THE REASON FOR THE DEAL between Internet advertising broker Google and the US telecom operator Verizon is becoming clearer, with Google eyeing pay-per-view Youtube videos.
Having spent $1.65 billion to buy the video sharing site back in 2006, Google obviously wants to make that investment pay off. Apparently it thinks that working with movie studios to flog full-length films as videos through Youtube will mean it can charge punters a monthly subscription for access, similar to Lovefilm or Netflix.
Streaming video content would tie in quite nicely with Google's recent deal with Verizon to gut net neutrality. As we predicted, it is likely that Google will be looking for major Internet service providers (ISPs) to deploy some sort of quality of service (QoS) regime to ensure traffic from Youtube is handled at a higher priority than others. Any such QoS management should mean that paying users will experience less jitter, the term given to dropped video frames, however it does bring up the question as to whether any smaller competitors will be able to compete with Google and Youtube in this market.
The rumours come as Blockbuster gets ready to file for bankruptcy, as online services have rendered it unprofitable. Google's move will not only put it in competition with Apple's Itunes and other film distribution services, but could also provide a video store for the growing army of Android devices.
If Google does launch such a service, it will surely pave the way for others to try to cut deals with ISPs to remain competitive against arguably the Internet's biggest brand. The question is whether anyone else except for large multinational corporations can come up with enough cash to appease the major US ISPs such as Verizon, AT&T, Comcast and Time-Warner.
These arrogant companies haven't managed to roll over the US Federal Communications Commission yet, but they must believe it's inevitable that they will get away with that, because apparantly they're already plotting commercial deals to carve up the Internet and turn it into an analogue of cable television. µ
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