March 25, 2007
NBC Universal/Fox Plan Online Video Distribution Site--But Are They Competing with YouTube?

News Corp. and NBC Universal just can't let go of that dream, the one where the networks all band together to eliminate the new threat on the block. After all, they've been engaging in legitimate business, while this newcomer is violating all the rules. In an organized crime analogy, the networks have engaged in racketeering, while YouTube came along to sell drugs to babies.

Back in December, I first wrote about the "network alternative" to YouTube. At the time, I said:

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.

NBC Universal and News Corp. have hung on to that goal and announced plans to team with C3 partner Yahoo!, MSN, and AOL to create an online destination that will include free television shows and full-length movies with advertising support.

I say this is a great move. After all, users are looking for ubiquitous access to their media, and the as-yet-unnamed product headed by NBC Universal and News Corp./Fox may offer them another platform for just that, regardless of whether Viacom and Disney plan to come on board. This is still two of the "big four" networks.

The problem I have is when this is framed as a YouTube killer. I am assuming from the various ways it has been written in the press that the intention from the networks is to create a Web site which directly competes with and undercuts the popular video sharing site owned by Google.

The problem is that, just as with the Viacom/Joost deal, this new online site will not be a competitor to YouTube in that it will not serve the same purposes of YouTube, at least in how it seems initially planned.

I've written time and time again that the power of YouTube is in the quotability it allows in picking moments from shows to post and share with others as a form of viral marketing, and in the grabability YouTube offers to other sites, where the video can be easily embedded.

What the NBC Universal/Fox video site sounds more like is a version of cross-platform distribution, an online venue to watch video. I think that's a great idea, but it doesn't provide direct opposition for YouTube if it's primarily going to be ad-supported full-length video content.

No matter what, I think the NBC Universal/Fox site will be a success, unless the networks themselves consider it designed to steal all of YouTube's thunder, that is.

No one from Yahoo! was contacted regarding the writing of this post.