YouTube's 10-Foot User Interface: The Elephant in the Room Just Got Bigger

In case you missed it, YouTube recently launched a new user interface designed for the television, called YouTube.com/XL (for extra large-- just don't wash it on hot or leave in the dryer too long). It is designed to be watched on the big screen and controlled by a remote, versus the web version which is geared towards a PC monitor, keyboard and mouse.

A previous version (YouTube.com/TV) had already been built for some enterprising game consoles like the Wii and Playstation to allow YouTube browsing when connected to the TV, but this version is designed for any TV-connected device.

Still the leader in online video consumption but watching upstarts like Hulu eat their lunch for long-form content, YouTube has been struggling to stay relevant and move beyond their initial "dancing cats" video-snacking charm. They have made a concerted effort to ink long-form content licensing deals and add "high quality" video streams as an option, but have watched as more and more content houses throw their weight behind Hulu's purpose-built site for viewing movies and TV shows (Disney/ABC being the latest).

An interesting sub-plot to all of this is the back-room machinations by the content houses to restrict long-form Over the Top (OTT) video content from cannibalizing their lucrative deals with Pay TV operators like cable. A couple of months ago, Hulu bounced Boxee support after not-so-subtle threats from Hulu's backers who were worried about their OTT video golden goose bleeding into the living room and causing Pay TV cannibalization heart-burn. YouTube is under the same pressure, since you will find all its long-form TV shows stripped from the YouTube.com/XL portal.

All of this is a bit like sticking your finger into an elephant-sized hole in the dike. The OTT video threat is coming like a tidal wave, and it will take more than legal wrangling and technical poison pills to keep it from reaching the living room TV. The question is, when will the Pay TV stakeholders devise an adequate strategy to embrace this trend and profit from it? Is there a compelling strategy to allow them to ride the elephant rather than get stomped by it?

While it is still early and “cord cutting” of Pay TV services in favor of free Over the Top video is still less than 1% of consumers, the stakes are high and Pay TV operators are nervous. Despite their outward claims that the deck chairs are not sliding, the cable companies are not only investing to make their content available online (Comcast’s Fancast is one such example), but also looking for bullet-proof ways to authenticate that only their Pay TV customers can enjoy their own premium OTT content. Time will tell whether their walled gardens can move online without bunnies nibbling, and larger animals stomping, their digital delights.