One of the biggest shake-ups in the entertainment industry’s history is unfolding in the United States as media giant News Corp and NBC Universal announce they will launch a free online video site this summer.
The site will feature full-length movies and television shows in a challenge to Google Inc.’s YouTube.
The move underscores how serious a threat YouTube has become to media companies, which fear losing a new generation of viewers who are as likely to be found in front of computers as television screens.
However, the Middle East will be largely unaffected by the colossal battle that will ensue, because video sharing sites like YouTube are typically blocked by state owned Internet service providers and few homes have the broadband required for video streaming.
While NBC Universal and News Corp. compete fiercely for TV and movie audiences globally, their partnership shows the risks executives will take to regain control over content as more consumers turn to YouTube or Apple Inc.’s iTunes.
“This is a game changer for Internet video,” News Corp. Chief Operating Officer Peter Chernin said in a statement. “We’ll have access to just about the entire U.S. Internet audience at launch.”
The Internet video market is key to the future of media and will be vast enough to accommodate competition, analysts said. But one area where YouTube is clearly ahead with consumers is in the uploading of home-made videos – a function that has made the site extremely popular with the younger audience.
News Corp.’s Chernin said the companies “expect this site to be the biggest video destination on the Web” and planned to make the content exclusive to sites associated with News Corp., NBC or the joint venture.
Still, Chernin and NBC Universal Chief Executive Jeff Zucker sought to play down a face-off with YouTube during a conference call to discuss the project.
Chernin, who denied that they view the new site as a “YouTube killer,” said they had even talked with Google’s CEO Eric Schmidt about the venture.
“We are, in fact, willing to sit down and talk to anybody who wants to distribute this provided they meet our economic terms and obviously meet our copyright protection terms,” Chernin said. “We have had a conversation with Eric Schmidt this morning and they are considering this.”
Executives briefed on the project, whose name has not been disclosed, say it will include its own site and allow partners to feature video on their own Web sites. NBC.com, meanwhile, plans to add social networking and video sharing functions.
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