Web video is beginning to bloom as more and more households sign up for high-speed Internet access. This development would appear to be good news for Web giants. However, traditional media outfits are increasingly asserting themselves in the area, which could actually be bad news for one Web outfit.
I suggested earlier this week that Yahoo! (NASDAQ:YHOO) might have a tough time competing with the video onslaught being unleashed by Time Warner's (NYSE:TWX) AOL unit. While the AOL case shows big media's advantage via its access to a library of material, a recent story from the Los AngelesTimes shows how traditional media's deep experience in and access to content production can outflank Web outfits delving into original content.
The Times reports that Comedy Central is launching eight Web-only programs on its site. Admittedly, the Viacom (NYSE:VIA) unit's MotherLoad Web channel has only attracted a small audience so far -- its peak week was in December, with 109,000 viewers. But the programs may have a bright future. They are quick and entertaining, ideal for the short attention spans of most folks surfing the Web at home or at work.
More importantly, Comedy Central's ability to pump out eight shows specifically designed for the Web stands in stark contrast to the output at Yahoo!, which has assembled just a handful of programs. For its part, Google (NASDAQ:GOOG) seems to be focused on making alliances with content producers rather than making its own programs, as reflected in its deal with AOL and in rumors swirling that Google might hook up with CBS (NYSE:CBS) to sell TV shows over the Web.
Yahoo!'s commitment to original programming puts it in a tough position as more big media outfits move to capitalize on the potential of online video. Because Yahoo! is now a potential competitor, it may have trouble securing alliances with big media firms for their content. Furthermore, the company is at a disadvantage to traditional media outlets in terms of content production. Unless things change soon, Yahoo! may find that its involvement in content development is counterproductive.
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Fool contributor Brian Gorman is a freelance writer in Chicago. He does not own shares of any companies mentioned in this article.
