NBC, News Corp. Create New Video Source

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Calling it the “largest Internet video distribution network ever assembled,” NBC and News Corp. announced plans to launch a Website with clips of their shows and others’.

The yet-unnamed joint venture, slated to launch this summer, will launch with distribution partners including Time Warner’s AOL, Microsoft’s MSN, News Corp.’s MySpace and Yahoo! and will offer free, ad-supported video clips and full-length television programs and movies for sale.

The key to the deal is ubiquitous content distribution, said News Corp. President/COO Peter Chernin and NBCU  President/CEO Jeff Zucker in announcing the deal.

“Ultimately, we believe this is just the beginning,” Chernin said. “We expect the site, or we hope it to be the biggest video destination on the Web.”

The site will offer consumers aggregation, control and ubiquity of content; offer copyright holders adequate protection, control over the look and feel of their shows and an opportunity for premium monetization; and offer advertisers one-stop shopping, safe premium video content on the Web and scale, according to Chernin.

NBC, News Corp. and other major content owners like Viacom and its corporate sister CBS have floated plans to launch some kind of content aggregation Website to ensure that Google’s YouTube would not have a singular stronghold on online video.

Those talks never led to anything concrete because the partners could never agree on specifics regarding revenue sharing and whose content would be most prominently displayed at any given time, according to sources familiar with the talks.

NBC and News Corp. were united in their efforts throughout those talks with “unwavering support” due to a “mutuality of purpose,” Chernin said.

ABC has always been clear that the network will distribute its content online only through its own Website and through those partners who it deems adequately display its branding. CBS, meanwhile, has had less of a defined strategy, pairing with YouTube and Google Video, but opting out of the initial launch of the NBC/NewsCorp. site.

Although this new product is being launched on the heels of a lawsuit Viacom filed against YouTube, its timing was not tied to Viacom’s actions, said Chernin. He said it would be a mistake to call the new site a “YouTube killer.”

News Corporation and NBC U are open to talking with anyone who respects the copyright protection and economic terms of the new site and had spoken with Google’s Eric Schmidt this morning, Chernin said.

Exactly what the economic terms of the site are are unclear, but a joint sales force from the new company will sell the ads and the content owner and distributor will split the revenue.

Chernin and Zucker were unclear on how the site would prioritize which content would be most prominently displayed except to say the site would be designed with the consumers and their preferences in mind.

The site's distribution partners will be able to embed the new site's content on their Websites in customizable players. Player content will contain advertising which will be sold cross-platform.

Sites affiliated with the founding companies, like IGN and iVillage, will have the opportunity to become distribution partners at a later date, and NBC and News Corp. are in talks with other third-party sites, as well as their affiliates, about being additional distribution partners.

Content available at launch comes from across News Corp. and NBCU's stable of broadcast and cable channels and includes NBC’s Heroes, Fox’s 24, Bravo’s Top Chef and FX’s The Riches. The site will also include movies such as Borat, Little Miss Sunshine and The Devil Wears Prada, which will likely be for sale at prices similar to those used by Websites who currently sell movies.

Both NBC and News Corp.’s Fox will continue to stream episodes of their shows on their own site. Their executives stressed the new site would offer advertisers and other content providers that putting shows on a network’s own site alone could not.

“Large distribution, a good revenue share and content protection – those are the three key reasons anyone who believes in disseminating content as widely as possible would want to be part of it,” said Zucker.

The new company will be located in New York and Los Angeles and will initially be run by NBC Universal's Chief Digital Officer George Kliavkoff. A permanent management team, along with further advertisers, will be announced soon.

Initial advertisers on the site include Cadbury, Schweppes, Cisco, Esurance, Intel Corporation and General Motors.

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