Web wars: The empires strike back

News Corp., NBC Universal team to take on YouTube

News Corp. and NBC Universal announced plans Thursday to launch a video distribution site in the summer featuring thousands of hours of content from at least a dozen networks and two major film studios (HR 3/23).

During a conference call with reporters, News Corp. president and COO Peter Chernin hailed the untitled venture as "the largest advertising platform on Earth."

The deal represents a seismic shift in the ever-evolving new-media landscape, quieting months of rumblings over how and who would be involved in the venture that's widely seen as a counteroffensive to Google's YouTube.

Time Warner Inc.'s AOL, Microsoft Corp., News Corp.'s MySpace and Yahoo Inc. will partner with the two companies to distribute the service to their users, who the companies say represent 96% of the U.S. Internet audience. More partners will be sought.

Each of these portals will have its own embedded player featuring the video content, which will include such shows as "Heroes," "24," "House" and "My Name Is Earl" and such movies as "Borat," "Little Miss Sunshine" and "The Devil Wears Prada."

Not all NBC/Fox programming will be part of the deal, however; missing will be news, sports and Fox juggernaut "American Idol," to which Fremantle-Media retains online rights. However, original material may be generated exclusively for the site, just not at launch.

During the conference call, NBC Universal president and CEO Jeff Zucker said they do not yet have a name for the new company — they have dubbed it "Newco" for now — and would only reveal that it would be available "sometime this summer."

Initially, NBC Uni and News Corp. will contribute equity to the venture. NBC Uni's Web syndication service, National Broadband Company, or NBBC, will provide the technology for the site.

The companies would not reveal financial specifics of the deal but said it would work as unspecified revenue share between the new company, its distribution partners and the content holders. Chernin said Newco will employ a "state-of-the-art revenue split" between the involved companies.
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