Channel stores are officially the hottest new thing in streaming

Image: YouTube

According to The Wall Street Journal, a system that would allow users to subscribe to streaming services through the YouTube app is in the works. The Journal didn't say which services would be part of the store, only that it was talking with various entertainment companies.

It has been more than a year since The Information reported on a similar plan for a channel store forYouTube. 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 thinkYouTube can be a great partner there." We think all of us can coexist in a really healthy way if we look at the world in a different way.

This is perhaps the most popular idea in the business. Tech companies that have tried to make their own original content are deciding that they are better off handling everything else. If you already have an account with a carrier, you can pay them a bill every month so they can pitch themselves as a valuable marketing partner. The old cable bundle was internet-ified. The upside is the same for app store providers and game stores, a small cut of everything you purchase.

This case is made by Apple, Amazon, and many others. According to the Journal, HBO Max got 4.5 million subscribers through Amazon Channels and is planning to return. Walmart is said to be considering getting in the game.

It's possible that the strongest case of any channel store partner is YouTube. It has an audience of two billion people a month, many of whom already have an account and a credit card saved to YouTube. It is easy to get them to subscribe to the service once they have downloaded the app. The best video player and app on the market doesn't hurtYouTube's case to users.

Image: YouTube TV

Some of the platform already built out can be found onYouTube. You can subscribe to a variety of channels and services from within the interface of YouTube TV. You can purchase and rent movies on the internet. 50 free TV channels are said to be coming to the platform according to code in the app.

It feels like this is the final admission that YouTube can't compete with the streaming services. A number of ill-advised attempts at making TV-style original content have been made by the company over the years. I'm not sure if that's true or not. Premium Hollywood content hasn't found great ways to integrate onto the platform, despite it being the go to place for clips and highlights of TV shows and movies.

In order to make this work, YouTube will have to convince streaming services that it is not a long-term threat to their business, and that it has improved its relationship with Hollywood. The threat to the TV and movie industry is not represented by Apple and Amazon. How the Peacocks and Paramount Pluses of the world will weigh the value of YouTube's massive audience against the competitive pull of its content will go a long way towards deciding whether or not it can be a channel store.

There is a lot of money at stake as everyone wants to be the channel store going forward. It could be even more than that if it can be pulled off. A YouTube app with all your streaming shows and movies, everything to buy and rent, as well as the creators you love and the search engine that underpins it all? It would be the most powerful app in entertainment.