Old Media Goes After YouTube?

December 8, 2006 by Douglas A. McIntyre

Stocks:  (GOOG)(NWS)(VIA)(CBS)(GE)

Late word is that News Corp’s Fox, CBS, Viacom, and GE’s NBC Universal are cooking up a plan to start a video website to compete with Google’s YouTube. The site would be used for the old media companies to make money off of internet video viewing of their content. It is also a revenge of sorts because the companies believe that their pirated content running on YouTube helped build that business.

YouTube has made offers to most of the old media companies to compensate them for their video content running on the hugely popular site that Google bought last month for $1.65 billion.

Someone tell the old media guys that the plan won’t work. You read that here first.

YouTube is hardly the product of pirated content from studios and TV. That may be a small part of its success, but videos of guys from China lip syncing the Backstreet Boys and "The Human Can Opener" are what drives big traffic to YouTube. Their are not enough idiots at the old media companies to replicate the kind of mad content that is so popular on YouTube.

There is the further product of how the old media video site would get traffic. YouTube has a zillion viewers who view something like a million videos a day.

Where is old media going to find that kind of traffic?

They aren’t.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.

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