NBCU, News Corp. Forget The 'You' In YouTube

NEW YORK Peter Chernin, president of News Corp., gushed that his company's partnership with NBC Universal to launch a video service for their programming is "one of the most exciting alliances in the history of the Internet." Jeff Zucker, NBC Universal president, said it would be "the largest ad platform on Earth."That's promising a lot. And to live up to the grandiose talk, the still-unnamed service has plenty of work to do, such as maintaining control over their assets while fostering the freewheeling community vibe that fueled YouTube's growth and popularity. They will have to do that virtually from scratch, banking on the lure of their trove of film and TV content to draw in viewers by making it easily available to them on major Web portals. But industry observers say mass-media content isn't what made YouTube successful in the first place. "They're missing the point there. YouTube is not about their content," said Fernanda Romano, ecd at Interpublic Group's Lowe in New York. "The cool thing about YouTube is it's all about participation. It's about the human being, and that's what they're forgetting."Yet the NBCU-News Corp. venture is very much premised on the notion that content is king and that new distribution channels will only increase the value of and demand for high-quality programming. "If you put on great programming like American Idol, the advertisers will be there," Zucker said. However, the evidence is slim that professionally produced half-hour and hour-long television programs are in great demand online. YouTube's traffic and video streams have not suffered in the wake of Viacom demanding it yank all of its content from the site, and the networks' own sites have not attracted large audiences for their streams of programming.Zucker and Chernin emphasized the joint venture would seek high-quality content from other sources, including media giants like Viacom and Time Warner (neither are participating currently), and users themselves. Both media executives emphasized the service and its distribution partners would fully support content holders' rights, a pointed jab at YouTube, which has been accused by media companies of building its massive audience on the popularity of pirated content. While the executives said users could "mash-up" clips from shows, some industry observers said it's doubtful the venture can offer the breadth that would convince users to accept their content restrictions.In the end, though, this is about finding new ways to distribute existing network programming, said Greg Smith, COO of Neo@Ogilvy, the digital media unit of Ogilvy & Mather. "This is kind of a short-term thing," he said. "My belief is that IPTV is going to be a very significant model very soon."Added Paul Hindle, director of communications planning at WPP Group's Young & Rubicam in New York: "Very, very, very few people" are watching long-form shows on their computer. "Our lifestyles are different and the notion of consuming all this [long-form] content in one sitting" is misguided.What has proven popular on YouTube and elsewhere is consumer-selected clips from shows and mash-ups of snippets of different content. While NBCU and News Corp. said those activities would be available through the service, it will be limited at least initially to content owned by those two companies.The sheer scale of the NBCU-News Corp. effort will give it a fighting chance when it debuts this summer. News Corp. and NBCU have signed up an Internet powerhouse of distribution partners— AOL, MSN, MySpace and Yahoo—which is a list that pointedly does not include the No. 1 place users turn to for video online, YouTube. "NewCo," as the executives call the service, will distribute "thousands of hours" of their programming (with ads) through Internet portals that reach nearly every Web user. It is set to follow the path blazed by YouTube by allowing users to embed clips and shows on their blogs and MySpace profiles, a move that would represent a radical departure from typical network distribution strategies."They're trying to fight against the scattering of people's media attention," said Colleen DeCourcy, chief experience officer at JWT.While the service is right now a sketch, lacking a name, permanent management team and tech infrastructure, it has piqued advertiser interest. The idea of streams of The Simpsons, 24 and Saturday Night Live available all over the Web was enough to so far attract ad commitments from Cadbury Schweppes, Cisco, Esurance, Intel and General Motors. Royal Caribbean and an unnamed advertiser committed to advertising on the service within hours of the announcement."This is incremental," said Tracey Scheppach, video innovation director at Starcom, which places ads for General Motors, noting that streaming Desperate Housewives all over the Web will still act as a complement to the show on TV. "It's going to help to have higher visibility" from the portal distribution partners.Zucker dismissed evidence that media company-Internet alliances, such as the failure of the New Century Network newspaper publisher consortium, often end in tears and recriminations among partners. "The scale of this distribution network … makes this different from anything that's happened in the history of the Internet," he said. The joint venture will have a separate management team and hire its own ad sales force. Both sides are contributing assets to the new company, including video distribution technology from NBCU and social networking from News Corp.The ad model is not fully worked out, the executives admitted, although advertising will be part of the content in the venture's player, allowing advertisers to get distributed reach all across the Web."We've learned a significant amount from our own site in behavior and what the consumer has been willing to experience," said Zucker. "We've been shocked at the willingness of the consumer to sit through the ads on NBC.com."Zucker and Chernin insisted the effort is not the "YouTube killer" it was immediately dubbed by others. This is about professional content, they stressed, not amateur videos. A distribution partnership with Google was even a possibility, Zucker said. "We are open for business with anyone and we'd like to be in business with everyone," he added.—with Andrew McMains and Mike Shields

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NBCU, News Corp. Forget The 'You' In YouTube

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