YouTube, Google TV to get upgrades
Google Inc. is doubling down on media.
The Internet search giant on Friday said it had signed major deals with Hollywood to bring professional, high-quality programming to YouTube that could help it increase the time viewers spend watching videos on the site and attract more advertisers.
Google is putting up more than $100 million to become the cable provider of the future with 100 online video channels for YouTube, some of which will feature celebrities such as Ashton Kutcher, Amy Poehler and former NBA star Shaquille O’Neal.
The Mountain View, Calif., company also took another step in its quest to bring the Internet to television screens by announcing it was rolling out a software update to Google TV, which runs on Sony televisions and Logitech set-top boxes.
Google TV has not lived up to the hype that accompanied its launch last year.
Google, which has had an uneasy relationship with Hollywood for years as it has tried to boost its television advertising business and viewership of YouTube, has faced resistance from major networks worried that Google TV would eat into their business. The networks also say Google has not done enough to block pirated content.
Now it looks as though Google is relying on YouTube as an anchor for its television strategy. YouTube plans to encourage users to subscribe to the channels, each of which will contain hours of programming.
The partnerships that YouTube announced Friday with dozens of media companies, production companies and online-video creators will generate about 25 hours of new programming each day for YouTube.
Google is planning to share ad revenue with content creators. It’s expected to give some of them as much as 55% of the proceeds after YouTube recovers the cash advances it paid out to producers. The split is considered generous in Hollywood.
The first channels will begin to appear on YouTube next month. One of them will be from Dan Cutforth and Jane Lipsitz, co-founders of Magical Elves, the television production company that for five seasons produced the Bravo reality series “Project Runway” and is developing a reality show for NBC called “Fashion Star.” Cutforth and Lipsitz will create a fashion channel for YouTube in association with InStyle magazine called “Little Black Dress” that they hope will appeal to a broad audience from teenagers to adults.
“It’s a great opportunity to incubate talent and really creative ideas that can then potentially have a life elsewhere,” Cutforth said.
Michael Eisner’s digital studio Vuguru is working in collaboration with Stan Lee’s POW Entertainment to create a YouTube channel called “Stan Lee’s YouTube World of Heroes,” which seeks to tell stories with the comic book legend’s unique voice.
“Every story has a hero,” said Vuguru President Larry Tanz. “Stan Lee created that first unlikely hero with flaws…. Every story will have that Stan Lee kind of humor and fun and fantastical elements.”
In a blog post, Robert Kyncl, YouTube’s global head of content partnerships, said the expansion is “to bring an even broader range of entertainment” to YouTube, which is best known for its user-created videos. “For advertisers, these channels will represent a new way to engage and reach their global consumers,” he said.
Google’s retooling of Google TV is also part of that push. The new version unveiled Friday has a simpler interface and new features that make it easier to browse the Internet for movies, television shows and videos. But analysts said the update probably won’t sell more televisions and set-top boxes.
Google TV has not gained traction with consumers, many of whom complained that it was too complicated, clunky and expensive. IDC analyst Danielle Levitas called it “incrementally better.”
Google says it has learned from the feedback from consumers.
In an interview this week, Rishi Chandra, director of product management for Google TV, said Google was not looking to replace broadcast or cable TV but rather to give viewers access to millions of channels the way cable gave viewers access to hundreds.
“Google flat out did not understand the media business and did not get the right partnerships in place,” Gartner Research analyst Van Baker said. “Google is a technology company, not a media company. They are going to have to learn to walk before they can run.”
Chandra says Google has tempered its expectations for Google TV in the short term.
“It’s a marathon, not a sprint,” Chandra said.
It’s a marathon fueled by big ambitions. Google hired Kyncl, one of the key architects of Netflix’s popular on-demand streaming service, as its ambassador to the studios to build bridges and craft deals. And it tried to buy online video site Hulu, which is owned by News Corp., Walt Disney Co., Comcast Corp. and private equity firm Providence Equity Partners.
Google is priming the advertising pump for when a critical mass of consumers watch online video on their television screens. The venture into TV has sharpened competition with Apple Inc. and Microsoft Corp.
It’s unclear which of the technology players looking to crack the market will deliver on the promise of Internet television: the ability to watch any movie or show at any time streamed over the Web. Google already faces stiff competition from Microsoft with its Xbox gaming console and set-top boxes from Apple TV and Roku.
“The reality is that Google does not know all the answers. There are a lot of different players doing different things and they are all exciting,” Chandra said. “They all validate the future we see of the Internet as a much bigger part of the TV experience.”
The latest version of Google TV is built on a new operating system: Android’s Honeycomb. And it has new tools for finding and recommending movies, TV shows and online videos, and makes it easier for software developers to create new apps for the television screen. Google has also redesigned the YouTube app to make online videos look like TV, not like the Web on TV.
The software upgrade will roll out to people who have Sony televisions on Sunday and to people who have Logitech devices thereafter, Google said. Google will roll out new devices from Samsung and Vizio in 2012.
Analysts say the new version is a step in the right direction but won’t win over consumers yet.
“Is this going to cause everyone to race out and buy Google TV? I don’t think so,” Baker said.
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