[opendtv] Analysis: Could A ThemTube Work?

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Thu, 28 Dec 2006 08:59:55 -0500


Digital Media
Could A ThemTube Work?
Louis Hau, 12.21.06,  6:00 AM ET

A joint venture among several major TV networks, designed to compete with Google's YouTube, exists only in theory. And even in vapor form, the notion seems tenuous at this stage, given that Viacom, which had been talking about joining up with News Corp.'s Fox, General Electric's NBC Universal and CBS, has stopped chatting--for now.

But play along: For argument's sake, say those four media titans do somehow figure out how to get together and create their own video portal. Would they have a chance at competing with YouTube?

Maybe. YouTube is huge, but it's not yet invincible. The Internet video kingpin drew 25.5 million unique visitors from the U.S. in November, according to comScore Media Metrix. But while YouTube's meteoric rise blindsided the conventional media companies, they weren't completely asleep at the switch: Fox, NBC, CBS and Viacom's cable networks drew a combined total of about 40 million U.S. visitors to their Web sites in the same month.

The combined network total would be far higher if their other, non-TV-related Web properties were included in the mix. For instance, Fox.com's 1.6 million unique visitors accounted for just a small portion of traffic to all Fox Interactive Media properties, which include social-networking giant MySpace. Fox Interactive had 54 million visitors in November, skyrocketing from 6.1 million a year earlier, comScore said. Meanwhile, the Walt Disney Co.'s ABC, which isn't believed to be involved in plans for a video portal, drew 7.7 million unique visitors in November, up from 3 million a year earlier. So on paper, at least, the networks could theoretically hold their own.

Now for the many caveats. Those unique visitor numbers don't tell the whole story: Plug in the number of people who watch YouTube video streams on Web sites other than YouTube, and the site's traffic is likely to double ComScore's November estimate. And if Viacom really does stay out of the mix, it will take most of the would-be portal's traffic with it--Viacom's stable of Web sites, including MTV.com, ComedyCentral.com and Nickelodeon's Nick.com, account for about 31 million visitors a month.

And it's far from certain that a joint video portal would draw the same level of traffic that reaches the networks' individual Web sites. For one thing, the pretend portal would have to spend considerable time and money promoting a new brand. Meanwhile, a new collective site might accelerate the dilution of the brand identities that TV networks spent years trying to cultivate, such as NBC's "Must See TV" lineups of the '90s, Fox's reputation for edgy programming or ABC's association with big hits like Desperate Housewives or Lost.

But ultimately, consumers reserve their loyalty for programs, not networks. And while it is likely that that the networks are most concerned about slowing Google's Web video dominance, there are other bona fide benefits to setting up a YouTube competitor. A portal directly controlled by the networks could give them greater control over how their content is presented, cut out a distribution middleman and simplify online ad buying, argues James Kiernan, vice president and associate director of digital media and innovation at MediaVest USA in New York.

Assuming it has any staying power. YouTube's success has been built to an important extent on the community that has emerged around the site, a point that News Corp. no doubt understands given its success with MySpace. Even if the major networks succeed in putting aside their competitive impulses to operate a rival video site, they're not likely to get very far in generating a sustained audience if they merely upload programming, says Michael Sherman, chair of the entertainment group at the law firm of Jeffer, Mangels, Butler & Marmaro in Los Angeles.

"You've got to create a community that wants to go on the site,'' Sherman says. "If all they're doing is repurposing CBS or NBC content, I don't think anyone will care.''

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