Time Warner To Make YouTube Profitable?

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As I pointed out in my Dark Side of Online Video article, Viacom is suing YouTube for all sorts of copyright infringement and that case is being run in conjunction with a class action lawsuit from other quarters. Meanwhile, Time Warner has taken a different tack and has decided to cut a major deal with the Google property.

We can clearly see who is on the leading edge of online video marketing and adopting new tactics here and who is not. Viacom, most likely fearing more loss of viewers for its properties is attempting to sue the skin off of YouTube. While we won’t know the outcome of that for at least another year or so we can see the outcome of other dealings.

Time Warner seems to have seen some value of the video sharing site and just inked a major deal with them (is this the point where YouTube becomes profitable and Google admits it!?).

The agreement covers a wide range of Time Warner properties including Warner Bros, Turner Broadcasting, CNN, TNT, Cartoon Network and its nighttime Adult Swim. That means the likes of Aqua Teen Hunger Force, Ellen DeGeneres, Gossip Girl and CNN news clips will be showing up on the site en masse. HBO, also owned by Time Warner, has already had a branded channel since sometime last year on YouTube.

Time Warner obviously had a clear plan in place as they have retained the right to make branded channels for all of their properties and also the right to sell the advertising space on them. They’ll even use the Time Warner embeddable player we’re told. Shrewd dealings indeed. But still a major win for YouTube as they will have a massive pile of incoming, professional content, and that will certainly drive traffic.

YouTube will host the content and will be included in some package advertising deals for Warner and Turner ad agency partners. That could mean a large chunk of new income for the video sharing site along with new viewers and increased revenue.

Time Warner Chairman and Chief Executive Officer Jeff Bewkes said: “Our agreement with YouTube helps us expand the amount of our promotional content, animation and news that we already make available online. Working with YouTube, we expect to improve our ability to monetize this short-form content through new and creative advertising initiatives.”

The agreement further states that the Time Warner clips can appear across all Google sites and will include advertising which is sold by Warner and Turner. They’ll rev share with the Internet giant. All of this means increasingly flexible ad options and packages for clients.
YouTube will also be allowed to use Time Warner content in marketing and promotional campaigns, including display ads.

The agreement should start seeing results later this year already we’re told.


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