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Why Google Wants Its Own Netflix-Like Video Streaming Service

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Yet another player in video subscription streaming

Google (GOOG) now plans to monetize YouTube in a different way, by offering a video subscription streaming service—similar to what Netflix (NFLX) offers. According to the latest report from TheStreet, YouTube has signed agreements with CBS (CBS), Twenty-First Century Fox (FOXA), and Walt Disney (DIS) for the purpose of launching its own OTT (over-the-top) service.

With this service, Google would be yet another player in the crowded video subscription streaming market. Amazon’s (AMZN) Prime Video, Dish’s (DISH) Sling TV, and Sony’s Vue are among the other services aggressively trying to tap this growing market. Even Apple (AAPL) has long been negotiating with content providers for a similar service, but so far it has failed to strike a deal with them.

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Stiff competition

Google would be entering a highly competitive market if it becomes a player in subscription video streaming. According to a Video Trends report from Digitalsmiths for 3Q16, 51.8% of users subscribe to Netflix, while 24.8% users subscribe to Amazon Prime Video service. This is followed by Hulu and HBO Now services, which account for around 10% and 5% users, respectively.

YouTube has gradually shifted its focus toward showing premium content to its users. Late last year, it launched the YouTube Red subscription service for $10 per month. This service streams ad-free videos and music and lets users watch videos offline.

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