After months of negotiation, today NBCU and News Corp. announced they’ve reached a deal to create a video site with thousands of hours of clips and “unprecedented reach.” MySpace, Yahoo, MSN and AOL have signed on as distribution partners, and each site will carry embedded video players customized to their look. “This is a game changer for Internet video,” said Peter Chernin, President and COO of News Corporation. “We’ll have access to just about the entire U.S. Internet audience at launch. And for the first time, consumers will get what they want — professionally produced video delivered on the sites where they live.” Content will include free, full-length, ad-supported TV shows and movies with personalized playlists and mashups. Charter advertisers include Cadbury Schweppes, Cisco, Esurance, Intel Corporation and General Motors. No name has been announced for the new site as of yet, but NBCU and News Corp. say they’re committing significant resources to promote its summer launch. The site was born out of frustration that YouTube and other video sites were stealing the spotlight as well as revenue. Initially, Viacom was part of the conversations, but it pulled out. This is a very aggressive play by NBCU and News Corp., and its wide distribution should tap into new audiences that don’t normally watch their content on NBC.com or Fox.com.
PRESS RELEASE — NEW YORK, March 22, 2007 — News Corporation and NBC Universal will launch the largest Internet video distribution network ever assembled with the most sought-after content from television and film, it was announced today by Jeff Zucker, President and Chief Executive Officer, NBC Universal and Peter Chernin, President and Chief Operating Officer, News Corporation. The video-rich site will debut this summer with thousands of hours of full-length programming, movies and clips, representing premium content from at least a dozen networks and two major film studios.
AOL, MSN, MySpace and Yahoo! will be the new site’s initial distribution partners. Their users, who represent 96 percent of the monthly U.S. unique users on the Internet, will have unlimited access to the site’s vast library of content. This media alliance will offer consumers free long- and short-form video and create a compelling platform for advertisers, targeting the rapidly growing audience of online video consumers. Charter advertisers include Cadbury Schweppes, Cisco, Esurance, Intel Corporation and General Motors.
“This is a game changer for Internet video,” said Peter Chernin, President and Chief Operating Officer of News Corporation. “We’ll have access to just about the entire U.S. Internet audience at launch. And for the first time, consumers will get what they want — professionally produced video delivered on the sites where they live. We’re excited about the potential for this alliance and we’re looking forward to working with any content provider or distributor who wants to take advantage of this extraordinary opportunity.”
“Anyone who believes in the value of ubiquitous distribution will find this announcement incredibly exciting,” said Jeff Zucker, President and CEO of NBC Universal. “This venture supercharges our distribution of protected, quality content to fans everywhere. Consumers get a hugely attractive aggregation of a wide range of content, and marketers get a novel way to connect with a large and highly engaged audience.”
At launch, full episodes and clips from current hit shows, including Heroes, 24, House, My Name Is Earl, Saturday Night Live, Friday Night Lights, The Riches, 30 Rock, The Simpsons, The Tonight Show, Prison Break, Are You Smarter than a 5th Grader and Top Chef, plus hits from the studios’ vast television libraries, will be available free, on an ad-supported basis, within a rich consumer experience featuring personalized video playlists, mashups, online communities and video search. Plus, the extensive programming lineup will include fan favorite films like Borat, Little Miss Sunshine, Devil Wears Prada, The Bourne Identity and Bourne Supremacy with bonus materials and movie trailers. Post-launch, plans will be considered for acquiring additional content as well as producing and licensing original programming for the new site’s audience.
Its launch distribution partners will provide the biggest potential reach of any player on the Internet. Moreover, the new site will actively seek agreements with a variety of additional distribution partners.
“This new venture is further proof that the Internet is now a full-fledged entertainment medium, and we are delighted to serve as a major online distribution partner for the quality content produced by these media powerhouses, as well as a provider of strategic services to the new venture,” said Randy Falco, Chairman and Chief Executive Officer, AOL.
“This partnership is completely aligned with our continued investment in video on MSN and will allow hundreds of millions of our consumers to tune into a vast library of high-quality, safe and legal online video,” said Kevin Johnson, President, Platform and Services Division, Microsoft. “Our alliance proves that you can deliver quality online video entertainment and protect intellectual property and copyright at the same time. We look forward to working together to explore additional opportunities to distribute this content across other Microsoft services and devices.”
“By delivering the new site’s content to our more than 65 million users, we can build on MySpace’s position as a leading destination for online video, and enable content creators to tap into the power of social networking,” said Peter Levinsohn, President of Fox Interactive Media. “The ability to embed video clips within over 160 million profile pages will empower members of the MySpace community to view, share and truly interact with some of the entertainment world’s most popular content.”
“We are excited to be a part of this landmark partnership that connects people to the content they care about. As the most visited site in the U.S., this deal gives Yahoo!’s users unprecedented access to their favorite shows and offers them engaging content in a premium video format,” said Terry Semel, Chairman and Chief Executive Officer, Yahoo! Inc. “We believe that this relationship underscores Yahoo!’s respect for content owners and copyrights and positions us as one of the premier distribution sites on the Web for entertainment programming.”
Each distribution partner will feature the site’s content in an embedded player customized with a look and feel consistent with each site, making the offering organic to each destination. The new company will offer innovative advertising sales propositions by being able to sell cross-platform — on-air and on-line. Post-launch, sites affiliated with founding companies, including iVillage and IGN, will also have the opportunity to become distribution partners.
The new company will be located in New York and Los Angeles. A transitional management team led by NBC Universal’s Chief Digital Officer George Kliavkoff, along with an experienced group of executives from NBC Universal and News Corporation, will work together to launch the site. The company’s permanent management will be announced shortly, along with branding details and additional advertising partners. Each company will devote a significant marketing and promotional budget to the new site’s launch.
News Corporation and NBC Universal are creating this strategic alliance at a time when Internet users and advertisers are embracing online video as never before. In January, there were 123 million unique video streamers and downloaders (comScore Video Metrix). In 2005, video streams totaled nearly 18 billion, and that amount is expected to triple by 2010 (AccuStream iMedia Research, 2006). And research firm eMarketer estimates $410 million was spent on online video advertising in 2006, an amount that is expected to almost double this year.
