Viacom exits viral-video conglomerate

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Viacom has walked away from a proposed joint venture among the media conglomerates to mount a competitive response to YouTube, according to sources.

The departure of Viacom, home to the young-skewing brands of MTV Networks, deals a potentially fatal blow to a collaborative effort that would unite NBC Universal, CBS Corp. and News Corp. in a plan to launch a viral-video alternative to the Google-owned site. The Walt Disney Co. reportedly pulled out of discussions weeks ago.

Viacom declined comment.

Before Viacom's pullout, one executive at one of the aforementioned companies who wished to remain anonymous characterized chances of a deal as "50-50," with the potential for talks to drag on into the new year.

The proposed site allegedly would target YouTube with a mix of user-generated video and video culled from the wide variety of broadcast and cable networks in their collective grasp. That likely would force Google to better police YouTube of copyright-infringing material from those networks or fork over massive sums to clear said content.

That said, should a counter-YouTube site see the light of day, sources suggest that Viacom could still be in a position to license its content to the venture without having an actual stake in it.

Complicating the joint venture is a web of deals already in place between Google or YouTube and the media companies as well as their own competitive stances against one another. For instance, CBS and YouTube are enmeshed in a shortform content deal, while News Corp.'s MySpace and MTV Networks' Atom Films are fighting over available advertising dollars online.
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