The Video Startup That May Never Launch
This is a rumor that just won't die: The major television networks are considering creating a new online video service joint venture to compete with YouTube. — We first heard about this when the Google-Youtube acquisition news broke, and wrote briefly about it here (see last paragraph).
Context & Ripple Effects
This rumor was born alongside Google's deal: when news of Google's planned [[a:0|]]$1.65 billion purchase of YouTube surfaced, talk began that the major television networks were weighing a joint online video service of their own — and TechCrunch noted it then, in the last paragraph of its earlier post. The logic is visible in the record around YouTube itself: the site hosts a confirmed library of pirated clips, and an anti-piracy detection system is already in play that could buy legal legitimacy at the cost of some of the site's edge.
Two months later the story still has no shape: the JV remains exactly what it started as — an unconfirmed report with no named participants, no announced timeline, and no syndicated pickup beyond TechCrunch's own writeup. Meanwhile YouTube's chief executive insists the site will keep its independent identity under Google, and the site has even sent TechCrunch a confirmed cease-and-desist over Terms-of-Use violations, so the relationship between the press covering this rumor and the platform it concerns is already strained.
First-order effects
- The rumored joint venture hands the major networks a negotiating counter against Google at precisely the moment YouTube needs rights holders most — its pirated-clip library is confirmed exposure, so licensed-content owners hold the leverage whether or not they ever build the service.
- For YouTube, the threat cuts both ways: a network-backed competitor built entirely on licensed content would attack the gap left by the anti-piracy system, which trades away some of the edgy appeal that made the site popular in the first place.
Second-order effects
- Advertisers become the swing constituency: YouTube spent August 2006 building ways for brands to tap its popularity while preserving a noncommercial attitude, and a network JV would offer a cleaner, fully licensed alternative — pulling ad budgets toward whoever owns the content.
- Any move by the big networks forces other rights holders and portals to pick a side — license into YouTube under Google, or join a consortium platform — turning content distribution deals into competitive positioning rather than routine licensing.
Third-order effects
- If the networks follow through, the industry hardens into two camps — user-uploaded scale versus professionally licensed libraries — and every subsequent challenger to YouTube inherits the same question of which side of that line to stand on.
- A consortium-owned platform would also test whether legacy media companies can operate a consumer internet product collectively; repeated failure or abandonment of such ventures would push rights holders back toward licensing their catalogs into platforms others control.
The trend: As professional video migrates online, rights holders keep circling collective, owned platforms as an alternative to licensing into someone else's service — the rumored network joint venture is an early data point in that recurring cycle.