NBC and News Corp unite to challenge YouTube


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May 24, 2005
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NBC and News Corp unite to challenge YouTube

Two of America's leading film and TV companies, NBC Universal and Rupert Murdoch's News Corp, have joined forces to create an online video venture to challenge the might of YouTube.

The as yet unnamed service, which will start in the summer, gives the companies' TV properties, including NBC and Fox, the chance to reap new revenues. Research firm eMarketer reckons $410m (£210m) was spent on online video advertising last year, a figure expected to almost double.

The services will also offer users a viable alternative to illegal file sharing websites and pirated material posted on other video sites. Last week Viacom, which owns MTV, sued YouTube owner Google for more than $1bn alleging "massive intentional copyright infringement" for allowing its material to be posted on the site. The NBC/News Corp service will let users watch clips and whole episodes of shows including Heroes and My Name is Earl, from NBC, and 24, House and The Simpsons, from Fox. It will offer a selection of films, including Fox productions such as Little Miss Sunshine, The Devil Wears Prada and Borat as well as Universal hits such as The Bourne Supremacy.

Clips, TV episodes and even films will be free, with the service funded through advertising. The partners have signed up advertisers including confectionery and drinks group Cadbury Schweppes, General Motors and tech group Intel.

As well as a standalone site, NBC and News Corp have signed distribution deals with AOL, MSN, Yahoo and News Corp's MySpace social network. These web properties will carry embedded video players, with News Corp and NBC sharing advertising revenues with the site's owner.

America's TV and movie establishment has become increasingly concerned about the video websites and especially YouTube, which attracts more visitors than the combined online presence of the US broadcast networks.

NBC and News Corp held talks with Viacom and CBS last year to try to bring them in, but talks collapsed. November's $1.65bn acquisition of YouTube by Google seems to have spurred NBC and News Corp into action. NBC and News Corp said they were looking for more partners. Whether Google is interested remains to be seen.

Richard Wray, communications editor
Friday March 23, 2007
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Guardian News and Media Limited 2007