Telecom & Wireless
Ramifications of a NBC & News Corp Online Video Pact
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This morning, Doug ran an article discussing some of the inherent problems that could come out of the new video services aimed at competing against Google’s (GOOG-NASDAQ) YouTube. General Electric’s (GE-NYSE) and News Corp (NWS-NYSE) have confirmed a joint venture here.
This is under Jeff Zucker of the NBC Universal unit of GE and Peter Chernin of News Corp. This will debut in summer, but the announcement is more potent than may have originally been thought. AOL of Time Warner (TWX-NYSE), MSN of Microsoft (MSFT-NASDAQ), MySpace of NewsCorp (NWS-NYSE) and Yahoo! (YHOO-NASDAQ) will be the new site’s initial distribution partners and the charter advertisers include Cadbury Schweppes, Cisco, Esurance, Intel Corporation and General Motors.
One thing to consider is that a lot of this is ALREADY available, albeit maybe not as robust as the lineup that will be available. But this will essentially now be made available under a centralized location.
An odd twist will be that also may bring the new upcoming Fox Business News channel that News Corp is launching right up against NBC’s CNBC unit. Who knows for sure, because however this is presented today history has dictated time after time that the end product and end offerings will end up looking much different than at the time of the announcements.
The long-haul broadband carriers and downstream storage players have to be licking their chops, let alone some of the equipment makers. Akamai Tech (AKAM-NASDAQ) already brings the video storage further downstream and closer to end-users for many of the partners in this deal. Level 3 (LVLT-NASDAQ) already has a long-haul contract with YouTube that was assumed by Google (GOOG-NASDAQ), although the terms and timeframe are unknown since that agreement was made last year and since Google has bought so much of its own capacity out there. Apple’s (AAPL-NASDAQ) Apple TV set-top box probably couldn’t have been shipped at a more appropriate time and NVIDIA (NVDA-NASDAQ) is probably hoping it gets to sell many more higher end GeForce graphic cards.
It is pretty hard not to notice that CBS (CBS-NYSE) and Viacom (VIA-NYSE) are not in the deal, but it’s assumed that because two or more media companies partner up it doesn’t mean they ALL want to partner up with everyone. This might make Viacom reconsider that suit against Google (GOOG) to head for more of a straight partnership in light of this development. Viacom told reuters in a statement that it welcomes the venture because of the respect it will give for copyright protection.
Jon C. Ogg
March 22, 2007
Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.
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