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This is a REAL potential game changer and I've been patiently waiting to see how long it would take before a major internet video streaming company made this move.

The underlying reason for Netflix's current woes is because CONTENT producers are squeezing it to them and will be increasing their prices significantly in the next year. The reason Hulu wasn't acquired even though many companies considered it, was because the CONTENT producers (who also happen to currently own Hulu) planned on increasing their prices to anyone who was dumb enough to buy Hulu without long term costs locked in contractually.

With this move, Google is moving to consolidate distribution as well as content production into Youtube. The significance of this can't be underestimated. If YouTube can produce a hit show, there's no middle man to step in and charge them arbitrary licensing fees to host the show.

I don't see any reason why youtube couldn't produce a show like MythBusters or the Jersey Shore. And in a few years, maybe even a show like Breaking Bad.

Once this ball get's rolling traditional cable will be in for a rough ride.

Indeed! Especially now since there aren't any practical limits on youtube video size, duration, or quality.

There is already a lot of pretty high quality original content on youtube. Some of that content is more popular than some cable content. There are youtube channels which have weekly updates and see millions of viewers on every episode. They are under the traditional media radar though since they don't have a promotional budget and they don't appear in a program lineup anywhere.

This trend can only accelerate from here. Producing a "show" or a "movie" requires a teeny, tiny amount of effort and resources these days, and can be done without spending more than 4 figures on equipment and whatnot.

We are nearing an inflection point in this process, soon there will be a critical mass of shows and viewers such that word-of-mouth recommendations start exploding viewership and more importantly that it begins to become cemented in the zeitgeist that making an "internet tv show" is a perfectly acceptable thing to do, regardless of how talented you are, and more so is a quite feasible thing to do. That will lead to a spiraling increase in both content and viewership which will likely catch a lot of the traditional media folks off guard. I don't think they realize that there is a bubbling cauldron out there which is poised to spew forth the equivalent of hundreds of channels of content. Content that people will watch. And talk about. And value at the same level as traditional TV content.

The biggest potential danger I see is to Google's brand image. Google is respected as producing high-quality... stuff. Television networks aren't respected because they produce... an awful lot of garbage. If google starts being directly responsible for the Jersey Shores of the world then surely their brand image takes a hit.

Producing a "show" or a "movie" requires a teeny, tiny amount of effort and resources these days, and can be done without spending more than 4 figures on equipment and whatnot.

Though it must be said that the only way you can produce a movie really cheaply is if you can persuade folks to work for peanuts in the hope of breaking into the industry.

But if low-budget stuff becomes the industry, then the supply of folks willing to work for nothing in the hopes of being the next George Clooney will die up when George Clooney starts taking home five hundred bucks a film.

Good point, that is a concern. Maybe google should create a subsidiary brand for just that purpose.

As far as low-budget productions, I think you're looking at it from the wrong perspective. The key is lowering the cost of entry. What this enables is not just "low-budget" productions but also "start-ups" with members who have decided to defer compensation in exchange for equity in the "start-up". This is the dominant way that bands get started, for example.

> This is a REAL potential game changer

There is one problem. Google is going to spend $150 million on content, to earn about $10M in ad sales, and then will cancel the program. Cable companies charge an average of $1000/year per household and have 90% penetration. The economics of web video just can't compete.

It's up to traditional cable companies to embrace this disruptive technology we like to call "the internet" and find a way to build a better business model using it. This would inevitably undercut their own "traditional" models for content delivery, but as more and more people cut the chord because more options are available, their refusal to innovate simply means that other players are going to come in and take the share they could/should have had.
I think it will be the extreme exception for them to embrace it. I'm not even sure if they are capable of doing so. So much of the way the cogs mesh together in the traditional tv business world is very much dependent on the technological limitations and specifics of broadcast television. They would have to change so very much to adapt. A lot of that change would have to be shrinking, which they will fight.
From the comment section:

"Welcome to the end of middle class jobs in the entertainment industry. These shows will be non-union with corporations using shell corporations to produce them for Google. Everyone (directors, writers, actors, and crew) will be paid pennies on the dollar.

People who think the Entertainment Industry is full of fat cats don’t realize that show business is just like the rest the US economy right now. One percent earns a huge share of the profit, while the rest fight for crumbs, and this is another strong move in that direction. This isn’t a screed to support unions, it’s a screed about the reality of the loss of America’s middle class. It’s been going on for thirty years and it gets worse every day."

Are good directors/writers/actors/etc that easy to find that you can pay them "pennies on the dollar" and still produce a high quality product?

