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March 22, 2007

NBC/News Corp. site faces challenges

by James McQuivey and Josh Bernoff

According to the LA Times, NBC and NewsCorp will create a shared destination site for their television and movie content. Sure, advertisers will get excited about the chance to sponsor the American Idol page on the site, so the motivation is obvious. But will it work?

It won’t challenge YouTube. YouTube is two parts social experience, one part video experience. That’s how it gets millions of viewers. But this site could draw traffic from NBC.com or Fox.com, as viewers learn to seek the show they like rather than the network that produces it. If other networks come on board it could become a significant online destination.

It won’t survive if: the interface isn’t fun to use, the content you want isn’t easy to find, or the ad model gets in the way of the show (have a look at abc.com’s newly released player which integrates ads and TV-quality streams in a sustainable way).

What does this mean? Likely, a delayed launch in order to get the social and interface features right. Just in time for the next season of American Idol.

More added by Josh: According to the Wall St. Journal, the venture has a distribution relationship with MSN, AOL, and Yahoo! We've already written about how Microsoft is lining itself up as the friend of copyright holders and the anti-Google. With this distribution the venture becomes much more powerful -- but how will it be rationalized with these companies' own very extensive video sites? This thing could take off like a rocket -- or it could expode on the launchpad, with too many partners trying to get their fingers in the design.

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I don't see this as intended to "challenge" GooTube for the business of hosting mostly low quality or copyright infringing video.

This is about distribution - namely owning it themselves. If this venture works, think of the leverage gained on cable opertaors who already must pay licenses for content per affiliate. How mch more can networks extract when they can show the operators that distribution can happen off cable/satellite to a mass audience? Not to nention, keeping ad dollars by not sharing a pod that lets operators build competing spot ad sales forces.

And why shouldn't the networks take this approach? They already feel that they built cable by giving the operators something to distribute. Why would they want to make that same mistake online, building up a Joost, GooTube or anyone else? Those appear to just be more aggregating distributors building their business on the backs of content networks and creators. Zucker and Murdoch appear to be smart enough to not make that same mistake twice. Redstone/Monvies do not appear to get it. Let's see what the Mouse does - I'd bet they partner up and control distribution direclty.

Andy Leff

Couldn’t agree more with James and Josh. This agreement will be a blip on Gootube’s radar screen for one simple reason: It doesn’t draw on user-generated content, so it can’t directly compete with YouTube. Original, community-driven material is YouTube’s main attraction. The News Corp./NBC idea is merely another distribution channel. Hardly a 1-to-1 matchup, and definitely not as fun or engaging.


This should be quite interesting. I don't think it's possible to compete with YouTube.com now that Google has taken over. I am still a fan of the ultimate challenge to take out the "big guys". I enjoy the entertainment. I posted my opinion about it as well on my blog.

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