Why it matters: YouTube is reportedly moving forward with plans to rope in its AAA-quality scripted shows, decidedly bowing out of an arms race with Amazon, Netflix, Hulu and others. The decision could potentially save the company billions per year but will force it to look elsewhere for the next big thing.

Sources familiar with the matter tell Bloomberg that YouTube is no longer fielding pitches for expensive scripted shows. Casualties of the decision include the comedy “Overthinking with Kat & June” and “Origin,” among others.

The move, which hasn’t been publicly announced by YouTube, reflects the incredibly high cost of competing with heavyweights like Netflix and Amazon in the original content business. It’s saying a lot when a wealthy tech giant like Google bows out over budget concerns. Apparently, the company concluded that its money would be better spent on avenues like gaming and music.

Of course, some are arguing that Google was never all that serious with the venture to begin with. Anthony DiClemente, an analyst at Evercore ISI, said that, “In some ways, they never really went all-in on the strategy. That’s like bringing a butter knife to a gun fight.”

In addition to the aforementioned competition, YouTube will soon have to contend with Apple who is slated to announce its streaming video service later today.

As was first revealed late last year, YouTube eventually plans to take its original programming in an entirely different direction by making it all available free of charge by 2020.

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