News Corp and NBC Universal Team Up Against YouTube

Posted on March 22, 2007

The L.A. Times is reporting that News Corp. and NBC Universal are teaming up to fight YouTube.com.

News Corp. and NBC Universal plan to announce as soon as today that they are creating an online video site stocked with TV shows and movies, plus clips that users can modify and share with friends, according to people close to the negotiations.
The two companies enlisted help from some of Google's biggest Internet rivals. The News Corp.-NBC Universal partnership has deals with Yahoo Inc., Microsoft Corp., Time Warner Inc.'s AOL and News Corp.'s MySpace to place videos in front of their collective audience of hundreds of millions.
Despite Hollywood's dismal track record in creating successful joint ventures, these players see little choice but to band together to compete against Google and Apple Inc., which are becoming powerful distributors of entertainment.
News Corp. and NBC Universal want to control how their shows are watched online and to hold onto advertising dollars migrating to the Web. Google is expected to gobble up nearly a third of all online advertising revenue this year, according to research firm EMarketer Inc.

The L.A. Times article says there will be clips users can "share with friends." Hopefully, this means the site will have the technology that allows people to embed video clips and not just the "email this to a friend" kind of sharing. It will be difficult -- if not impossible -- for a new website to duplicate YouTube's traffic but if they offer embedding News Corp. and NBC Universal will still be able to benefit from the viral exposure their videos get when bloggers embed the clips in blog posts. Google also apparently has an internal nickname for the News Corp-NBC duo of Clown Co. which probably won't go over very well with either News Corp. or NBC Universal.

Update

The press release for the deal lists AOL, MSN, MySpace and Yahoo! as distribution partners for the video website. This will obviously help drive traffic to the site. Here is a sample of the content that will be intially available.

At launch, full episodes and clips from current hit shows, including Heroes, 24, House, My Name Is Earl, Saturday Night Live, Friday Night Lights, The Riches, 30 Rock, The Simpsons, The Tonight Show, Prison Break, Are You Smarter than a 5th Grader and Top Chef, plus hits from the studios' vast television libraries, will be available free, on an ad-supported basis, within a rich consumer experience featuring personalized video playlists, mashups, online communities and video search. Plus, the extensive programming lineup will include fan favorite films like Borat, Little Miss Sunshine, Devil Wears Prada, The Bourne Identity and Bourne Supremacy with bonus materials and movie trailers. Post-launch, plans will be considered for acquiring additional content as well as producing and licensing original programming for the new site's audience.

The press release doesn't really make it clear the extent to which videos will be embeddable in blogs but it does suggest that MySpace users will be able to embed and share the video clips from the new website.