The Interview Gives YouTube a Chance to Show Off Paid Video Chops

Sony Pictures made the controversial film available online on Wednesday, expanding distribution of a comedy that triggered a destructive cyber-attack against the company that has been blamed on North Korea. The studio reversed its decision to halt the movie's release after it was criticized for self-censorship.

"This is a huge opportunity for YouTube to show the world that it can be used to release professional content and content that is paid for as most people think YouTube is for free content," said James McQuivey, an analyst who covers the disruption of digital platforms at Forrester Research.

"The message from YouTube is really to other studios, that 'Look, we're in the big time now, we can do this, we're not afraid (of hacks) and we have a massive audience.'"

The release of "The Interview," one of the highest-profile films to be released digitally on demand so far, comes at a pivotal time for the Internet search company.

In recent years, YouTube has tried to leaven its image as an Internet repository of home-made videos and move toward more professionally produced content to expand its business. Last month, it launched YouTube Music Key, a paid ad-free service.

YouTube does not disclose its content sales, but despite being one of the most heavily visited destinations for video on the Internet with over 1 billion viewers each month, analysts say YouTube has lagged the likes of Amazon, Netflix and Apple in paid content offerings.

One risk for Google is that YouTube could become the target of Sony's hackers, though security analysts said the company is viewed to have strong cyberdefenses.

Google has an "enormous" infrastructure that is well-tested in fighting off denial of service attacks and other threats," said Barrett Lyon, principal strategist with F5 Networks and an expert in Internet network security.

"I wouldn't imagine seeing 'lights-out' out at YouTube."

The movie starring Seth Rogen and James Franco in a fictional plot to assassinate North Korean leader Kim Jong Un spurred the cyber-attack against Sony Pictures.

In addition to YouTube Movies, Google Play, and Microsoft's Xbox Video, the comedy will be available on a dedicated website, to rent for $5.99 (roughly Rs. 370) or buy for $14.99 (roughly Rs. 940), Sony Pictures said on Wednesday, a day after agreeing to release it at some 200 independent theaters. No cable or satellite TV operator has yet agreed to make "The Interview" available through video on demand (VOD).

Apple's iTunes store was noticeably not on Sony's list.

"If I were at Apple, I would think twice about re-inviting hacking troubles, which is so embarrassing especially when you're about to get into personal health and Apple Pay. You really want to show people you can preserve their information," McQuivey said.

"In the case of Google, they have probably been attacked so many times that the threat of being attacked again is so modest or minor in their consideration that they didn't think twice about this."

© Thomson Reuters 2014