital content, just like music, is an inevitable change, and anyone stuck with tangible inventory these days had better start looking for the exit. Add in handy little smartphone apps, and suddenly movies are in your purse or pocket.

It may have taken over three years for this drama to unfold, but Google is now ready to squeeze some major league wallet-greening from YouTube. I suspect it won’t be long before they update “Broadcast Yourself” to simply “Broadcast.” Because once they start sending movies down the chute, it won’t be long before TV follows.

And that’s what I’m thinking.

Dr “Should Have Seen It Coming” Gerlich

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