• The Hollywood Reporter, Thursday, October 19, 2006 12:15 PM

Together, Google and YouTube present the first viable new-media successor to broadcast and cable television, which has "squandered the ad-supported critical mass they have enjoyed" for decades, says the trade press. There is no going back from a Web-based, on-demand media future, and the Google-YouTube infrastructure will offer the tools needed to manage and monetize that future.

The implications are twofold: One, the cost of content creation will fall rapidly; two, the best content from consumers and professional producers alike will rise to the top, lessening the studios' influence over media consumption.

YouTube is a brilliant buy for Google, because viral video sites reflect the demands of a younger, first-mover consumer base that, like MySpace, will broaden in age as it matures. Once you combine Google's unmatched searching technology with YouTube's 100 million-plus videos, and add the ability to charge consumers a fee to access or charge advertisers for accessing quantifiable targeted consumers, you get an efficient, lucrative new-media model.

Google can use this deal to close the gaps between production and consumption of content--which should, in turn, transform the economics of media and entertainment.

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