YouTube is in talks with content owners including ITV, Channel 4 and Sony Pictures to stream long-form video in the UK as the battle to own online TV heats up.
The Google-owned video-sharing site is drawing up plans to go head to head with Hulu and TV.com, both of which are reportedly preparing UK launches.
All three are scrambling to become the de facto long-form video content provider following the vetoing of Project Kangaroo, the joint venture between BBC Worldwide, ITV and Channel 4, by the Competition Commission earlier this year. One TV industry executive described the arrival of such online TV aggregators as “the battle of the year”, as viewers pick their favourite service.
YouTube is understood to be kicking off a service in the UK which will then be rolled out to five European territories. A senior source at Sony Pictures, which has agreed a US deal for YouTube to host content from its video site Crackle, confirmed negotiations were underway. “YouTube’s aim is to do something with long-form. We are in discussions with it about that,” said the source.
Other insiders at ITV and Channel 4 confirmed the broadcasters are in similar talks with YouTube. Earlier this year production company Endemol signed a deal to distribute full-length shows including Fear Factor and Ready, Steady, Cook via YouTube in the UK.
Simon Danke, director of digital media for BBC Worldwide, said long-form content deals would allow YouTube to boost its ad revenues. “It makes sense for YouTube to move into long-form given the success of sites such as Hulu,” he said. “There’s more opportunity to create compelling ad formats.”
Danke refused to confirm whether BBC Worldwide was in negotiations with YouTube but said the distributor was committed to offering viewers access to its shows wherever they watched content.
In May 2008, Google CEO Eric Schmidt said working out how to make money from YouTube was the company’s “top priority”. As part of this renewed bid to grow profits, YouTube is close to launching pre-roll advertising around professionally produced short-form content. It was unavailable for comment as new media age went to press.
YouTube’s reach was demonstrated last month after a Fremantle-owned Britain’s Got Talent clip of singer Susan Boyle generated more than 85m views on the site and gave her worldwide recognition.
However, Sarah Johnson, analyst at Screen Digest, said YouTube’s position at the top of the short-form video site charts doesn’t mean it will own the long-form space. “YouTube has a huge reputation in the UK but as a user-generated content provider,” she said. “It will have to undergo some rebranding to increase awareness that long-form content is available.”
Johnson added that any long-form content site must secure highly prized catch-up content from broadcasters as well as less popular archive material.
Nigel Walley, MD of media consultancy Decipher, warned broadcasters against locking into long-term deals with YouTube which could clash with potential future deals with IPTV providers.
He added he was sceptical about the role the internet will play in long-form content distribution. “There isn’t a significant consumer opportunity,” said Walley. “We can’t see a business model emerging from what viewers are doing in any great numbers.”
Behind the headlines
YouTube launched long-form video content in the US in October 2008 with a range of partners including broadcaster CBS and movie studio Sony Pictures. Rival video-on-demand service Hulu is backed by Disney, NBC Universal and News Corp, and has reached 41m people in March since its launch in October 2007, according to Comscore.
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