Market Overview

Google-Eyed For Hollywood (GOOG)

It seems that YouTube users' homegrown shtick is no longer enough for Google (NASDAQ: GOOG).

According to the Financial Times, the company is prepared to pay “cash advances against future advertising revenues in return for lending their name to these channels and overseeing the content.” That's an impressive deal for actors to consider. But is it a wise move for the Internet giant?

From day one, YouTube was created to serve the user. People visit the site not because of Hollywood stars but because they want to see average Joes and Janes doing everyday things. They like the low-quality, low-budget content that YouTube offers. They appreciate the freedom to visit the site, get a quick laugh, and walk away without making a commitment to return again and again. But they return anyway – not because they have to, and not because the last video they watched ended with a “To Be Continued” notice. They return because they want to see the latest batch of low-quality, low-budget videos.

When consumers want high-quality content, they go to Hulu, NBC.com (NASDAQ: CMCSA), or ABC.com (NYSE: DIS). There are other video outlets, but none of them offer a comparable level of content.

Google may very well wish to change that. It may not see this as an opportunity to play catch-up, or to offer another “me-too” site, but instead may view this as a chance to create a fresh network of content that will be owned exclusively by Google. From there, Google could feasibly launch its own TV network and compete head-on with the likes of CBS (NYSE: CBS), Fox (NASDAQ: NWS), ABC and NBC.

For now, this is merely a pipedream. The reality is that big stars can only take a company so far. NBC might look like a champ for scoring Harry's Law, which was created by David E. Kelley and stars Kathy Bates. But while the Kelley name intrigued fans of The Practice, Boston Legal and Ally McBeal, his name alone is not enough to carry a show to success. The same can be said for Kathy Bates, whose star power was only enough to get viewers to watch the first few episodes. After that, people would have stopped watching if it wasn't any good.

Of course, Harry's Law is good and has maintained most of its viewers, settling in at a weekly average between 9 and 10 million. Viewers may have come for the star or the show's creator, but they stay because the writing, the characters, and the cases are top-notch.

The same cannot be said for Raising the Bar, a legal drama that starred Mark-Paul Gosselaar and was created by Steven Bochco, the man behind NYPD Blue. Millions of viewers flocked to the show, eager to see Gosselaar's return to television. But after providing TNT with a record-breaking launch (nearly eight million viewers – the biggest debut for a basic cable show), viewers began to lose interest, prompting the network to cancel the series during its second season.

Take note, Google. Both shows had a big star. Both shows had a successful writer/producer at the helm. But only one of the shows was able to persevere in the highly competitive world of scripted entertainment – the good one.

There are hundreds of other examples like this, such as Back to You (starring Kelsey Grammer and Patricia Heaton; canceled after one season), Hank (also starring Kelsey Grammer; also canceled after one season), Studio 60 (starring Matthew Perry, created by Aaron Sorkin; canceled after one season), The Comeback (starring Lisa Kudrow, who helped create the show; canceled after one season), My Own Worst Enemy (starring Christian Slater; canceled after one season), and so on.

In its defense, Google is not entirely foolish to go after existing Hollywood talent. YouTube will need a few known actors to promote the site's new direction, if only to gain free publicity from the mainstream press. But the company would be unwise to base its entire business strategy on the stars that it hires.

If Google disagrees, it might as well stick to this nonsense.

Posted-In: Aaron Sorkin ABCLong Ideas News Short Ideas Tech Media Trading Ideas Best of Benzinga

 

Most Popular

Related Articles (CMCSA + CBS)

Around the Web, We're Loving...

Partner Network

Get Benzinga's Newsletters