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Comcast, the US cable group, on Monday became the first media company to sign a content deal with an online video venture being developed by News Corp and NBC Universal.
Under terms of the deal, Comcast will supply clips from its E!, Style and Golf Channel networks for distribution on the new venture in exchange for a share of associated advertising revenue.
Comcast will also serve as a distribution partner, adding its Comcast.net website, which draws 15m unique visitors a month, and Fancast.net, an entertainment site the company plans to launch this summer, to an internet network that already includes AOL, Microsoft, Yahoo, MySpace and others.
The agreement is another sign of the frantic efforts by media companies to move into the burgeoning market for online video, which is fast attracting audiences and advertisers. YouTube, the video site acquired by Google last year for $1.65bn, has so far dominated the field.
Yet traditional media companies, wary of being dependent on Google, are rushing to develop their own online alternatives. Last month, News Corp and NBC announced their venture, which will offer viewers their television, films and other video content and be supported by advertising.
The companies pledged that their roster of distributors would immediately allow the new venture to reach more than 90 per cent of the internet audience.
In spite of those benefits, major content companies have yet to sign on. CBS last week announced the formation of its own online distribution network in what was seen as a rebuttal to the partnership. In a sign of the multiple bets being cast by the companies, Comcast is also part of the CBS network.
George Kliavkoff, NBC’s chief digital officer, said NBC and News Corp had been overwhelmed by requests from content companies, and expected others to follow Comcast’s lead. “It does validate the business model we’ve put in place – both in terms of content and distribution,” Mr Klilavkoff said.
He also noted that Comcast would be supplying video syndication technology to the News Corp and NBC venture.
The deal follows Comast’s acquisition last week of Fandango, a website that includes film information and ticket sales. Comast plans to turn the site into an entertainment portal, Fancast, that will guide users to television, films and other content on a range of digital devices.