NBC, News Corp. To Set Up Video Site

Mar 23, 05:00 AM

Current Headlines: By David Lieberman and Mike Snider

NBC Universal and News Corp. on Thursday unveiled their splashiest effort yet to hang on to people who want to watch popular TV shows and movies on their computer screens.

This summer they will launch a still-unnamed, ad-supported website that will stream mostly free video from their networks and movie studios -- and some user-generated video. They've signed AOL, MSN, MySpace and Yahoo as partners to offer the venture's video on their sites and share ad sales. NBC and News Corp. also still will offer video as they do now on their own sites.

"On Day 1, it will be the largest distribution platform on the Web," News Corp. President Peter Chernin says.

The partner sites will embed the venture's player, which will stream videos but block users from making copies.

A goal of the venture is to divert people from sites such as YouTube, which has let users post homemade copies of the companies' copyrighted material but has made no deal to share the ad revenue their videos generate.

Last week, Viacom filed a $1 billion copyright-infringement lawsuit against YouTube, saying that it found at least 150,000 unauthorized clips from programs including The Daily Show with Jon Stewart and The Colbert Report.

Chernin says the venture "is not a YouTube killer," and Google's video site might become a distribution partner.

"We'd like to be in business with everyone," NBC chief Jeff Zucker says.

They'll need more partners to take full advantage of the Internet video ad market. Online advertising with streaming of TV shows will grow from about $113 million this year to $510 million in 2010, Adams Media Research estimates.

That's why Forrester Research's James McQuivey calls the venture a pre-emptive move "to make sure that YouTube doesn't (gain) the kind of power over the TV industry that Apple has over the music industry" with iTunes.

But YouTube still has a strong hand for cutting deals to show networks' and studios' materials and share ad sales.

"If I'm a studio, and Google offers me a good deal, I'm going to take it," says Jupiter Research analyst David Card. "They have a huge audience."

NBC and News Corp. will offer free, ad-supported streaming of programs including NBC's Heroes, Saturday Night Live, 30 Rock and The Tonight Show and Fox's 24, The Simpsons and Are You Smarter than a 5th Grader? Advertisers already signed include Cadbury Schweppes, Esurance, Intel, General Motors and Royal Caribbean.

The movies will mostly be available as downloads for sale.

The companies declined to provide financial details, but said they'll devote "significant" resources to promotion.

Contributing: Jefferson Graham (c) Copyright 2005 USA TODAY, a division of Gannett Co. Inc.