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Welcome to Hollywood, where you keep your friends close and cut large content deals with your worst enemies.
When Google (Nasdaq: GOOG ) bought YouTube, the video site came complete with a billion-dollar copyright lawsuit from Viacom (NYSE: VIA ) . According to Viacom, YouTube would be nothing without illegal clips from the company's networks such as Comedy Central and MTV. Viacom has lost the early rounds of that war but keeps appealing to the next level. Soul mates, these companies ain't.
So it's a bit of a surprise to see YouTube announcing a big content partnership with Viacom studio Paramount Pictures. Under the agreement, nearly 500 Paramount movies will make their way onto YouTube and Google Play in the next few weeks, including such fan favorites as Ferris Bueller's Day Off, the Godfather trilogy, and recent Oscar winner Hugo.
With Paramount aboard the YouTube bandwagon it so dearly would like to burn, News Corp.'s 20th Century Fox becomes the lone holdout among major studios. The YouTube catalog now amounts to 9,000 movies, mostly available on a pay-per-view basis at rates comparable with your local cable service's PPV or on-demand choices.
While it's cool to see YouTube turning sworn enemies into frenemies, I don't see this service moving the needle very far for either one of the partners. As I've said, Comcast (Nasdaq: CMCSA ) and Time Warner Cable (NYSE: TWC ) tend to have many of the same films available at comparable price points and terms of service, but piped onto the big screen in your living room without any third-party set-top boxes to worry about.
And if you're worried about any of the myriad pay-per-view services posing a threat to digital movie maven Netflix (Nasdaq: NFLX ) , I have news for you: With a low-cost, all you can eat rental service, Netflix plays to a totally different market than these premium-priced collections of mostly new releases. The services may compete for the same set of eyeballs in many cases, but the value models are totally different.
If Google's full-length movie plans have any merit, it's only because Google Play puts a mobile movie theater in your pocket with any Android phone. But even as Androids invade our living rooms and pants, Google may not be the biggest winner in that trend.