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Who’s In, Who’s Out in New Video Play?

Mar 26, 2007  •  Post A Comment

NBC Universal and News Corp. demonstrated last week that they’re not afraid to go it alone with the Web-video project they’ve devised to take on YouTube.

Notably absent from the list of participants, which includes Yahoo!, MSN and AOL, are media powerhouses Disney, Viacom and CBS. But that may not doom the venture slated for a summer launch, analysts said.

Most market and Wall Street analysts expect Viacom, Disney and CBS will eventually participate in some fashion. Though Viacom is not an investor at the moment, it is likely the company will provide content for launch, sources familiar with the company’s thinking said.

Viacom is currently attacking YouTube from a different angle, suing the No. 1 video-sharing site for copyright infringement in a $1 billion lawsuit. In a statement released the same day NBC Universal and News Corp. unveiled their project, Viacom made clear that its enemy’s enemies are its friends.

“The venture supports our view that upholding the rights of content creators is the only logical and legitimate path for the creative and technology communities to come together and bring great new online experiences to consumers,”Viacom said.

CBS said it is in talks with NBC Universal and News Corp.

“As with all existing and potential partners, we will continue to discuss opportunities with NBC and Fox to determine if we can work together in the future, and we wish them well,”CBS—which like Viacom is controlled by media pioneer Sumner Redstone— said in a statement.

Even if other networks don’t officially join, they can still strike syndication deals for their shows to be distributed on the sites run by other participants in the NBC Universal-News Corp. deal, said Greg Sterling, principal with Sterling Market Intelligence.

Beyond its ability to attract other media companies to participate, the YouTube challenger’s success will depend on its ease of use and how it generates revenue.

“If it is littered with commercials, it will not be as attractive,”Mr. Sterling said.

One increasingly important content creator was left out of the NBC Universal-News Corp. plan: its audience. It’s those users who have defined the success of YouTube.

“What the announcement doesn’t clarify is whether there will be any user-generated content or opportunity for the creation of community—both of which constitute the YouTube ethos,”said Todd Chanko, analyst with Jupiter Research.