In original Internet shows, hints of coming change

By Jake Coyle

Associated Press

Published: Thursday, Jan. 26 2012 12:00 a.m. MST

YouTube plans to expand to hundreds of Internet channels, just as television went from a few networks to dozens of cable channels. In the next few years, "most of your interests will have channels on YouTube," Kyncl predicts.

Netflix, which streamed 2 billion hours of video in the fourth quarter of 2011, is already operating under the assumption that video networks — whether streaming or televised — are converging. Just as Web video is undertaking original programming, TV networks are experimenting with systems such as TV Everywhere, which allows viewers to watch channels on the Web and on mobile devices.

"You can think of us as a cable-TV network, but we like to think we are at the center," says Reed Hastings, CEO of Netflix. "We are an Internet TV network, and then they are going to become like us. But it's the same thing, really."

Hastings offers a comparison between Netflix and HBO: "We are becoming more like them in doing some originals, starting that journey, and they are becoming more like us in creating an on-demand interface like HBO Go," which allows viewers to watch channels on the Web and on mobile and tabulate devices.

HBO declined to comment.

Production schedules will vary widely at the sites, but Netflix plans one notable difference: All its episodes will be released at once.

James McQuivey, an analyst at Forrester Research, says the fact that Hanks is making a series for the Internet shows how the traditional TV system is "ready to unravel.

McQuivey says the disruption in video will "unfold in front of us like a slow-mo replay of an accident."

"The new content won't be as good as what you watch Thursday nights from 9 to 10 p.m., but it's going to get closer to that quality," he adds. "And it's certainly as good as what you watch on Thursday from 3 to 4 in the afternoon or Saturday morning from 10 to 11."

Hulu and Netflix both want to use original content to entice viewers to their much larger libraries of older content. For Netflix, that's movies and old TV; for Hulu, that's last night's TV and older series. Hulu executives say any new original series has to be match up to traditional content.

"If you're ever going to do anything original, it's got to stand up to that," says Andy Forssell, senior vice president of content at Hulu. "That can't be 'Web video,' it's got to be TV quality."

Original content remains a small percentage of the budget for Hulu, which plans to spend $500 million on content in 2012.

Erin McPherson, head of original programming at Yahoo, likes to call Yahoo "the fifth network." Its Yahoo Studios production house in Los Angeles produces as many as 30 originals a month, often partnering with production companies such as Reveille (NBC's "The Office"). Its original programming attracted more than 26 million unique visitors in November, according to comScore.

"The time is right," says McPherson. "We're finally here."

AP Technology Writer Michael Liedtke in San Francisco contributed to this report

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