One of the big announcements from the yesterday's talk of Larry Page is the launching of a video store, based on the already existing Google video service.
This was not really a surprise for many, since we have seen the signs in the last few days: The change of terms in Google video were intended to allow for this kind of commercialization.
What is new is that Google is intending to create a store in the "Google style": prices are not dictated by the company, but instead by content owner. This pricing strategy some similarities to their search auctions, where each advertiser gives a price for a word. In this way, we are gonna see a pricing war among content distributers, which will hopefully drive the prices to acceptable levels.
This is also very different from the strategy adopted by Apple, where each video is sold by 1.99, irrespective of its importance. The studios have complained against this method, because they cannot have different prices that account for the importance of the video. The same applies for the flat fee imposed to iTunes.
The Google approach is similar to the old flea market method: let anyone decide on their prices, instead of a central authority, and make the prices converge as needed. This approach is much more flexible and may become the reason for the success of the Google video store.
For the first time, video content will be sold without someone stablishing the minimum price. Authough this may not make any difference in the short term for the well stablished hollywood companies, in the long run this may prove a rervolution for new content producers, which will have much more opportunities to get their fair piece of the market.
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