June 27, 2006

YouTube's Popularity Lures TV Network

Network to Buy Ads on Site, Boost Site with Spots
NBC has agreed to promote its fall shows on YouTube.com, marking the first time a broadcast network has linked up with a major video-sharing Web site. Under the deal, NBC will buy ads on YouTube and the network will promote the partnership on the air.
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NBC, the fourth-ranked network among 18- to 49-year-old viewers, will create an "NBC Channel" on YouTube featuring exclusive promotional clips for "The Office" and other shows, the companies said Tuesday in a statement.

For YouTube, the No. 1 video-sharing Web site, the partnership is an attempt to wring revenue from its growing popularity. The site attracted 20 million users in May, up from 12.5 million in April, according to Nielsen//Net Ratings. The agreement gives NBC an opportunity to reach out to younger audiences who are spending more time on computers and less time watching traditional television.

NBC is holding a contest for YouTube users that invites video auteurs to submit 20-second promotions for "The Office." The winning clip will air on NBC in August. YouTube in March ran a contest in conjunction with E! Networks that called for users to submit videos for the "Cybersmack" segment on the cable channel's "The Soup" show.

YouTube is among video-sharing Web sites that have captured the attention of young audiences while struggling to find a profitable business model. Until now, YouTube's main page has been generally bereft of advertising, with some ads generated by Google appearing elsewhere in the site.

The company said it plans to introduce a new ad system later this year.

"We are currently building a new, innovative advertising model that will be released in the coming months," YouTube Senior Director of Marketing Julie Supan said in an e-mail last week. "The Google and Yahoo ads are temporary but have allowed us to generate revenue in the short term."

The company is pursuing a business model based on advertising, including promotions, sponsorships, banner ads and ads related to content on the site, she said.

In the Tuesday statement, NBC alluded to the copyright conflicts that have kept networks and video-sharing sites at arm's length until now, saying YouTube had been diligent in keeping pirated material off the site.

Under the new agreement, NBC will promote shows including "Saturday Night Live" and "The Tonight Show With Jay Leno." The network was criticized earlier this year for missing a chance to promote "SNL" after insisting that video-sharing sites pull down clips of a skit from the show that had been widely posted.


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