NBC Changes YouTube's Channel

Last week, the NBC TV network, which is owned by General Electric (NYSE: GE  ) and Vivendi Universal (NYSE: V  ) , halted the online distribution of a popular Saturday Night Live video clip. With the distribution of video over the Internet gaining momentum, is this move is a case of NBC biting the hand that feeds it?

Back in December, NBC's SNL aired a hilarious skit called "Lazy Sunday" that featured two "rappers" filling their Sunday with the acquisition of cupcakes, candy, and a matinee of The Chronicles of Narnia. By the next day, the clip was making the rounds online. It had become an unquestionably viral success, mostly thanks to a site called YouTube, which allows video to be shared, for free, among video junkies on the Net.

YouTube was a huge driver for the clip. According to CNET, where I first learned of NBC's move, just one version of the file had been viewed 5 million times (the site had contained more than one version of the file). Many would argue that YouTube's distribution amounted to very good advertising for NBC's SNL, but NBC still requested that YouTube pull the clip.

Meanwhile, NBC is allowing Apple (Nasdaq: AAPL  ) to distribute the clip for $1.99 per download, and in an interesting aside, it has not blocked Google (Nasdaq: GOOG  ) from distributing it for free through its video store, which is currently in beta. (However, one can only imagine that Google won't be immune for long if the networks continue to make moves like this.) Not surprisingly, NBC has the clip available for free on its own Web site, and anyone who uses Microsoft (Nasdaq: MSFT  ) Windows can see it there.

Meanwhile, CNET reported that NBC asked YouTube to remove about 500 other pieces of content. (I guess my days of viewing old clips of the SNL skit "Goth Talk" might be numbered.)

Amid all the buzz about video downloading -- a buzz generated largely through high-profile efforts from Apple and Google -- YouTube has been quietly gaining in momentum. The site had a million visitors in November and 3 million in December, and a recent New York Times article stated that YouTube streams 115 videos per second.

Even so, it doesn't allow users to download videos; it just lets them stream clips that users have posted to the site. What's more, in my fairly limited experience, I've found YouTube clips to be grainy, a reflection of the amateurs who post files to the site. (I would think that quality issues would drive users to purchase clearer, higher-quality material elsewhere after they've gotten a taste of it at YouTube.)

All that aside, this development has nothing to do with quality and everything to do with copyright, much like the recording industry's difficulties with file-sharing. However, according to The New York Times, YouTube has some protection in that it's streaming content to users, not allowing them to download it. If a copyright holder complains, YouTube pulls the clip off the site.

There are certainly logical reasons why NBC would want to nip such movements in the bud, despite the converse argument that content-sharing and the viral phenomenon add up to excellent free publicity. After all, the runaway success of "Lazy Sunday" had little to do with its original airing on SNL. But given YouTube's growing popularity among the young audience that NBC surely covets, I'd have to say that for now, this seems like a rather shortsighted move. Much like the music recording industry's often heavy-handed tactics, NBC's decision to pull the plug might irritate the same customers it's trying to attract.

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


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