Friday, November 26, 2010

YouTube Looking to Acquire Movie Rights

In an effort to gain access to premium content for YouTube, Google reportedly is negotiating a deal to obtain the digital rights to the Miramax library, which has over 700 films, including 'Pulp Fiction' and 'No Country For Old Men.'

Walt Disney Co. (DIS) is expected to close a deal to sell Miramax to Filmyard on December 10. Google is talking to Filmyard about gaining access to the Miramax library.

With Netflix also dramatically stepping up its efforts to secure content rights, it should be clear that a bigger shift to online video will occur only partly as better access connections and applications are created, and primarily as content owners are willing to license their content for online distribution.

The need content distributors will have to monetize their investments virtually ensures that a future online distribution ecosystem will include "for fee" access. People will change the name on provider payments, but users will pay for access to professionally-produced content, directly or indirectly. What isn't so clear now is whether access to that content will necessarily be "less costly."

When switching from multichannel video service to some form of over-the-top viewing, one also has to factor in the additional cost of bandwidth on a recurring basis, and the business interests of ISPs who might already be making money from multichannel video as well. They won't have much incentive, if any, to allow substitution of over-the-top viewing in ways that cannibalizes the existing business.

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