In a move to bring profitability to its popular video sharing site YouTube, Google Inc. (NASDAQ: GOOG) has inked a deal with Time Warner, Inc. (NYSE: TWX) to show clips of the company's television shows and movies.
When Google announced back in 2006 that it would be paying $1.65 billion for the popular video sharing site, a lot of critics questioned whether or not the company would be able to turn a profit from the site, which at the time had around 46% of the online video market share.
So far, the answer has been no, but Google told investors last month to expect to see YouTube start turning a profit in the not too distant future.
While today's move will help YouTube add more professional video clips to the site, it is not the first time that YouTube and Time Warner have teamed up. Since early last year YouTube has been showing promotional clips for some of Time Warner's most popular shows from its HBO channel. You can already watch clips from "Entourage," "True Blood" and "Hung" on the site.
Today's deal with allow YouTube to show clips of popular television shows such as "Gossip Girl" and "The Ellen DeGeneres Show" in addition to clips from the Cartoon Network and Adult Swim. You can also expect to start seeing clips from Time Warner's CNN news.
Google is expecting that the deal will give a nice boost to YouTube's advertising revenues. Time Warner will sell ads against the clips, and share that income with Google.
Also part of the deal, YouTube will start to integrate Time Warner's player into the site.
There were no specific financial details of the deal made available at this time.
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Reader Comments (Page 1 of 1)
8-20-2009 @ 12:07PM
e.krabs said...
Yeah, YouTube has the infrastructure to become a revenue generator. The problem is content. So, this has to be a critical deal for Google.
As far as content goes, Hulu is well ahead, and some networks prefer to use their own codec to keep the content in-house (such as abc.com).
Despite Google's considerable strength, they've got a tough fight ahead of them.