There is an article in today's Wall Street Journal called 'Google to Offer Video Downloads, Software That Rivals Microsoft's' which I find interesting. It looks somewhat like Apple's iTunes service, with the emphasis being on using the PC as the video viewing platform.

What is interesting to me is that Google (a company who receives 98% of their revenue from advertising) is monetizing the video through a traditional 'purchase' mechanism. My initial thought is that it this strategy is the easiest way to get high-quality content from partners like CBS initially. Then, when that model inevitably pressured to move to an ad-supported structure, Google will be well positioned to be a leader in that model.

Excerpts from that article:

Google Inc. plans to announce Friday that it will begin allowing consumers to buy videos from major content partners... Google [will] announce partnerships with ... CBS and the National Basketball Association. ...

The search company also plans to announce Google Pack, a bundle of software from Google and other companies that consumers will be able to download and install on their computers... That software will include ... RealNetworks Inc.'s RealPlayer multimedia software... Google Pack will also include Google's own desktop search software, google earth satellite imaging and maps software, Picasa photo-management software, Google Talk instant-messaging program, its Toolbar add-on for Web browsers and screen saver software.

... Google Pack, which could eventually come preinstalled when people buy some new personal computers, is one way for Google to promote alternatives to Microsoft. It doesn't, however, appear to include productivity applications, such as word-processor software, that would compete more directly with Microsoft's core software business. A Microsoft spokesman wasn't able to comment.

Some details of Google's online video service remain unclear, such as how much content owners might charge consumers to download their videos. Google last year had said it planned to allow content owners to charge for videos, but it hadn't activated that feature. Interest in delivering video over the Internet has surged since October, when Apple began offering downloads of popular TV shows through a partnership with Walt Disney Co. Google has developed its own digital-rights-management software to protect downloaded videos from piracy.