Fox and NBC Join Together to Form YouTube Video Competitor

NBC Universal and News Corp announced on Thursday that the two multimedia conglomerates will be launching a free online video site later in the year, in direct challenge to YouTube. The new site, which will feature full-length movies and TV shows, shows just how seriously the "old" media is taking YouTube, which was purchased recently by Google.

Although NBC and News Corp are competitors for movie and TV audience share, the partnership shows how media companies are willing to forego any sort of monopoly in order to avoid losing more content control. In an era where many people choose to view their entertainment in front of a computer monitor instead of a television, YouTube and the iTunes Store are real threats.

The site, which will be free according to initial reports, has also enlisted Yahoo, Microsoft and AOL as content distributors. Those three entities, not coincidentally, are Google's three biggest competitors. In addition to NBC and Fox television programs such as "Saturday Night Life" and "The Simpsons," the new video site will include such recent movie hits as "The Devil Wears Prada and "Borat."

Although News Corp's CEO Peter Chernin lauds the partnership as "a game changer for Internet video," some experts, such as Richard Greenfield of Pali Capital, isn't convinced.

"It's still not clear how user-generated content is going to fit in and it's still not clear that all of these companies won't do a deal with Google over time," he said, referring to the initial enlistment of Yahoo, Microsoft and AOL.

James McQuivey, from Forrester Research, is also unconvinced the new venture will be any type of Google or YouTube killer. "It's not actually going to take away from YouTube because it's as much about the social experience as the video. So YouTube is going to be fine," he said.

Like the iTunes Store, some of the content would be available for purchase, although a large percentage will be ad-supported and therefore free to viewers. According to Jeff Zucker, NBC's CEO, prices for programs available for purchase will be similar to pricing currently found at the iTunes Store.