As some readers will recall, I posted an article last week warning of Netflix’s destiny to fade into history if it continues on its current managerial trajectory. And in it I referred to the pittance in cash reserves the company has on its books, especially in comparison to current and potential competitors like Amazon, Apple, and Google. Well, an announcement coming from Google video site YouTube threatens to expose the Netflix Achilles heel for all to see.
Posted to the YouTube blog Wednesday morning, the announcement boasted a new licensing agreement made with Paramount Pictures set to make some 500 new movie titles available to YouTube and Google Play users across the United States and Canada.
“When it comes to movie rentals, we’ve been focused on adding as many of your favorite movies as possible,” began Malik Ducard, Director of Content Partnerships for YouTube.
The post goes on to explain that with Paramount as its latest licensor, YouTube now has working relationships with “five of the six major studios and over ten independent movie studios.” In all, YouTube and Google Play now offer approximately 9,000 movies to rent and stream instantly.
“It’s still early days for us,” Ducard continues, underscoring Google’s goal to continue expansion of its services by adding even more movies and making the service available to more countries. And with nearly $40 billion in cash on hand—more than 100 times the cash that Netflix currently has—Google certainly has the ammunition to continue moving forward with relatively little resistance.
Clearly Netflix will not be the only one affected by this news. Local video stores and Redbox kiosks will certainly bear some of the fallout, as will other companies offering streaming services, such as Hulu Plus and Amazon Prime. However, in the long run, the one with that stands to lose the most—but can afford to lose the least—is Netflix.
If your answer is ‘None of the above,’ share your prediction in the comments below.
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