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Viacom, Joost and YouTube

Viacom_logo_1 The Viacom-YouTube telenovela took another turn today when Sumner Redstone's firm announced a distribution deal with Joost, the online TV outlet that's built on a file-sharing network. Notably, Joost's network has little in common with its founders' first celebrated creation, Kazaa, or even with YouTube. Rather than letting people add their favorite content to the pool of shared material, Joost restricts users to the clips, TV programs and feature films supplied by the network's managers. In other words, it's like a cable TV video-on-demand service, only the bandwidth is supplied largely by users. It may not be piracy proof -- nothing is -- but at least it won't give bootleggers a global platform to redistribute copyrighted works.

Joost_logo_1 That's not a criticism of Joost or of the deal. Joost offers content owners the chance to reach more viewers and collect more advertising revenue, and the arrangement (whose terms were not disclosed) is probably more favorable to Viacom than the one offered by more established middlemen, i.e., cable and satellite TV operators. What Joost appears to lack, though, are the energy and viral power of sites such as YouTube, where users determine not just what's hot, but also what's available. Remember, what makes file-sharing networks popular isn't just the supply of free stuff, but the comprehensiveness that results when millions of users share everything they've got. Ditto for YouTube, which is transforming from a collection of relatively new video clips into an archive of noteworthy moments in TV history.

Youtube_logo2 Of course, cutting a deal with YouTube won't do Viacom's bottom line much good until Google finds a way to turn the site's popularity into currency. And Viacom probably has the luxury of waiting, given that its networks (particularly Comedy Central) are the source for some of the most popular video clips on the Web. With a presidential campaign starting to percolate, it's hard to see "The Daily Show" or "The Colbert Report" slipping into obscurity just because their highlights aren't available on YouTube. So the company can afford to try a little hardball, assuming it doesn't end up paying for all the non-Viacom videos it forced off of YouTube with imprecise takedown notices.

In the meantime, Viacom is flirting with a possible alternative to YouTube being pushed by News Corp. and NBC Universal. It's also letting fans of its programs grab clips from some of the sites it controls (e.g., comedycentral.com) and plant them on blogs and other websites they control. There are no ads attached yet, so this is more of a research project now than a revenue play. Ideally for Viacom, the clips will lead them to the next YouTube, or maybe just sites with a burgeoning demand for Sarah Silverman. The company can then explore distribution and advertising deals with those sites. IMHO, the biggest shortcoming here is the attempt to decide for viewers which clips to redistribute. The more control Viacom tries to wield, the less able it will be to tap the Internet's peculiar brand of bottled lightning -- that is, the stuff that enabled YouTube to go from zero to 100 million daily video streams in less time than it took "Seinfeld" to become a hit.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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