Chasing the Crowd

Just yesterday, I wrote about the advertising's industry's having embraced some of the more disruptive influences of today's user-centric Internet, and wondered about how other media companies will address the issues at hand as these trends evolve. So today it was interesting to see some headlines that fit right into that line of questioning.

Time Warner's (NYSE: TWX  ) Warner Bros. said it will team up with a video-sharing site called Guba to sell movie and television content. New movies will cost $19.99, older titles will cost $9.99, and rentals will cost a couple bucks a day. The purchase prices echo some pretty old news: The movie studios seem to want to charge prices that sound more like DVD prices (in some cases, you can get DVDs for less), hearkening back to the recording industry's pricing mistakes until Apple (Nasdaq: AAPL  ) came up with digital content pricing that consumers found palatable.

It's arguable that this announcement pales in comparison to Warner Bros.' May announcement that it will peddle for-pay content to BitTorrent users, a much larger -- if more chaotic -- group of people, given the piracy angle. If you haven't heard of Guba, well, neither had I -- Guba currently attracts a scant 500,000 unique visitors per month.

My first question was, well, where's YouTube? YouTube, another video-sharing site that focuses on user-generated content, has built itself a well-known brand in a matter of months. A Wall Street Journal article that discusses Warner Bros.' hookup with Guba points out that YouTube has been luring 13 million unique visitors per month, according to comScore.

Speaking of YouTube, these new trends make strange bedfellows. General Electric's (NYSE: GE  ) and Vivendi's (NYSE: V  ) NBC Universal may have snubbed YouTube hard a few months ago, but it's now playing a little nicer with it. NBC's going to offer promotional, Internet-only pieces through YouTube. NBC is also going to make it easy for users to make their own content related to NBC shows. For example, it plans a competition where it will provide tools through which users can make their own promotional video pieces for its show The Office (as long as they don't violate copyright). That's very much in keeping with the consumer ad revolution I wrote about yesterday.

The way people enjoy video content really seems to be changing at a dramatic pace, and this is a little more proof that old-school media companies recognize that's their big challenge at the moment. The Associated Press noted that NBC's chief marketing officer commented on the YouTube alliance: "The distinction between television and video is becoming murkier and murkier. Rather than putting our heads in the sand and saying this doesn't exist, we're trying to jump in and embrace it." Those who are invested in companies like these should be relieved at signs that they're finally responding -- and expecting a lot of additional change on the way.

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Alyce Lomax does not own shares of any of the companies mentioned.