NBC Universal, News Corp. Go After Google
MARCH 22, 2007
A cabal of heavy-duty media players has formed to take on Google (Nasdaq: GOOG - message board) and its YouTube Inc. division in the free Internet video market.
Today NBC Universal and News Corp. , owners of significant networks -- including Universal Pictures, NBC, FOX television, and FOX movie studios -- have formed a partnership to distribute free online video. But that's not all. The pair has also inked deals to distribute the content through AOL LLC , Microsoft Corp. (Nasdaq: MSFT - message board), Yahoo Inc. (Nasdaq: YHOO - message board), and News Corp.'s MySpace unit. (See NBC, News Corp. Form Network.)
Users will be able to view clips and full-length episodes from NBC Universal and News Corp.'s popular shows. The partnership is bragging that, when aggregated, their Internet distribution network will tally up to 96 percent of unique visitors on the Internet. A new Website and the distribution network is expected to launch this summer.
The site will be completely advertising supported, with Cisco Systems Inc. (Nasdaq: CSCO - message board), Intel Corp. (Nasdaq: INTC - message board), and General Motors named as charter advertisers.
This announcement marks a significant step in the evolution of online video as content owners are realizing that they can easily market their own content instead of relying on third-party destinations such as YouTube.
The major content owners have been in mostly dead-end negotiations with third-party Internet sites to come up with deals that would allow the sites to host content not owned by them.
The intensity peaked earlier this month when Viacom Inc. (NYSE: VIA - message board) sued Google for copyright infringement as a result of the more than 160,000 copyrighted clips being hosted on the company's YouTube site. (See Viacom Sues Google for $1B.)
Viacom could possibly follow NBC and News Corp.'s lead by starting its own online distribution network. When reached for comment, a representative from Viacom commented, "A new online video distribution platform that respects copyrights is a welcome addition to the industry. 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."
Shares of General Electric Co. , the parent company of NBC Universal, were up 0.69 percent ($0.25) to $35.73 in midday trading. News Corp. shares sank 0.16 percent ($0.04) to $24.76.
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