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Viacom Goes From Jousting to Joost

By Rick Munarriz – Updated Nov 15, 2016 at 1:06AM

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After its tiff with YouTube, Viacom finds a new online-video buddy.

When Viacom (NYSE:VIA) asked Google's (NASDAQ:GOOG) YouTube to remove more than 100,000 clips that infringed on Viacom's cable property copyrights, perhaps it should have included a forwarding address. Viacom is nearing a video-clip distribution deal with Joost, according to this morning's edition of The Wall Street Journal.

Joost will protect Viacom's copyrights as well as give the media giant as much as two-thirds of the ad revenue. Even though YouTube has struck revenue-sharing deals with content providers in the past, the soft policing of infringing uploads has been frustrating to some entertainment companies.

This should get interesting. Never heard of Joost? You will. The company is founded by the same guys who brought you peer-to-peer file-swapping haven Kazaa and VoIP giant Skype. Their track record is pretty good. So even if Joost has yet to roll out to the public, landing a heavy like Viacom should worry YouTube.

There has always been more to the YouTube site than simply catching clips of Viacom properties such as The Colbert Report, The Daily Show, and SpongeBob SquarePants. However, the competition is getting smarter. The second most subscribed channel on YouTube has ads for rival appearing at the beginning and end of every video. The most heavily subscribed channel on the site uses on its namesake site. News Corp.'s (NYSE:NWS) MySpace has used its status as the undisputed leader in social networking to become a force in user-submitted videos.

Then we have Joost. Promising to make television more interactive, the platform incorporates new features such as online chat into the programming fabric. It should raise the stakes in the viral video space, even though YouTube has been responsive in the past. It wasn't until sites such as Revver began paying its original content providers that Google announced it would eventually share revenue with its users. Battling against sleepy portals such as Yahoo! (NASDAQ:YHOO) and Time Warner's (NYSE:TWX) AOL was a breeze. Creative and hungrier upstarts, however, pose a more dynamic challenge.

Google's site remains the top dog here. Viacom should still find the time to sit down with YouTube to see whether a deal can be worked out. The opportunity to promote its own programming while making incremental revenue through ad deals is too juicy to pass up. However, if the two parties can't broker a deal, it may be YouTube that has more to lose than Viacom at this point.

The video revolution is growing, and opposing armies keep popping up in unlikely places.

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Longtime Fool contributor Rick Munarriz is a huge fan of Google, and it would be his homepage if it weren't for taking up that piece of real estate. He does not own shares in any of the companies in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


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