Could Google revolutionize James Bond franchise?

September 20, 2010

One of India’s top film producers is interested in Metro-Goldwyn-Mayer, James Bond’s Hollywood studio. That may sound novel, but a purchase of MGM by Sahara India Pariwar would probably provoke only relief in Tinseltown — because it wouldn’t upset the industry’s status quo. That would require a more radical approach — something Google’s YouTube unit just might be capable of, if it dares.

There’s no deal yet between Sahara India Pariwar and the struggling MGM. But India’s biggest film production company, which also operates multiplex cinemas, understands the prevailing Hollywood business model. Films are released first in theaters and then eventually appear on DVD and Blu-ray, on pay television, and on the Internet. The basic idea is that customers pay extra to see movies sooner — especially during the theatrical “window.”

That model, though, could be ripe for a shake-up amid the rising popularity of Web-based video, led by YouTube, Hulu, Netflix and Apple’s iTunes. YouTube aside, these emerging channels have collaborated with content producers and have little interest in roiling the industry. Hulu, for instance, is owned by a trio of television networks. Netflix and iTunes have struck deals with producers to distribute their content, after a delay, to paying customers.

YouTube is a little different — and it’s the big kahuna of the bunch. Four years after Google paid $1.6 billion for the business, people are watching 2 billion videos a day on the website. Yet the division is still a money-loser. That’s because those videos mostly aren’t the kind that people pay for or advertisers crave. Long term, it’s hard to see how YouTube can turn its scale into cash without access to original programming.

Experiments in paid content and live streaming represent one type of response from YouTube. But it’s another possibility that particularly alarms some in Hollywood. With $30 billion of cash, Google could easily make an offer that MGM’s creditors couldn’t refuse. Owning MGM would allow YouTube to vault ahead of its rivals by bypassing the theatrical window. Maybe the next Bond film could even be released on the Web — where advertising revenue would supplant box office sales — just in time for the 50th anniversary of the franchise in 2012.

All that may sound a stretch, but Google has already done plenty to disrupt media industry conventions. Hollywood may yet thank Bollywood for delaying another shock.

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