NBC teams with News Corp., AOL and others to form online video site

Associated Press • Mar 22, 2007 at 11:15 AM

NEW YORK - In Big Media's latest attempt to combat Google Inc.'s YouTube, NBC Universal and News Corp. are banding together with AOL, MSN and Yahoo Inc. to form an ad-supported online video network for full-length TV shows, video clips and movies.

The new venture, which has yet to be named, is expected to launch this summer and would allow people to watch many shows online for free, including "Heroes" from NBC and "24" from Fox, which is owned by News Corp.

As YouTube does, the site would also allow users to upload their own videos and share the site's videos elsewhere, NBC and News Corp. executives told reporters on a conference call. The network would also be open to distributing programs from other media companies, they said.

The venture is clearly aimed at countering the explosive growth of YouTube, which has attracted millions of viewers to its homemade and user-contributed video clips, some of which are taken from copyright-protected TV shows.

The news comes just one week after another major media company, MTV owner Viacom Inc., took its own approach toward battling YouTube, filing a $1 billion copyright infringement lawsuit claiming that the site encouraged copyright infringement of Viacom's shows such as "The Daily Show with Jon Stewart" and "SpongeBob SquarePants."

YouTube says it's protected by law so long as it takes down any copyright-protected material as soon as it's asked to.

Peter Chernin, the president and chief operating officer of News Corp., said the new venture was aimed at providing viewers with a "legitimate, easy, widespread way" to view programming.

Chernin also said the venture was open to distributing shows from other programmers, as long as they agreed to the copyright protection and economic terms of the venture. He added, however, that it was unlikely that other media companies would become ownership partners in the new venture.

CBS Corp. and Walt Disney Co.'s ABC network were notably absent from the announcement, but NBC's CEO Jeff Zucker stressed that the new company was "open for business with anyone."

Zucker said the new site would also allow users to buy and download programming, particularly movies, similar to the way that Apple Inc. sells TV shows and movies on its iTunes store. He said prices would likely be comparable to those seen on iTunes and elsewhere.

CBS spokesman Dana McClintock said in a statement that the company was continuing to have discussions with Fox and NBC to determine whether it would participate, and in the meantime, "we wish them well." McClintock said CBS would continue to pursue interactive distribution deals on an "open, non-exclusive basis."

ABC didn't return a call for comment.

The new venture will show programs on its own, yet-to-be-named site and also on the sites of its Internet partners: Yahoo, Time Warner Inc.'s AOL, Microsoft Corp.'s MSN and MySpace, which is owned by News Corp. The programs also would be shown on sites owned by NBC and News Corp. themselves, such as NBC.com and Fox.com, Chernin said. At least one hit show on Fox won't be available on the network at first - "American Idol" - since News Corp. doesn't own the online rights to it. Despite the initial absence of CBS and ABC, Jamie Rizzo, a credit analyst for media companies at Fitch Ratings, predicted that other programmers would likely join the venture, assuming it gains traction. "At the end of the day, they're going to go where there's two things: copyright protection and payment for their content," Rizzo said. Several media companies have experimented with ways to stream video of their shows over the Internet and sell advertising to support it, but no dominant business model has emerged. CBS offers streams of several shows online, and this month is offering free ad-supported showings of NCAA basketball games. Several networks also sell downloads of their shows that can be viewed on iPods, televisions and computers through iTunes. YouTube allows for millions of users to see clips from network shows uploaded by users, but several media companies have fought what they say is unauthorized use of their programming and have demanded that it be taken down. Last year, NBC famously asked YouTube to remove unauthorized "Saturday Night Live" clips of the mock-rap video "Lazy Sunday," which had received huge numbers of viewings. NBC and News Corp. say they have already signed up a number of key advertisers for the network, including General Motors Corp., Intel Corp. and Cadbury Schweppes PLC.

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