Competing with YouTube

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

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 also would 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 be open also 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 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.

'Legitimate' viewing

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.

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

Zucker said the new site also would 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 likely would 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."

The new venture also will show programs on its own, yet-to-be-named site and also on the sites of its Internet partners: Yahoo, Time Warner's AOL, Microsoft's MSN, and MySpace, which is owned by News Corp.

The programs would be shown also 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.

An evolving area

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.

NBC and News Corp. say they have already signed up a number of key advertisers for the network, including General Motors, Intel and Cadbury Schweppes.