Big Media's Swipe at YouTube


NBC and Fox have a new video service, but they have offered few details on just how they'll compete with the Google-owned powerhouse

Stop me if you've heard this before. Two major media companies ally themselves to fight off a nasty online competitor that distributes their content for free. The two form a joint venture, put their content online, and charge consumers for the right to get it nice, neat, and legal. I'm going to bet what jumps to mind is the music industry circa 2001, when Sony (SNE) and Universal formed a company called pressplay to take on Napster.

Uh, no. This time, it's Fox (NWS) and NBC/Universal (GE), which announced on Mar. 22 a joint venture for a company that will put their TV shows and movies online to take on Google's (GOOG) hot-as-fire YouTube video site.

Granted, the two companies took great pains to say this wasn't, in News Corp. President Peter Chernin's words, "a YouTube killer." Both Chernin and Jeff Zucker, the incoming CEO of NBC/Universal, stressed that their as-yet-unnamed site, which will stream shows from Fox, NBC, and other outlets, was a play to aggregate content in one place for the ease of consumers.

And to prove their point, they've signed deals with some of the biggest aggregators around—AOL (TWX), Yahoo! (YHOO), MySpace, and MSN—giving them a whopping 96% of monthly U.S. unique users and such well-heeled charter advertisers as Cadbury Schweppes, Cisco (CSCO), Intel (INTC), and General Motors (GM).

Yet Chernin and Zucker were woefully short on the details of exactly how their service will take on YouTube. The Google-owned powerhouse delivers all manner of content—much of it free and without ads—to an estimated 130 million unique eyeballs a month.

Content Matters

To say that the new joint venture isn't ready for prime time is an understatement. Start with the fact that anyone who goes to the new Fox-NBC site for, let's say, Grey's Anatomy, won't find it.

That's because ABC (DIS) seems perfectly happy with its own ABC.com, which helps burnish the network's brand, a key part of Bob Iger's strategy. As for traffic, Iger told Disney shareholders on Mar. 8 that the site had delivered north of 55 million downloads of its shows since launching last summer.

Disney isn't commenting, but Chernin acknowledges that Disney is focused more on brand at the moment. The clear inference: Don't look for Disney to hop on board any time soon.

How about if you go looking to download CSI, CBS's (CBS) powerhouse show? Well, you're not going to find that on the new NBC-Fox joint venture either. You'll have to head to CBS's innertube site or maybe buy it from iTunes (AAPL).

CBS issued a statement that "as with all exiting and potential partners, we will continue to discuss opportunies with NBC and Fox to determine if we can work together in the future, and we wish them well." Not exactly a ringing endorsement.


Hollywood Goes YouTube
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