Let’s (Not) Make a Deal

NEW YORK Based on the recent slew of online video distribution deals, media’s biggest companies are sending YouTube a clear message: We don’t need you.

At least that’s the stance of companies like Viacom and NBC Universal, which continue to resist placing their content on the Web’s largest video site (the site reached 75 million people in December, according to comScore).

Indeed, a year after Viacom and YouTube began their staring contest — starting with video clips being pulled off the site and, soon after, leading to a lawsuit — neither company has blinked. Since then, save for CBS, few major broadcasters have signed syndication deals with YouTube even as they put more  video all over the Web. In January, NBC announced a pact with MSN to distribute clips from the coming Summer Olympics. And Viacom has lined up MSN as a distribution partner, along with smaller video sites like DailyMotion and GoFish.

While YouTube did land a deal with Sony Pictures Television to distribute mini-episodes of shows like Married With Children, the site has largely remained on the sidelines. Acquired by Google in October 2006, YouTube has yet to establish itself as a legitimate, comprehensive hub for professionally produced content. And perhaps as an indirect result, it remains a minor player in the booming online video ad market, according to digital buyers and sellers.

Theories abound as to why media conglomerates won’t work with YouTube: They don’t want to give Google more power; YouTube only pays lip service to protecting copyrights; Google’s terms are just too rigid.

Some also point to YouTube’s user-gen sensibility and lack of ad-friendly professional content as holding the site back. “Not a lot of advertisers are willing to throw their brand into that environment,” said Kristen Fergason, vp, marketing at Maven Networks, which powers Web video for Fox News and Scripps.

“It’s kind of not a video advertising site,” added Adam Kasper, svp, director of digital media at MPG’s Media Contacts. “I don’t know that the sales are there.”

Making YouTube even less hospitable for advertisers is the site’s unwillingness to add preroll ads — the medium’s dominant ad format — since it would interfere with its user experience. Flooding YouTube with 30-second spots “would be a big change in their business model,” said Kasper.

Yet some industry analysts believe the media giants now staying away may one day soon sing another tune. “The premium content guys need YouTube more than YouTube needs them,” said JupiterResearch analyst Bobby Tulsiani, who predicts that in the near future media giants like Viacom will make concessions for a YouTube deal.

It’s not just the huge reach that would tempt them. “Without getting on YouTube, you don’t always get picked up by Google search,” said Todd Krieger, svp, Denuo.

Meanwhile, YouTube hardly feels like a pariah these days. “We’ve been extremely busy [building] partnerships with companies large and small,” said Jordan Hoffner, the site’s head of premium content partnerships. “You don’t have to go to just the five major media companies to get great content.”

To prove the point, Hoffner provided Mediaweek a list of 18 recent YouTube partners, including Hearst Corp., Tribune Broadcasting, Oprah’s Harpo, Reuters and PBS. And his team is anxious to ink more deals.

Digital ad execs say interest in resolving the YouTube conundrum has intensified, but any distribution deals will have to wait until the new set of online video alternatives, including Hulu and the CBS audience network, soar or flop. At the moment, the major broadcasters, said one exec, are “proving a point.”