And the march of the old media dinosaurs continues, as Google (GOOG) plans to spend upwards of $100 million on original programming for YouTube. The massive video presence wants to take on cable and broadcast with its own pro video content, the WSJ reports.
It's the obvious direction for YouTube and is in line with the Netflix (NFLX) plans to pick up an original drama series. How are the traditional movie and TV outlets going to compete? They aren't, because they no longer control consumer access. Production companies can now make direct deals with the likes of YouTube and Netflix. Furthermore, the range of high-quality material is rapidly opening up, which means that the dollars that a Google can bring to bear will go a long way.
There should be no surprise, as Google has worked with at least one advertiser sponsoring a full-length film. What is surprising is how much can be done without big budgets. Here's a short (and funny) example called Uncle Jack:
The film, by Jamin Winans, was commissioned by Pentax to be shot completely on two of the company's DSLRs. They ended up rerecording the sound, according to Kiowa Winans, the filmmaker's wife and co-owner of independent production firm Double Edge Films. But the point is that the cost of producing results on a professional level is plummeting. The two have produced online commercials for companies at a small fraction of the price a regular television commercial would run.
More importantly, they are examples of independent filmmakers who have begun to produce their own work so they can own the rights to it. For example, the Winans found investors and mortgaged their house to raise the $250,000 it took to make the full-length movie, Ink:
They worked on location in their Denver backyard and used local actors to help keep the cost affordable. It's been out on DVD and Blu-ray for 15 months, and Kiowa Winans said that they are a month or two away from paying off the investors:
We could have taken distribution deals that maybe would have given us more money on the front end, but we've had bad experience with distributors. There's absolutely no reason to hand that off to someone else to collect all the money and hand you nothing. That movie will return money every year until we die.That's where the online purveyors will ultimately leave traditional Hollywood behind, because they can work in ways with new sources of movies and television that the studios are too inflexible to consider. It's why Google is promoting the idea of new talent on YouTube.
With production relatively inexpensive, there will be a good amount of material. Will it all be sterling? Not a chance. But from the view of a YouTube, not all the video has to succeed. Just enough.
[Several days after this post ran, the New York Times ran an article on low cost production studios focused on video for YouTube.]