It has taken some time, but YouTube may be putting together a revenue model to justify the big price that Google (NASDAQ: GOOG) paid for the video-sharing site.
Heart-Argyle (NYSE: HTV) which owns a number of local TV stations, will "distribute news, weather and entertainment video" over YouTube. The company will get a percentage of revenue that YouTube picks up from running video ads with the content.
The announcement may put another hole in the logic behind Viacom's (NYSE: VIA) suit against YouTube. While the video-sharing site was clearly showing content from Viacom properties, it now appears that the practice is being closely policed. And, the fact that YouTube can put together reasonable revenue-sharing deals with media outlets is a sign that it is willing to share the benefit with media companies.
Viacom is becoming more isolated in its stance. And that may have to change or it could lose its suit and, perhaps more importantly in the long run, its opportunity to take advantage of the huge YouTube audience.
Douglas A. McIntyre is a partner at 24/7 Walls.
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