Quick, send in the clowns*

by george on March 22, 2007

Don’t bother, they’re here:

News Corp. and NBC Universal said today that they were creating an online video site stocked with TV shows and movies, plus clips that users can modify and share with friends.

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.

It’s telling that these guys aren’t suing a la Viacom. My guess is that even if Google could offer iron-clad assurances that users couldn’t upload their content, NBCU and News Corp still wouldn’t do a deal with them. As far as they’re concerned, a deal with Google leaves money on the table: why should they accept 70 cents of every advertising dollar for their content? The logical response is to build their own destination site and sell the advertising themselves. Selling advertising is, after all, what they do. How could they sit back and let some internet upstart supplant their whole business model?

I’m one of those people who sees much more than “pirated” content as having been the key to YouTube’s success. And while YouTube might not be the right partner for large media companies, they’re certainly a good partner for smaller players who couldn’t otherwise afford distribution on this scale. YouTube, in other words, has nothing to worry about. They’ll still be the dominant distribution channel for “amateur” video (the kind that creates web-scale flash floods of traffic), as well as the partner of choice for professional, independent producers looking to end-run the gatekeepers of Big Content (NBCU, News Corp, Viacom/CBS, Disney, Sony).

On the flip side, the new partnership has a great base of brand-name content; they have a built-in audience in the millions. If the service provides value to users beyond what they get from their DVRs, or Apple TV/iTunes Store, there could absolutely be some incremental value here to Big Content.

*Google’s name for NBCU/News tie-up? “Clown Co.”

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