NBC Universal and News Corp. to establish new online video platform
Beginning this summer, NBC Universal and the News Corp. will offer thousands of hours of video clips, television shows and movies on the Web on an advertising-supported basis. Their joint venture, so far unnamed, already has distribution deals with AOL, MSN, MySpace and Yahoo.
Those sites, all major Web destinations, will feature video from NBC and News Corp., as well as complete shows from their TV and motion picture film libraries. There will be no charge for viewing TV programming, though most feature films will be sold on a download-to-own basis. Viewers will also be able to edit the content and post their own videos.
The joint venture will create its own Internet media player, which will be embedded on partner Web sites. Advertising revenue will likely be split between the site carrying the content and the company that produced the entertainment.
The new venture was widely viewed as a direct competitor to Google's YouTube. Peter Chernin, president of News Corp., however, suggested that Google might end up participating in the venture in the future. “In fact, we have had a conversation with [Google CEO] Eric Schmidt this morning and they are considering this,” he told reporters.
Most analysts see the exploding Internet television market as too big for any one entity to dominate. YouTube has made its reputation as a place for Internet users to upload and post home videos — a far different concept that the one envisioned by NBC and News Corp.
Executives said the new venture would differentiate itself from YouTube by offering professionally produced video as its core product. As of last week, NBC and News Corp. were silent as to any involvement their affiliate broadcast television stations might have in the venture. Both companies insisted their actions would not cannibalize traditional media outlets. Jeff Zucker, chief executive officer of NBC Universal, said NBC would soon be discussing possible participation with its broadcast affiliates.
Other media companies could eventually joint the venture. The “New York Times” reported that NBC and News Corp. have held discussions with CBS and Walt Disney about participating.
The new company will be headquartered in Los Angeles and New York. NBC Universal's Web syndication service, National Broadband Company (NBBC), is expected to provide the technology. George Kliavkoff, chief digital officer for NBC Universal, along with executives from both companies, will lead a transitional management team. A permanent management team will be announced in the near future.
In separate news last week, NBC told media buyers it is moving even more aggressively into the digital sphere. NBC.com is adding social networking, video sharing functions and more streaming media as part of its TV 360 broadband initiative.