Google is reportedly in talks with major Hollywood studios to deploy a pay-per-views streaming video service.  (Source: Paul Sakuma / Associated Press)
Can YouTube grow up?

Google subsidiary YouTube is the world's top video site and has made stars with six-figure yearly incomes.  However, for all that it's still not viewed as the first place to put more mature, higher-production value content such as television shows or movies.  Sites like Hulu and Netflix have dominated in that arena.

Now as Hulu ponders a paid subscription service (and an IPO), Apple ponders streaming, and Netflix expands its own streaming lineup, Google is considering pushing a pay-per-view streaming competitor of its own.

The logic seems straightforward.  Video of all types is gradually transitioning online.  And as the king of (almost) all things web, Google obviously needs to get a piece of that action.  

Fast Times, who reported news of Google's pay-per-view plans quotes a top executive close to the talks as saying, "Google and YouTube are a global phenomenon with a hell of a lot of eyeballs – more than any cable or satellite service.  They’ve talked about how many people they could steer to this . . . it’s a huge number."

Google is reportedly in talks with several major Hollywood studios (likely Fox/News Corp., ABC/Walt Disney, NBC, and CBS).  And the talks have reportedly intensified over the last few weeks as news of Apple's upcoming September press conference hit.  Apple is expected to launch new video services along with a new version of its Apple TV streaming media box at that event.

A rental service has already gone through beta-testing on Google's YouTube.  That service has been in operation since January.

A full-fledged service would require solid commitments from the video industry's top players.  However, those players reportedly are enticed by the fact that Google could use search engine results and YouTube results to steer users to their content.  That could add up to a big payday for them, at a time when physical media sales are shrinking.

Google acquired YouTube in 2006 for $1.65B USD.  While that may seem like a bargain, given that the property is one of the most visited sites on the internet, YouTube has struggled with profitability.  Its business model requires lots of bandwidth as video is a data-intensive type of web traffic.  And that bandwidth adds up to big serving costs for Google, which eat up the advertising revenue generated by the site.

“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs

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