As Apple takes on Netflix, is YouTube ditching its original content strategy?

Google is denying a report from Bloomberg that its YouTube subsidiary has canceled plans for big-budget dramas and comedies. The news comes on the same day that Apple announced its on-demand TV streaming service, including a raft of original content that will position it to compete with Netflix and Amazon Prime Video.

However, Google confirmed that YouTube’s strategy, in what is shaping up to be a massive battle royale in the premium streaming space, will rely on an ad-supported model for its original content. In late 2018, news broke that the company was struggling with its YouTube Premium product (formerly known as YouTube Red), which costs $12 per month for ad-free access to original content, and had decided to introduce an ad-supported model in 2020, alongside the paid option. According to Google, the two options will exist side-by-side for the foreseeable future.

Existing YouTube originals, such as the popular Cobra Kai, will continue despite the change in direction — that show is secured for a second season and is reportedly in the midst of negotiations for a third installment. However, new titles that were in the works, such as sci-fi drama Origin and comedy Overthinking With Kat and June, have had their productions terminated, as confirmed by TechCrunch, leaving the show producer on the hunt for a new home.

Observers have already pointed out that any original content strategy that has a hope of competing with behemoths like Netflix, Amazon, Apple, and Disney, would necessarily cost billions of dollars. Despite parent company Google’s vast coffers, YouTube may simply be acknowledging it can’t carve out a niche for itself and still turn a profit on the costly production expenses.

This decision aside, it’s far too early to count YouTube out of the original content game for good. With the world’s largest video platform, generating more than $15 billion in ad revenue in 2018, it can afford to sit out a round or two and see how things shake out. In the meantime, it’s continuing to expand its own live-streaming TV service, YouTube TV, while Google itself has made a play for what might be the most lucrative online service of all: Streaming video games.

Updated March 25, 2019: Now includes Google’s denial of the original Bloomberg report.