News Corp., NBC Take On Goo-Tube: User Generated Content Will Survive

 |  Includes: GE, GOOG, NWS
by: Bambi Francisco

Take that YouTube. In an effort to win back the hearts of television fans drawn to Google's (NASDAQ:GOOG) YouTube to watch popular shows the Internet company doesn't own, News Corp (NASDAQ:NWS) and NBC Universal (NYSE:GE) have agreed to license some of their most popular hits to Google's Internet rivals.

The two media giants on Thursday announced that they've partnered to form a new cobranded site (to be launched this summer) as well an Internet video distribution network comprising of the Web's leading brands - Yahoo! (NASDAQ:YHOO), Time Warner's (NYSE:TWX) AOL and Microsoft's (NASDAQ:MSFT) MSN. The move to work together had been widely reported on for several months. Viacom (NYSE:VIA), which had been part of the initial discussions, appears to be going it alone with an alliance with Joost.

But the partnership now gets additional muscle with the addition of the four Net giants.

By joining forces, both content giants and their Internet distribution partners will have a better shot at competing for the video-viewing online audience - which to date has largely been migrating to YouTube.

That said, News Corp COO Peter Chernin said on the conference call Thursday that he spoke with Google CEO Eric Schmidt Thursday morning and Google is "considering" participating as a distribution partner.

As part of this deal, News Corp and NBC Universal will give the Web portals access to popular shows including Heroes, 24, House, My Name is Earl, Saturday Night Live, 30 Rock, The Simpsons, The Tonight Show, Prison Break, and Top Chef (one of my favorite shows), as well as movies, like Borat or The Devil Wears Prada. Each partner will feature the site's content in an embedded player. American Idol will not be available on the new site as Fox does not have Web distribution rights, said Chernin.

The new site (no name just yet) will have a new management team. The transitional team management team will be led by NBC Universal's Chief Digital Officer George Kliavkoff. The new site will also accept user-submitted content, and the executives - News Corp's Chernin and NBC Universal' CEO Jeff Zucker - expect users to mash-up their own user-submitted videos with the copyrighted material. Chernin said that the new management team will determine which shows get top billing on the joint site. Zucker said that users will control which shows get the top billing because the shows that appear at the top will be the ones that are either most viewed or highest rated.

There will be an ad sales force for the new venture. It will be put together in the coming weeks and months, according to executives on a conference call. The bulk of the revenue that comes from the new venture will go to the copyright owner.

A couple lingering thoughts:

- Will all these partners be able to work together effectively?

- This is not the end of user-generated video. I don't think this new site will be known for professionally-produced video and YouTube for user-submitted content. I think professionally-produced and amateur video will live side by side.