Confirmed: Google, Inc. Wants YouTube to Disrupt Traditional TV

Google (NASDAQ: GOOGL  ) has just taken its plans to disrupt traditional TV to the next level, Fool contributor Tim Beyers says in the following video.

How so? CEO Larry Page recently named Susan Wojcicki as chief executive of YouTube, the streaming video channel that serves more than 1 billion active users monthly. At least one estimate quoted at Wired says the service was responsible for $5 billion in revenue last year. Impressive, but also tiny compared to the more than $60 billion spent on TV advertising in the U.S. alone.

Google seems determined to change the dynamic, and has tasked longtime ad boss Wojcicki with figuring out how to tip the scales in its favor. One potential approach, Tim says, would be to figure out ways to get newer channels up and earning revenue fast. As it stands now, YouTube seems to be a business for a few privileged operators and a hobby for the remainder.

Do you agree? How do you rate Wojcicki's chances of turning YouTube into a legitimate rival to traditional TV?  Please watch the video to get Tim's full take and then leave a comment to let us know whether you would buy, sell, or short Google stock at current prices.

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Comments from our Foolish Readers

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  • Report this Comment On February 11, 2014, at 7:13 PM, Manlobbi wrote:

    In traditional television media, the ratio of production to views was very low, so those producing had enough viewers for the whole mechanism to be profitable for those in production, although even this was only marginally profitable.

    By making production even more attractive to you-tube and encouraging more people to have freedom to produce a lot of material, this increases the ratio of producers to viewers. In the extreme case, if everyone produced one video for every 20 videos that they viewed, then the average video views would be 20, and the median quite lower such as 5, so of course this would not be profitable.

  • Report this Comment On February 12, 2014, at 9:37 AM, TMFMileHigh wrote:

    @Manlobbi,

    Indeed that is how the math works -- right now. My point is that Google needs a creative way to address the new reality and lower the threshold to profit so as to encourage high production quality programming across the ecosystem.

    No doubt that's a challenge, but one worth pursuing, I think, if YouTube is to challenge the hegemony of traditional TV.

    FWIW and Foolish best,

    Tim

    --

    TMFMileHigh in CAPS and on the boards

    @milehighfool on Twitter

    http://about.me/timbeyers

    http://timbeyers.me

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