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Home»Tech News»YouTube is reportedly working on a channel store — and so is everyone else
Tech News

YouTube is reportedly working on a channel store — and so is everyone else

August 15, 2022No Comments5 Mins Read
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YouTube is reportedly working on a channel store — and so is everyone else
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YouTube is building a system that would allow users to subscribe to streaming services through the YouTube app, The Wall Street Journal reported, and could launch the so-called “channel store” as early as this fall. The Journal’s report didn’t say which services might be part of the store, only that YouTube has been talking with various entertainment companies.

A channel store makes perfect sense for YouTube, and it’s been a long time in the works: The Information reported on a similar plan way back in early 2020. More recently, the company has been signaling this is coming: “I think whether content is distributed in a bundle, or where over time we explore other ways of distributing it, I think YouTube can be a great partner there,” YouTube VP of product management Christian Oestlien recently told The Verge. “We’ve never looked at the world as these binary choices between us and partner services… we think all of us can coexist in a really healthy way.”

This is now maybe the single most popular idea in the streaming business. Tech companies, particularly those who have tried to make their own original content and seen how hard (and expensive!) it is to do so, are deciding they’re better off handling everything but the shows and movies. You already have an account with Verizon or AT&T, for instance, and a bill you pay them every month, so your carrier can pitch itself as a valuable marketing partner and infrastructure provider for subscriptions. It’s a lot like the old cable bundle, just… internet-ified. And the upside is the same for app store providers and game stores: a small cut of everything you buy.

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Apple, Amazon, and a number of others all make this case, and often to great effect. HBO Max got 4.5 million subscribers through Amazon Channels, the Journal reported, and briefly bailed on that partnership but is now reportedly planning to come back. Even Walmart is reportedly thinking about getting in the game.

Channel stores are just easier to build than streaming services

YouTube may have the strongest case of any channel store partner, though. It has an enormous audience, upwards of two billion people a month, many of whom already have an account and a credit card saved to YouTube. They already have the app downloaded, they might even already be watching Peacock or HBO shows one clip at a time — it’s an easy upsell to get them subscribed to the service. (YouTube also has the best video player and app on the market, which doesn’t hurt its case to users.)

You can already subscribe to some streaming services on YouTube TV, but not yet in the main app.
Image: YouTube TV

YouTube even has some of this platform already built out. YouTube TV is to some extent already a channel store; you can subscribe to HBO Max, Starz, Showtime and other channels and services right from within the YouTube TV interface. You can buy and rent movies directly on YouTube, too, and watch some things for free. More recently, code in the Google TV app suggests that 50 free TV channels are coming to the platform.

To some extent, this also feels like a final admission that YouTube can’t compete head-on with the Netflixes and HBOs of the world. The company has long looked for ways to make and offer more premium content, including a handful of ill-fated attempts at making TV-style original content. (RIP, YouTube Originals.) YouTube is already the go-to place for clips and highlights of TV shows and movies, but hasn’t found great ways to integrate premium Hollywood content onto the platform.

To make this work, YouTube will have to convince streaming services that it’s not a long-term threat to their business

To make this work, YouTube will have to convince streaming services that it’s not a long-term threat to their business; YouTube’s relationship with Hollywood has improved over the years, but many entertainment companies still view it as both a partner and a necessary evil. Even though Apple and Amazon have competitive services, they don’t represent the existential, paradigm-shifting threat to the TV and movie industry that YouTube does. How the Peacocks and Paramount Pluses of the world will weigh the value of YouTube’s massive audience versus the competitive pull of its content will go a long way toward deciding whether YouTube can be the channel store it hopes to be.

Everybody’s going to want to be the channel store going forward — it’s the app store model all over again, and there’s a lot of money at stake. But if YouTube can pull it off, it might be even more than that. A YouTube app with all your streaming shows and movies, everything to buy and rent, plus all the creators you love and the search engine that underpins it all? That would be the most powerful app in entertainment, and it wouldn’t even be close.

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