If you're a media company, then Google's (NASDAQ:GOOG) YouTube is on your radar. The 800-pound gorilla in the social-clip-sharing jungle has turned itself into an uber-brand on the digital highway. That's why it can be smart for broadcasting concerns to hook up with what is perhaps the search engine's most notable acquisition to date.
CBS (NYSE:CBS) wants to leverage its basketball programming to create an incremental revenue opportunity on the Web. Reuters reports that CBS will tap into the popular "March Madness" zeitgeist -- by the way, the Fool has something even better -- to promote itself to the Internet crowd by distributing clips from tournament events to YouTube users. How will CBS monetize this initiative? Pretty much the only way possible in this case -- advertising. It would be difficult to change the behavior of YouTubers by asking them to pony up for the content, so General Motors will step up to make this worth CBS's while.
Marrying March Madness with YouTube is a great way for CBS to grab digital gold. In case you haven't heard, all of the major media companies -- Disney (NYSE:DIS), Time Warner (NYSE:TWX), News Corp. (NYSE:NWS), and Viacom (NYSE:VIA) -- are fighting for their share of the digital-distribution pie. Since YouTube is one of the premier Web destinations for young people these days, CBS stands to derive a lot of value from the platform's hype, at the very least in terms of brand exposure. YouTube's aura is well deserved -- I mean, where else can people easily search for old, rare content?
That's the problem with YouTube, though, isn't it? There's so much violation in terms of copyright laws going on that the website has been the subject of litigation, most recently a legal attack made by, ironically enough, CBS's former partner in crime, Viacom. The latter's rejection of the platform makes sense, of course -- the company wants to protect its intellectual assets, since it plans on using other sites to monetize them in whatever way it sees fit.
I can see Viacom's point -- and so can Seth Jayson, who recently wrote a useful summary of the YouTube/copyright situation. But I can also understand CBS and its deal with YouTube. Simply put, it seems like a reasonably easy way for the media concern to make a big splash with its March Madness coverage. Google bought YouTube for one reason -- it attracts a heck of a lot of cyber-viewers. CBS, for its part, wants access to a heck of a lot of cyber-viewers. The concept is straightforward.
Maybe the Viacom split was a good idea -- imagine the internal struggle YouTube would have presented to the erstwhile conglomerate. It will be interesting to see how Google and YouTube deal with the Viacom action.
And yes, in the meantime, you can enjoy our take on the tournament season on our own site, with the Fool's special Stock Madness series.
Get some free Takes from the Fool:
- CBS's Radio Blues: Fool by Numbers
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- Gootube Gets Its Due
- Google vs. Apple: Google
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Fool contributor Steven Mallas owns shares of Disney. He doesn't follow the March Madness stuff, but he's aware of its impact. (He definitely follows Stock Madness 2007, though). As of this writing, he was ranked 11,749 out of 24,388 investors in the Motley Fool CAPS system. Don't know what CAPS is? Check it out. The Fool has a disclosure policy.
