Clown Co. pile on

As you no doubt know, NBC and Fox ( and MySpace, Yahoo, MSN and AOL) announced the formation of a yet to be named company (ClownCo. for you Google people) to create the largest advertising platform ever.

From Bloomberg:

“NBC and News Corp. will create a new Web site that features full-length films and television shows, the companies said today. Yahoo! Inc., Microsoft Corp.’s MSN and Time Warner Inc.’s AOL, Google’s biggest rivals, will distribute the shows on their sites.”

From PaidContent:

Zucker: Within hours of word getting out yesterday they had five charter advertisers and two more came in this morning. (One is Royal Carribean.) There will be a separate ad sales force for Newco.

YouTube: Chernin: “This is obviously not a YouTube killer. It it were .. we’d obviously have a standalone site … We’re obviously willing to meet with anybody” who meets business and copyright requirements. They have already talked to Google (CEO Eric Schmidt) this morning.”

From WVfF:

“Based on Yahoo, AOL and MSN’s involvement I’m not sure this is an online video “site” at all. It sounds like a new distribution platform for NBC and Fox. This is motivated by the old “an enemy of my enemy is my friend” theory, but I do think it’s far more sustainable than previous attempts by networks to dethrone YouTube and others. For starters, it will have good content and a wide audience.”

More PaidContent:

“Content partners coming in now will have “extraordinary content protection—IP protection that they hadn’t before. … Any distribution partner is already signed up to protect your content.”

The executive said all of the partners committed to protection beyond the requirements. The deals include filtering of all user-uploaded video. “If you’re getting paid for Heroes on someone’s profile page why would you let the same clip be uploaded by someone?”

One more point: “The content-protection language was negotiated long into the night for the last three nights—no other (prospective) content partners know what we’ve got.”

— a “really favorable rev share on the advertising” (We have confirmed independently that split is 90-10 for equity partners.)

— “the opportunity to opt into a network that gives you immediate access to 96 percent of U.S. internet users”

Lost Remote 1:

“What about affiliates? “Potentially they could be distribution partners,” NBCU CEO Jeff Zucker said. “We’ll be looking at that in coming days.” But currently, no profit sharing for affiliates.”

Lost Remote 2:

“NBC’s owned-and-operated stations division has shown interest in becoming a distribution partner for the new NBCU-News Corp. video site, a NBCU exec tells Lost Remote. As we’ve reported below, NBC and Fox affiliates currently aren’t partners in the new joint venture, but the exec said “there’s no reason why any of the affiliates can’t be distribution partners,” which would involve a revenue share of the advertising. “We want to talk to them.”

Lost Remote 3: round up of MSM comments

USA Today: “NBC Universal and News Corp. … unveiled their splashiest effort yet to hang on to people who want to watch popular TV shows and movies on their computer screens.”

From Terry Heaton:

“While everybody’s whooping and hollering, it cannot go unnoticed that the affiliates take it in the shorts on this deal (again). Oh, they have protections built in (the delay window will be several hours after shows air in Hawaii), but this is certainly a play that by-passes the affiliate system. I suppose the next move would be for broadcast companies to get in on the deal and provide their locally produced content in a similar manner.”

From Terry Heaton’s comments:

“Terry I don’t really see what’s in this NBC/News proposal for broadcast companies like LIN and Belo. Why would a viewer click on a several hour old clip from Wichita Falls News@6? Most local affiliate produced content has the shelf life of a good French baguette — less than a day. Besides the Clownco/Newco revenue model doesn’t leave room for local advertisers. No, this is 110% bad news for the affiliates.”

From TechCrunch:

“There will be no centralized site for the service. Instead, content will be available through distribution partners, who will also receive a small share of advertising revenue. The company also said they will be looking to add many more distribution partners, and users will also be able to embed content (along with advertising) directly into their sites.

The two key messages Chernin and Zucker were selling were (1) a focus on respecting copyright, and (2) the fact that they were creating what they called “the largest advertising platform on earth.” That may be good messaging to stockholders, but it isn’t what the public cares about.

First, the fact that only two networks joined is a really bad sign. Viacom at least should have been willing to join. Second, this group has little experience in creating web applications, and no experience building the kind of stuff, like YouTube, that users get seriously passionate about. Third, the track record of major media companies working together to deal with this kind of viral attack on their business is not good.”

From TechCrunch comments:

“A DRM-ed video full of adverts. Man, how can I get myself some of those! (And this is coming from someone who runs a site that only features videos. You’d think I’d be excited by the prospect of a streaming episode of ‘Heroes’ but sadly no. Not in this format.)”

About Daniel Davenport

Daniel is a digital media executive with internet and broadcast experience. Daniel is currently the executive strategy director at THINK Interactive.

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