News Corp and NBC Universal this week jointly announced the launch of the world's largest Web-based distribution network, which will debut this summer with thousands of hours of full-length programming, movies and clips. NBC and Fox will restrict their Web content exclusively to this venture (and their own verticals), while simultaneously offering the option to other content owners.
AOL, MSN, MySpace and Yahoo!--"whose combined reach is 96 percent of the Internet audience," according to News Corp President Peter Chernin--will be the venture's initial distribution partners. Seven charter advertisers have already signed on: Cadbury Schweppes, Cisco, Esurance, Intel, General Motors, Royal Caribbean and a sponsor who asked not to be identified.
Chernin and Jeff Zucker, president of NBC Universal, said the joint venture would offer a different experience from that offered by their respective media Web sites. The yet unnamed company will be located in New York and Los Angeles. NBC Universal's Chief Digital Officer George Kliavkoff will lead the transitional management team. Details of permanent management and branding are expected soon.
The partners said they were open to business with anyone who met their economic and copyright protection terms, and noted they had spoken to Google CEO Eric Schmidt, who was considering the proposition.
In announcing the venture to the press, Chernin and Zucker gave three reasons why rival content providers would consider distribution deals: reach, a good revenue share, and content protection.
"Our distribution partners have all stepped up in an unprecedented way to insure the protection of this premium content," said Zucker. "This really provides for advertisers who want to be associated with hugely important and top-line video."
They insisted they would not better position their product: consumer preference and an independent managing team would determine presentation. And content partners would determine windowing (i.e. timing of a Web post).
As for local stations, Zucker insisted, "All of our content will appear first exclusively on our primary distribution model, which is our affiliates." Emphasizing the promotional promise of the new platform, he said, "this is a real positive for the traditional businesses--we're very mindful of how to build this thing in a way that helps station owners."
There were no plans to date for the local stations to have any profit participation or direct financial benefit from the new venture, though Zucker noted they "potentially could be distribution partners."
