March 22, 2007
Five questions the NBC/News Corp deal doesn’t answer
NBC and News Corp have come up with their response to YouTube: don’t wait for the audience to come to you, find a reason for all the big internet distributors to carry your TV shows. However, their new joint venture for online distribution leaves at least five important questions unanswered:
1. What share of the ad revenues have they had to give up to persuade Yahoo! et al to give their video player a position of prominence? The big Web networks are amassing big video libraries of their own: will they give pride of place to old media shows, and how much will they charge for the privelege?
2. How long will it take the anti-trust regulators to open an investigation? Expect to hear NBC and News Corp say that they will still be prepared to license their shows to internet companies in other forms, provided of course that the terms are fair and reasonable. But will that really be true, now they have combined their muscle to try to carve out their own space on the home pages of all the big Web portals?
3. Can NBC and News Corp persuade other TV companies and movie studios to join them? Every media company seems to be pursuing a strategy of "super-syndication" on the Web - distribute your content as widely as possible and collect a share of ad revenue along the way. But there isn’t room on Yahoo!’s home page for everyone. Will the Web become a clutter of competing video players?
4. How long will it take before the TV companies fall out with each other? For now, there’s a good reason to band together: to try to stop Google owning online video. If they succeed in taming YouTube, expect their interests to start diverging again.
5. Who wants full-length TV shows on the internet anyway? There’s a reason users love YouTube: they want the highlights, not the whole thing. The TV companies are still resisting the pressure to "unbundle" their content so that users can digest it in the form they want.