All it takes is for some of them to be out of work and be willing to work for the offered amount. It's like Huffington Post firing everyone, getting people to write for free, and offering to let old writers interview for their old jobs at no pay.

Your product doesn't have to be good, just good enough. The viewers will follow, and soon a new standard is set for wages.

I'm reminded of video game programming, which has lower wages than other fields for programmers. Why? More people want to do it. They're willing to work for less. Now consider how many people want to be famous actors and directors.

The very best of youtube for me as a wannabe, spareroom, hacker is the independent channels. You just can not beat them. For instance, the Geekgroup (great channel) which as far as I can make out is very well funded just doesn't hold a candle to the likes of Photonicinduction, bkraz333, Afrotechmods, jeriellsworth, UnknownLobster, et al when it comes to raw talent.

If I was the head of this google project I'd get in bed with the raw talent.

Wow, thanks for listing all those interesting channels. I've been looking at some of them and they're great! One I'd add is called "Smarter Every Day" by a destinws2. He's an aeronautics engineer, I think, but mostly shoots guns with a high speed camera. He always includes interesting science, though, too.
I'm really interested to see what level of audience interaction these "professional" channels will use. TV is by its nature a one-way medium. YouTube allows for much greater feedback from your audience, and it's that sense of community coupled with content that has made hugely popular YouTube channels and celebs.

Will traditional, professional channels simply try to move the content online and not take advantage of the new features that they'll have access to ?

One of the differences between tv and Internet is that tv channels have an oligopoly on your attention. There's a small limited number of channels competing for attention across all tv viewers. YouTube has to compete not only against millions of Other things on the net bit also millions of other videos on YouTube itself. It'll be interesting to see if the tv model of taking large million dollar bets on unproven shows works here.
there is also attention lockin, once you start watching a show, there are a lot fewer distraction.
I think many of you have severely misread this article.

This isn't about Google creating content, this is about Google partnering with production companies who will provide the content.

Now, don't be surprised if you see Google make more company related content, but it won't be Google-owned and ran soap operas or anything. At most I expect more meta content, say a promotional guide channel like many stations offer.

Great, 25 more channels of the like that makes up 90% of cable television.

Please, Google, give us ESPN. People will literally throw money at you.

Sports are keeping the traditional cable model alive. I would love to see somebody negotiate streaming deals with the NFL.
I think when more traditional celebrities inevitably begin to transition over to content targeted specifically at internet audiences, the revolution will begin. Google has the power to nurture raw talent, as well as attract artists who have already been vetted by traditional media into the new media sphere.
Yep, this is true. A friend of mine is producing one of their channels (deal has been signed). Exciting!
Very! What I wouldn't give to be in a production company entering into this!

I'm sure there will be some original problems, but by far and large the problems of production are solved ones. I bet it would be like being in a startup with a quarter of the unknowns.

As a fan of Thisweekin I would like to see how they respond to this move.
I'm also a fan and I expect (and hope) they are vying to be a part of it. I watch a significant proportion of my Theisweekin content straight from YouTube. Above all else, this announcement (even a the rumor stage) is a huge validation of the internet as a distribution channel for professionally produced original content. I believe Jason Calacanis bought off on that a while ago with the investment in ThisWeekIn.
Google producing creative content? What could possibly go wrong?

It will be entertaining to see how they A/B test the color of the clothing the actors wear for maximum effectiveness.

You joke, but I watched "How Did They Ever Make a Movie of Facebook?" (a making-of doc about The Social Network) and it blew my mind a little bit seeing the process of test-shooting the wardrobes and makeup.

Ah, here's a clip online: http://www.imdb.com/video/imdb/vi1594268185/ ...skip to 6:45

There's a quick cut in there where there's a table with what looks like a hundred pairs of watches.

Thanks for mentioning that. I didn't know about it. Ended up watching the whole thing tonight. I found it fascinating. Great to see what goes on behind the scenes..

If anyone else has documentaries about film-making that they can recommend, I'd love to hear your picks. Thanks.

The entire second disc of The Social Network is filled to the brim with making-of stuff of similar caliber. I know I'm never going to be a filmmaker, but I really get sucked into that sort of thing.

The super mega edition of Blade Runner (with the three or four different cuts) also has a very, very expansive set of documentaries, which cover not only the making of the film (hiring writers, chasing down financing, creating the effects, etc.) but the arduous task of making the re-release. The range of people involved that they talk to goes from the riggers and everyday film crew to the financiers who seemingly didn't much care what it was about so long as it made money.

How will Google be able to stick to their the "Do no evil" mission statement when trying to dip into Hollywood's koolaid?