NEWS Corporation and NBC Universal will launch a free online video site featuring full-length movies and television shows in a challenge to Google's YouTube.
The move underscores how serious a threat YouTube has become to media companies, which fear losing a new generation of viewers that are as likely to be found in front of computers as television screens.
Another media company, Viacom, last week sued Google for $US1 billion ($1.24 billion) over unauthorised use of its videos on YouTube.
While NBC and Rupert Murdoch's News Corporation (the parent company of News Limited, which is the publisher of NEWS.com.au) compete fiercely for television and movie audiences globally, their partnership shows the risks executives are willing to take to regain control over content as more consumers look to YouTube, or Apple's iTunes, for entertainment.
The two companies also enlisted three of Google's largest rivals - Yahoo, Microsoft and Time Warner's AOL - as distributors of the entertainment on their websites.
"This is a game changer for internet video," News chief operating officer Peter Chernin said in a statement.
"We'll have access to just about the entire US internet audience at launch. And for the first time, consumers will get what they want - professionally-produced video delivered on the sites where they live," he said.
The internet video market is key to the future of media and will be vast enough to accommodate competition, analysts said. But one missing element they noted is the ability for users to upload their own videos - a function that has made YouTube so popular with the younger audience.
"There's plenty of room for multiple players," said Richard Greenfield of Pali Capital. "It's still not clear how user-generated content is going to fit in and it's still not clear that all of these companies won't do a deal with Google over time," he said.
YouTube can still distinguish itself with its popular tools for users to share homemade, as well as professionally produced, material. "It's not actually going to take away from YouTube because it's as much about the social experience as the video. So YouTube is going to be fine," said James McQuivey, an analyst with Forrester Research.
While free to viewers, the site will be paid for by advertising and has already signed on marketers Cadbury Schweppes, Cisco Systems and General Motors.
NBC and News sought to woo additional media companies into its partnership, including Viacom and CBS, which are both controlled by Sumner Redstone, according to people familiar with the matter.
Viacom said it welcomed the new venture as a vehicle for spreading entertainment online while protecting copyright holders. CBS said it would continue to discuss the possibility of working with the venture, among other initiatives.
Google and YouTube representatives were not immediately available for comment.
Executives briefed on the project, the name of which has not been disclosed, say it will include its own site as well as allow partners to feature video on their individual websites.
The venture includes a new internet media player, which will be embedded on partner sites and carry branding of both, they said.
Advertising revenue is likely to be split between the site carrying the content and the company that produced the entertainment, though financial terms were also not released.
While the site will allow users to edit - or "mashup" - some video, it apparently does not have a component for uploading home-made videos.
NBC said separately that it will introduce social networking and video sharing functions to NBC.com, in what could be a challenge not only to YouTube but its new partner, News Corp's MySpace social network.
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