In a victory for free online video site YouTube, Google has reached a revenue sharing deal with Digital Music Group in which it will post full versions of classic TV shows owned by Digital Music Group without paying anything up front.
The two companies will split ad revenues generated by the video clips, in an undisclosed arrangement. Shows to be aired include Gumby (pictured) and I Spy. According to Tuhin Roy, chief strategy officer for Digital Music Group, "This is the step that needs to happen for YouTube to start monetizing its audience." In a break from standard practice on the site, viewers will be required to watch an ad before viewing free Digital Music Group content. Last week Viacom required YouTube to remove all clips featuring its content since a proper revenue sharing deal could not be reached. In unrelated news, Vodafone's U.K. customers will be able to view YouTube clips updated daily on their handsets.
Sources: Wall Street Journal, Cnet, MarketWatch, ZDNet
Commentary: Google Forced To Remove 100,000 Viacom Clips From YouTube, Google Releases YouTube Buyout Data, Google and Viacom: A Tale of Two Universes (and Stocks)
Stocks/ETFs to watch: Google (GOOG), Digital Music Group, Inc. (DMGI), Vodafone (VOD). Competitors: Viacom (VIA), Gofish Corporation (GOFH.OB). ETFs: First Tr DJ Internet Index Fd (FDN)
Seeking Alpha's news summaries are combined into a pre-market briefing called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only a few seconds to sign up.
