Analyst: YouTube Film Service Unlikely to Beat iTunes

In a somewhat controversial stance, CNET News reports that Tom Adams, one of Hollywood’s most-respected researchers and the owner of Adams Media Research, an entertainment industry research and consulting firm, thinks that YouTube’s recent deal with MGM to post free, ad-supported, full-length movies won’t succeed against paid iTunes Store mobile and Apple TV movie downloads.

“The issue comes down to ad-supported versus the paid model,” Adams said in the article. “For ad supported, the question is how many ads can you run and how much money can you generate per viewing? That has to be compared with the money made from rental or movie purchases. The content companies have all their content on iTunes and have shown complete support for the site despite their worries about Apple dominating the market. The studios aren’t making the same content available for ad-supported services.”

In other words, the difference is in the content, not the pricing. While many parts of the digital media industry are moving toward free, ad-supported access (just look at regular Web sites to see that trend), if the studios don’t offer the same content on both YouTube and iTunes—the article cites Lionsgate as an example, where full movies are available on iTunes but only snippets are up on YouTube—then it’s likely that consumers will stick with the full verisons, even if they cost money.

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