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YouTube Gets Hundreds of Viacom Movies. Wait, What?

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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.

Fool contributor Anders Bylund owns shares in Google and Netflix but holds no other position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Netflix and Google. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (2) | Recommend This Article (3)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 07, 2012, at 4:09 AM, funspirit wrote:

    wow, more competition for Netflix. Eventually i think Google might go to an all you can eat buffet as you state. I thought Viacom sold content to Netflix even though Google bid the same amount because they thought Google was trying to take away their advertising revenue.

    For more om the competitive threats facing Netflix, this is a good column for that-

  • Report this Comment On April 07, 2012, at 6:01 AM, duuude1 wrote:

    Hi Funspirit,

    Can you name one thing Google has developed into a market-changing product other than search? Android was developed by another group and Google bought them - so that doesn't count.

    Netflix has changed the market with their DVD-by-mail first, and now their streaming second. Netflix is a proven innovator and business leader.

    I'm sorry, but Google doesn't stand a chance against Netflix.



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