December 13, 2006
Enemies Rally Together to Ward Off New Threat: A Meeting of Three Families

It sounds like something out of The Godfather. Three families who have long competed, shot at each other, and undercut each other's businesses--sometimes even using questionable tactics--all think about banding together when a new threat comes into the town. They may have always despised each other because they wanted complete control, but the last thing any of them want is a new guy on the block, especially one that doesn't play by their rules.

So you set up a meeting and start thinking about doing the impossible--working together to run that new power off. This new ring has the gall to do the things you never imagined you could get away with.

Okay, so News Corp, Viacom, and NBC Universal has never sold drugs to children (although I'm expecting some snide remarks about alcohol ads from the left-wingers out there or else some talk about depicting of drug use on television from some conservatives right now to try and contradict that), but this new plan from these three powerhouses sounds reminiscent of those old-school cross-gang meetings depicted in the films when it comes to their pervasive new threat: YouTube.

Is the enemy of my enemy my enemy or my friend?

These networks can't tell. Because they know YouTube has power, they are willing to work with them, to a degree. But how much is too much?

The corporate owners of Fox, NBC, and CBS have started talking about plans to put together an online distribution system for video that would be a rival for YouTube in which they can control the dissimination of their own content.

The news broke from Julia Angwin and Matthew Karnitschnig at The Wall Street Journal a few days ago, although there is no chance of this developing into an actual available product for some time. The idea, though, is to create a common place for video content from the families of all these networks that could be viewed through a video player that could play content from across the Web.

Angwin and Karnitschnig emphasize that this product would not be tied in with MySpace because the other networks would not want their content on a News Corp. site, but would rather be a co-creation of the three conglomerates.

Disney/ABC is not involved, primarily because they have launched their own unique product to allow people to watch their shows on the ABC Web site, as I wrote about back in September.

As Daisy Whitney with TelevisionWeek writes in response to the WSJ story, "The networks are considering such a venture because of the success of YouTube, which has been driven in part by the large number of videos on its site that are unauthorized copies or clips of TV shows. The popularity of such clips has led the media companies to believe that consumers would be interested in a legitimate rival to YouTube, the story said."

This option exists alongside plans to continue working with YouTube. I wrote about the deals between Google and the major networks earlier this month, quoting BusinessWeek's Jon Fine as talking about "the YouTube version of the chicken-egg conundrum: Which party needs the other more?" Obviously, with this deal, the networks are hoping they won't need YouTube nearly as much in the long run.

As the WSJ story points out, "the latest round of talks could still founder. All the media companies are weighing attractive offers from Google to pay them licensing fees for their videos to play on YouTube. Google has offered to pay fees of as much as $140 million over three years to Fox, according to a person with knowledge of the offer. So far, NBC and CBS have struck deals to air some content on YouTube. NBC has said it was in talks with YouTube about reaching another unspecified content deal."

The reaction across the blogosphere has been interesting. Maggie Fox with the SocialMediaGroup predicts "somebody's going to lose a whole lot of money over this one." Mike Sachoff at WebProNews writes, "If the major networks want to succeed by working together to create a viable site and compete with YouTube than they would do well to keep in mind that users are looking for a variety of choices when it comes to content." And poster froosh at HipMojowrites that the problems with this plan include turf battles, deportalization, and it goes against the power of "user-appropriated content" because the networks will choose what to clip, as opposed to YouTube, in which people clip out segments they find interesting. Perhaps most interesting from froosh, however, is his point that this will not work because it is "a greed and envy driven initiative."


On December 13, 2006 at 6:51 PM, Siddiq said:

The is an apt analogy and you should develop it a bit more. Who is the interloping enemy? Is it YouTube or the hordes of users of the service who now have a voice?

I'm fairly skeptical of the networks figuring out how to to play by the same rules, fight the same battle, using the same strategies and focus on the same enemy while running their traditional businesses.

An even bigger problem for this initiative is that it addresses the wrong problem. Making their content available behind a co-owned walled garden doesnt address the explosion of expression that is YouTubes real draw. This site is about whats meaningful and important to NBC, CBS and Fox not whats meaningful to their viewers.

The networks are a group of slow moving Goliaths in full armor preparing to fight an army Davids by transforming into an even bigger Goliath.


I think there's a good possibility that the market could make room for both players (in which case YouTube's purchase price will in the short term most definitely appear bubble-ish). However, I would hope that the "Family" as you so aptly put it, would be smart enough to let it all be organic. Sure, they'll post their own "official" clips (as per YouTube), but the whole point is to permit user-generated content, otherwise it's just, uh, a TV channel.

If the Nets don't "get" the social aspect of this media, they'll be the ones losing the big bucks.


Siddiq and Maggie:

It reminds me of what happens when a chain store comes into town and kills a business who has been in the community for a long time. Of course, they blame the chain store instead of their customers, who they thought were so loyal. Publicly, the networks are not going to chastise the viewers for YouTube or TiVo or any other new technology--well, they may, but more often they will attack the company making the product. The public is really the one to blame, if you want to lay blame, because the technology would be pretty worthless without what people do with it.

Such is the case with YouTube. You are both right that user-generated content is one of the major strengths, but the problem comes with also talking about clips. Why do people put copyrighted material up on YouTube? Often, it is not to show the whole of some piece of work but rather to quote it. People want to pop a clip up from a show and say, "Look at this! Can you believe he said that?" Even if they just want to compete with YouTube on official content, the question is how much autonomy will be given to viewers to cut and rework, basically to appropriate and repurpose the content? If it is just a service for streaming their entire shows, that's not competing with YouTube...That's not giving viewers any more power than they had in the television medium, basically making it--like Maggie said--another TV channel.