Facebook Encroaching on Netflixs Turf
The search engine casually rolled Google TV into YouTube, which has embarked on a number of fronts to expand beyond its amateur, short video chops. YouTube, which is hiring 30 percent more people this year, launched YouTube Next to pair professional video content with display ads. In a much more understated move March 11, YouTube began airing "Girl Walks into a Bar," its "first feature-length film created specifically for the Internet," which people can watch free direct from YouTube. Users may of course comment on the movie and share links to it with friends.With their moves last week, Facebook and YouTube signaled aggressive plays for the digital, Web-connected living room, where millions of people gather each day with family and friends to share TV experiences. This is, of course, social on its face, which is where Facebook's interest lies. Netflix investors quailed at the Facebook news, which clipped shares by as much as 13.42, or 5.7 percent, to 222.09 in trading March 8. Jefferies and Co. analyst Youssef Squali noted that he expects to see more studios get behind the effort given the large platform and higher price point, providing "yet another caution sign against Netflix's premium valuation." While Netflix's all-you-can-eat subscription service is more compelling than all of its competitors in the short term, Squali said Facebook's entry underscores how crowded the playing field is getting. "We expect this competition to curtail Netflix's subscriber growth and drive higher content costs, impacting revenue growth and margins over time," he wrote in March 8 research note.
No doubt YouTube believes this is a good match for Google TV, leaving little question that it is gearing up for streaming video service in the future.