NBC, News Corp. to Start Their Own New Tube

NBC and News Corp. -- which owns Fox -- plan to take on Google's YouTube by forming their own Web-based video outlet to gain exposure for their deep wells of content and partnering with a host of Google competitors to make it happen.

The two media giants say their site will instantly be the largest Internet video distribution network on the Web. AOL, Microsoft's (Nasdaq: MSFT) MSN, News Corp.'s MySpace and Yahoo are among the partners who will help distribute the video content, the two firms stated.

The yet-to-be-named site will launch by mid-summer, the companies said, and will likely have a greater reach than Google's YouTube.

'A Game Changer'

"This is a game changer for Internet video," said News Corp. President and COO Peter Chernin. "We'll have access to just about the entire U.S. Internet audience at launch. And for the first time, consumers will get what they want -- professionally produced video delivered on the sites where they live."

The networks bring a powerful lineup of popular content to the venture, with top dramas such as "Heroes," "24" and "House," comedies such as "My Name Is Earl," "The Simpsons" and "30 Rock" and specialty shows such as "The Tonight Show With Jay Leno" and "Saturday Night Live." Film titles will also be available.

Content will be ad-supported and available for free download and playback. It can also be used to create playlists, do so-called "mashups" and to foster online communities, especially on MySpace, where users will be able to embed their favorite video clips on their profile pages.

Advertisers on Board

Several advertisers are already lined up, including Cadbury Schweppes, Cisco, Esurance, Intel (Nasdaq: INTC) and General Motors, stated NBC and News Corp.

The networks are also positioning their offering as a content-owner-friendly alternative to YouTube, which has run into a host of legal entanglements and tense negotiations, most notably in the form of a US$1 billion copyright infringement suit from another media giant, Viacom.

"We're looking forward to working with any content provider or distributor who wants to take advantage of this extraordinary opportunity," said Chernin.

"Anyone who believes in the value of ubiquitous distribution will find this announcement incredibly exciting," added NBC President and CEO Jeff Zucker. "This venture supercharges our distribution of protected, quality content to fans everywhere. Consumers get a hugely attractive aggregation of a wide range of content, and marketers get a novel way to connect with a large and highly engaged audience."

One to Watch

The star power behind the video service makes it a formidable force, one that YouTube will need to reckon with. Still, there may be room for the two sites to coexist, especially if Google keeps YouTube's social networking, home-made video leanings intact going forward.

The News Corp./NBC venture isn't about consumer-created content and won't be a direct challenge to YouTube for that reason, Forrester Research analyst Josh Bernoff told the E-Commerce Times.

"YouTube is two parts social experience, one part video experience," he noted. "If other networks come on board, it could become a significant online destination."

The details will determine how effective the site will be, Bernoff continued. Elements such as the interface, search functionality and how the advertising is integrating will go a long way to determine its success . Another important consideration will be keeping each of the many partners' own interests in line with the larger venture. For instance, AOL, MSN and Yahoo already have their own video channels.

S&P Equities Research analyst Scott Kessler agreed that the site wouldn't be an immediate threat to YouTube, which drew some 133 million visitors in January, according to comScore data, in part because it has so many partners to keep happy.

"This planned venture has prominent constituents, considerable assets and initial advertisers," he said. "But we are skeptical about its prospects, given multiple backers with potentially divergent agendas and priorities."