BI Chinese station in December 16
Like Netflix, Prime and Hulu that Amazon Streaming Media VOD service each year to spend billions of dollars to the major movie studios to buy content licensing. In the past two years, with the market competition heating up with various Streaming Media VOD service providers want to sign an exclusive licensing agreement content authorization transaction prices have gone up.
Now, this field may also usher in a powerful competitor. According to the Wall Street Journal reported that YouTube is the major studios in Hollywood to negotiate the authorization to want to buy video content for the launch of its new YouTube Red service.
Due to the strong support of the parent company Google, YouTube in the purchase of the contents of the authority to authorize the above
Originally already very high budget will become higher
Next year, Netflix plans to spend $5 billion on content authorization to better serve domestic users and international users. This year than it is the content of the authorized spending increased by more than 50. Amazon and Hulu are expected to use this year for the purchase of content licensing fees are also at around $1 billion 500 million, but they did not disclose the details of the future of the contents of the plan. But anyway, they are sure to spend a little more of a billion dollars next year to keep pace with Netflix.
Netflix has planned a big increase in spending, as it has been prepared for the new market competition. Netflix will expand the scope of its licensing agreement with The Walt Disney Company, which will be the sole authority for all of the stories issued by The Walt Disney Company in 2016 and beyond. ("Star Wars 7: the awakening" no longer force within the scope of agreement, because this film will be issued this year.)
Netflix will also make great efforts to invest in original content. It has increased the original content of this year to about $a year, an increase of 88 over last year. Next year there will be more original content, Netflix investment in this area will be more spending. Amazon and Hulu is also the case, they are investing in the original content, in order to further highlight their own characteristics.
YouTube launched the Red YouTube service earlier this year, users do not have to open the YouTube application can also watch and download video without advertising and listen to music. It has also produced a number of original drama starring YouTube celebrities, for the exclusive distribution of Red YouTube services. But in order to make the new service to attract as many users as possible, YouTube is also considering purchasing content authorization.
YouTube launched an advertising supported free video site to the number of visitors per month to reach 1 billion people, so it absolutely has to compete with Netflix and Amazon's qualifications. Because Google's parent company Alphabet is currently holding the cash and short-term investments of up to $70 billion, so it has enough money to buy content.
The Wall Street Journal reported that YouTube is most interested in the new film and television is the exclusive right to play online, if it really signed the exclusive right to broadcast television content, it is bound to Netflix, Amazon and Hulu huge pressure, forcing the latter to produce more original content, or additional budget to purchase content authorization.
Impact on budget
Netflix has been adjusting the structure of the budget to increase the tilt of the original content, and it has been for the next year and the development of a huge budget expansion plan. After entering this field, YouTube is unable to obtain all the licensing content it wants to obtain with the existing budget. It had already suffered losses in this regard, for example, in 2013 lost Viacom, recently lost EPIX content. But Ted
At the same time, Amazon has successfully transformed Prime into a powerful competitor to Netflix. Although licensing costs may be increased because of the entry of YouTube, but Amazon certainly can afford, because the development of Prime services on its retail business also has a positive impact. Prime users on the Amazon website spending more than non users.
For Alphabet's investors, YouTube into the cost of a lot of money can help companies adjust revenue structure, but can not improve the company's profitability. However, it's a long-term strategy to compete with Netflix and Amazon and to get the users to be interested in everything that YouTube offers.