NBC launches venture for online video

By Seth Sutel

updated 6:40 p.m. ET Sept. 12, 2006

NEW YORK - Hoping to reclaim some ground won by Internet sites, NBC Universal launched a venture with its affiliated TV stations on Tuesday aimed at providing a legal and profitable way to distribute video online.

The venture, which was originally announced in April, will also include video clips from third parties such as CSTV Networks Inc., The History Channel and others.

Based loosely on the model of the hugely popular YouTube site, members of the venture will be able to add video to the system and also select which clips to play on their own site.

Advertisers will be able to buy ads by programming category but not by specific video clip, a measure that NBC hopes will eliminate any potential conflict with the ad sales efforts of its own affiliates and other parties that contribute content to the system.

And unlike YouTube, which has won a wide following with homemade video clips that any Internet user may post, NBC officials said their venture will have tight controls over which parties can become participants in the network. Clips will also be reviewed to ensure objectionable material isn't shown, they said.

The venture between NBC and its affiliated stations, which will own about 30 percent of the company, seems aimed at easing frictions between networks and their affiliates over how to share the spoils from new ways of distributing video online.

Many network-affiliated TV stations were angered after being left out when networks started selling hit prime time shows — the lifeblood of TV ratings — through outlets such as Apple Computer Inc.'s popular iTunes service.

NBC officials say the network will focus on short clips that will retain high quality standards. At the same time, NBC clearly wants tap into the thriving video-sharing activities that have made sites like YouTube so popular. One early partner in the venture is Break.com, which features user-generated video clips.

"We know that video should be shared organically," Brian Buchwald, the general manager of the venture, said at a news conference at NBC's headquarters in New York. NBC Universal is 80 percent owned by General Electric Co. and 20 percent by Vivendi, the French media and telecommunications conglomerate.

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