The Streaming War Has a New Battleground

Several months ago, I wrote about the streaming war -- who had what, how quickly it was available, and what companies were poised to succeed in the new landscape. Last week, both Hulu and Netflix (Nasdaq: NFLX  ) launched original, broadcast-quality programs, and Amazon.com (Nasdaq: AMZN  ) and Google's (Nasdaq: GOOG  ) YouTube are close behind. Will original programming determine the winner of the streaming war once and for all?

Hulu goes to battle
Hulu's plot to take over the world seems well under way. Last Tuesday, the online service premiered the pilot of Battleground, a mockumentary-style series detailing a Senate campaign in Wisconsin. The show, while entertaining, is hardly groundbreaking, and perhaps that's the point. Were it to be broadcast on television, it would fit nicely into a Thursday night lineup on NBC.

Battleground is one of three original shows in Hulu's pipeline. In addition to Battleground, Morgan Spurlock's A Day in the Life will return for a second season, and travel show Up to Speed will premiere this summer. And this could be just the beginning. Hulu CEO Jeff Kilar (formerly of Amazon) said the company will spend a "chunk" of the $500 million allocated for content acquisition on original programming,

Flash in the pan
There's no question that Netflix made several wildly public and seriously unfortunate missteps in 2011. There are mixed reviews on whether its new original show, Lilyhammer, might be another in a series of bad moves.

I've been concerned about Netflix's sustainability for a while now, and the Red Envelope's release of its new show as a "binge watching" experience does little to assuage that concern. Whereas Hulu is releasing Battleground one episode at a time, over a series of weeks (like traditional television programming), Netflix has made Lilyhammer available all at once.

It's a model that limits the watercooler buzz to a mere day or two, rather than spreading it out over a months. CEO Reed Hastings said the Netflix experience is all about binge viewing, and I admit when I was still a Netflix customer, I was guilty of it a time or two.

But Netflix, once again, shows its lack of knowledge about marketing with this move. Hopefully the company will be smarter when it releases the much-anticipated new season of Arrested Development. Because there's only money in the banana stand until you burn it to the ground.

Ready, set, action
There's a lot of information to be found in job postings, and a recent posting for Amazon contained some nuggets of gold. The online giant recently posted an ad for a Creative Director of Comedy, "to develop original content for the Web and for traditional distribution channels." It also posted ads for Creative Director, Kids, and Production Assistant.

Once filled, these new team members will become part of Amazon Studios, which launched in 2010. The studio's focus to date has been crowd-sourced content, with registered users encouraged to upload a script, vote on which script should be developed, and collaborate on scripts in development.

If Amazon has managed to amass talent and scripts over the past year by reaching into its own community, as well as conducting market research through that same community, the new hirings could be a sign that the research is complete, the scripts are in play, and production is set to begin.

Celebrity TV
In its attempt to be all things to all people, Google's YouTube has been steadily adding original content channels, fueled by a reported investment of $100 million for original content from celebrities. On its Original Channels page, the company boasts, "Even more original entertainment will join YouTube's existing channel lineup in 2012, created by well-known personalities and content producers as well as some of the most innovative up-and-coming media companies and some of YouTube's own existing partners."

I'm not entirely sure how original this content will be. While there seem to be a variety of channels that I've never seen before, there are also familiar videos, including Ted Talks, and the Onion. Both of these are also available on Hulu and Apple's (Nasdaq: AAPL  ) iTunes.

The wild card
One could argue that with podcasts and video podcasts, Apple is king of the original programming. Should the company ever make the leap to streaming full-length original programming, that $500 price tag might look cheap.

The potential for original programming is great and can be the single most important factor in establishing streaming dominance for the foreseeable future. I'm not the only one who thinks so. David and Tom Gardener have included one of the stocks mentioned here in their special report, "3 Stocks to Help You Retire Rich." Find out which one by downloading the report today. Enjoy a copy on us; it's free for Fools.

Molly McCluskey owns shares of Amazon.com. Follow her on Twitter, where she goes by @MollyEMcCluskey. The Motley Fool owns shares of Apple, Google, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Google, Netflix, Amazon.com, and Apple and creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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