The big news today is News Corporation and NBC Universal launching what they claim will be "the largest Internet video distribution network ever assembled", with AOL, MSN, MySpace and Yahoo! as the siteÄôs initial distribution partners. It will launch this summer (US). The benefits obviously work both ways - News Corp and NBC get 4 heavyweight Internet distribution partners (all of the big companies, except for Google) and the likes of AOL and Yahoo! get 'premium' TV and movie content from the entertainment bigcos.
Note that Google owns 5% of AOL, so it's not quite as cut and dried as being a 'GooTube killer' - Internet media is a very complex ecosystem. However it is a little bit like the situation with Enterprise web 2.0, where the smaller companies are partnering and consolidating in order to compete with the incumbents. Except in this case it's not so much 'smaller', as 'less popular' - because Google/YouTube dominates the online video market right now.
Another angle to think about here is that it gives the Internet companies in this partnership (AOL, MSN, MySpace and Yahoo!) much more protection against copyright lawsuits. Take for example this recent report from Forbes, which notes that Yahoo is actively avoiding copyright lawsuits in regards to online video:
"[Yahoo CEO Terry] Semel recalled that he was surprised to learn following last year's World Cup final that Yahoo! didn't have a videoclip of French soccer star Zinedine Zidane's infamous head butting of Italian player Marco Matarazzi during the final match. Yahoo!, after all, had built the World Cup Web sites for soccer's governing body, FIFA. No matter: Yahoo! wasn't licensed to use the clip. So while Zidane's head butt became the most widely watched video on YouTube, Yahoo! decided to take "the longer-term view" and refrained from using it, Semel said. "We really wanted to do the best that we possibly could to stay very friendly with the existing suppliers of content," he said."
One point that Forbes didn't make is that Yahoo is relatively short on cash status, at least compared to Google and Microsoft. Today Yahoo is thought to have less than $3B in the reserves, while Google has around $11B. This situation implies a possible catastrophe for Yahoo in the case of a Viacom-like billion dollar lawsuit - almost 33% of their cash in the bank, so it's very risky! This then was another contributing factor, for Yahoo at least, when it came to choosing to partner with News Corp, NBC, et al. Because when compared to Google, Yahoo has a lot less tolerance for copyright lawsuit risks.
It certainly seems like Viacom's $1 Billion game of chicken against Google has paid off, at least in terms of scaring the other Internet companies to get into line and partner with big media.
Thanks Emre Sokullu for the analysis on Yahoo in this post.