Looking to take bites out of YouTube

Lisa Napoli Mar 22, 2007

KAI RYSSDAL: What do you do when a new company pops up and steals some of your business? Business you’ve worked decades to build, that’s worth billions of dollars?

If you’re NBC and News Corp, you start up your own new company. The two have made a deal with Yahoo, Microsoft, and AOL to distribute television shows and movies online. Raise your hand if you think that sounds a lot like YouTube. Marketplace’s Lisa Napoli tells us that’s exactly the idea.

LISA NAPOLI: For over a year now, most of the major media companies have been talking amongst themselves about starting their own sort of “Me Tube.” What wasn’t clear was which ones would sign on.

Forrester’s James McQuivey says the fact that NBC and News Corp did show some old-guard media have finally seen the light.

JAMES MCQUIVEY: This is a very big mind shift. Because in the old days, the Internet for these networks was seen as a way to show clips, tease people, make them watch it live. Now they’re acknowledging, oh — they want to watch the whole thing.

But experts say deciding to put your content up on the Internet is one thing. Getting two massive, publicly-traded companies to do it together is another.

Tech analyst Paul Kedrosky says Internet history shows these kind of alliances usually take twice as long to launch as expected, and hardly ever work.

PAUL KEDROSKY: These are more political posturing and people satisfying. This desire to do something, anything, and let’s just redirect some cash flow to look what we’re responding to something that’s a perceived threat.

As opposed to doing what Viacom recently did, which is to decide to sue YouTube and its parent, Google, for copyright infringement.

Kedrosky says, as for the creation of a rival service, that’s just the sincerest form of flattery.

KEDROSKY: From Google’s standpoint, it’s a big, wet kiss. I mean, you know, this is great. You guys just go knock yourselves out negotiating how you’re gonna actually make this thing work, cause it just means you’ve got less time to spend chasing us around the block.

And yet another case study in new media rattling old media’s chains.

In Los Angeles, I’m Lisa Napoli for Marketplace.

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