YouTube to launch online TV service

Google Inc. is working on a major overhaul of YouTube as it tries to position itself for the rise of televisions that let people watch online video in their living rooms, The Wall Street Journal reported.

YouTube is looking to compete with broadcast and cable television, some of these people said, a goal that requires it to entice users to stay on the website longer, and to convince advertisers that it will reach desirable consumers.

The site is planning a series of changes to its home page to highlight sets of "channels" around topics such as arts and sports. About 20 or so of those channels will feature several hours of professionally produced original programming a week, some of these people said. Additional channels would be assembled from content already on the site.

It is planning to spend as much as $100 million to commission low-cost content designed exclusively for the Web.

The moves are pressuring cable and satellite companies, which are developing and acquiring new services to compete. On Wednesday, satellite operator Dish Network Corp. said it won a bankruptcy auction for Blockbuster Inc., which has a streaming movie business.

YouTube is still in the process of designing the channels and in recent weeks held meetings with Hollywood talent agencies such as Creative Artists Agency, William Morris Endeavor and International Creative Management to discuss the possibility of their clients creating YouTube channels, people familiar with the matter said. Several news publications previously reported on talks with talent agencies.