With Monday's announcement that YouTube is acquiring independent video producer Next New Networks, plenty of people have concluded that Google and YouTube have officially become content providers themselves - something the companies swore they'd never become. While it's tempting to conclude this, my take is that YouTube is actually lifting a page from the cable industry's evolution - seeking to act less as content creator, and more as a "strategic catalyst" for the online video era. Let me explain.
Back in the early days of cable, its primary value proposition was purely improved reception. Many of the earliest cable systems were built in communities where over-the air broadcast signals were poor. Once those initial systems were built and then subsequently upgraded to have expanded capacity, the industry recognized that it needed to hang its hat on more than just the proposition of "better picture quality." Thus began a frenzied process of creating new specialty channels to appeal to specific audience segments. Initially these channels offered re-runs and other inexpensive shows they could get their hands on (who remembers that ESPN's early days featured ping-pong?). Eventually however, these channels would become original programming powerhouses in their own right.
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