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3/23/2007
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News Corp. And NBC Universal Challenge YouTube With Internet Video Network

News Corp. and NBC Universal also plan to create their own media player that will appear on its new site, as well as on partner sites such as AOL, MSN, MySpace, Yahoo, and possibly even YouTube.

News Corp. and NBC Universal have thrown down the gauntlet and challenged Google's YouTube to an impromptu beauty contest.

The two old-school media companies are planning to launch an as-yet-unnamed video network this summer to show premium content and distribute it to other Web sites.

Google executives, reports TechCrunch's Michael Arrington, have taken to calling it "Clown Co." (Google did not respond to a request for confirmation.)

"This is a game changer for Internet video," said Peter Chernin, president and chief operating officer of News Corp., in a statement. "We'll have access to just about the entire U.S. Internet audience at launch."

Aside from the fact that anyone on the Internet has access to the entire U.S. Internet audience and then some, access doesn't necessarily translate to interest. The soon-to-be-called-something venture will have to deliver tremendous value to users to dampen enthusiasm for YouTube.

And it's clear that the joint venture aims to deliver value to content owners, first and foremost, as can be discerned from this statement from Yahoo CEO Terry Semel: "We believe that this relationship underscores Yahoo's respect for content owners and copyrights."

YouTube was not built on respect for content owners and copyrights. And while that may be the source of its current legal troubles, it is a symptom of the diminishing relevance and realism of copyright's monopoly in the digital era and of the overreaching hubris of content owners who interpret their rights to be absolute.

Fresh-faced YouTube's obvious appeal -- it delivers more than 100 million video views a day -- to the Internet audience and its youthful fans, not to mention Google's 25%-and-rising share of online ad revenue, has become a source of admiration and misery among aging media companies long accustomed to being the main attraction.

News Corp. and NBC Universal plan to create their own media player that will appear on whatever-it's-eventually-called.com, as well as on partner sites such as AOL, MSN, MySpace, Yahoo, and possibly even YouTube. Chernin, according to Business 2.0, specifically disavowed the notion that the new venture aimed to kill YouTube.

The broadcast networks and movie studios, however, wouldn't mind more cash and control to sustain and protect all that expensive content they produce. While Viacom pursues that goal in court, suing Google and YouTube for copyright infringement, News Corp. and NBC Universal are aiming to build an Internet video business in territory already staked out by Google, Microsoft, Yahoo, and high-profile upstarts like Joost.

"This is a significant development because it's one of the first serious attempts by traditional TV and film providers to gain a mass audience on the Internet," said Cynthia Brumfield, president of media consultancy Emerging Media Dynamics, in an interview. "However, pulling it off is another matter. Broadcast networks and Hollywood studios are not known for their ability to place nice with one another. Conflicting agendas, not to mention clashing egos, could make this alliance a nonstarter."

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