Google Decides Not to Go Up Against the Big Bad Boys of Streaming

A tragic tale as YouTube (owned by Google) “bows out of Hollywood Arms Race with Netflix and Amazon.


by Lucas Shaw

YouTube has canceled plans for high-end dramas and comedies, people with knowledge of the matter said, a pullback from its grand ambitions for a paid service with Hollywood-quality shows.

The Google-owned business has stopped accepting pitches for expensive scripted shows, said the people, who asked not to be identified because the decision hasn’t been announced. The axed programs include the sci-fi drama “Origin’’ and the comedy “Overthinking with Kat & June,’’ prompting their producers to seek new homes for the shows, the people said.

The retreat from direct competition with Netflix Inc. and Inc.’s Prime Video service reflects the high cost — in billions of dollars — needed to take on those deeply entrenched players, even for a rich tech giant like Google, the people said. YouTube generated more than $15 billion in ad sales last year without a huge slate of glitzy productions and concluded its money is better invested in music and gaming.

“In some ways, they never really went all-in on the strategy,” said Anthony DiClemente, an analyst at Evercore ISI. “That’s like bringing a butter knife to a gun fight.”

Shift to Free

The strategy change, first reported last November by the Hollywood Reporter, means all YouTube shows will eventually air for free. The company is still working out release strategies for the shows, the people said.

The shift also raises questions about the long-term future for Susanne Daniels, YouTube’s head of original productions since 2015. She was brought in to boost the volume and quality of YouTube’s original programming and is now looking to move on, according to people with knowledge of her thinking.

“While it’s strangely flattering to be the topic of Hollywood gossip, please know I am committed to YouTube and can’t wait to unveil our robust slate of new and returning originals,” Daniels said in an email.

A respected TV industry veteran, Daniels joined the company to develop and produce original shows aimed at making the YouTube Red subscription service a viable competitor to Netflix, Amazon and Hulu. Now, those efforts are more focused on programs like Kevin Hart’s “What the Fit,” with the comedian cheerleading in track pants.

Uphill Fight

While Netflix transformed itself from a DVD-delivery service into one of Hollywood’s largest studios, other technology companies have announced grand plans to make movies and TV only to retreat after a couple of years. Microsoft Corp. created a Los Angeles studio and ordered a show based on its popular game “Halo,’’ but shut down before the series came out. Yahoo lost $42 million on a trio of original series, including “Community,” and then scrapped its plans as well….

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