Yahoo Inc. and CBS Corp. — have agreed to show news clips from 16 CBS stations in markets including Denver, New York and Los Angeles.
CBS and Yahoo will share advertising revenue generated by the clips, which will appear on Yahoo’s news site, the companies said in a statement. Videos from CBS, the top-ranked U.S. television network, will soon appear on Yahoo.
The deal with the CBS-owned stations announced comes a week after Google, one of Yahoo’s biggest rivals, grabbed center stage in the booming online video market with its US$1.65 billion acquisition of YouTube. The 20-month-old startup has become a pop culture sensation by serving up a mix of homemade and copyrighted clips.
The exclusive deal will enable Yahoo to offer local news from stations in the nation’s largest metropolitan markets, including New York, Los Angeles, Chicago, Boston, Dallas and San Francisco. Yahoo intends to seek news video agreements with other TV stations in markets that are not covered by the CBS agreement.
Attracting Audience
Although Yahoo also offers a section for homemade videos, it has relied primarily on deals with major media companies to attract viewers.
Yahoo already shows national and international news from CBS’s "60 Minutes" as well as Walt Disney’s ABC and Time Warner’s CNN.
The agreement boosts the amount of video on Yahoo’s news site and adds to existing relationships the Sunnyvale-based company has with Time Warner Inc.’s CNN and Walt Disney Co.’s ABC.
The latest deal will allow Yahoo to post 10 to 20 local news clips from each of the CBS-owned TV stations covered in the exclusive arrangement. The stations encompass the nation’s largest metropolitan markets.
Successful Strategy
The formula has worked well for Yahoo so far. Just less than 38 million people in the United States streamed videos at Yahoo in July, ranking just ahead of News Corp.’s MySpace.com and YouTube, according to the most recent data from comScore Media Metrix.
“News has seen a huge growth in video traffic,” said Neil Budde, general manager of Yahoo News. Last month, Yahoo users viewed more than “50 million news videos,” up from “4 million a year earlier,” he said.
Google ranked a distant seventh with 7.5 million people in the U.S. streaming videos from its sites. The gap separating Mountain View-based Google from the video leaders drove the Internet search leader to buy YouTube.
The daily clips will be available on Yahoo’s news site soon. In return for access to the clips, Yahoo will share an undisclosed portion of the advertising revenue generated by the videos — a major lure for TV stations as they try to follow their audience to the Internet.
The CBS stations will feed news coverage to Yahoo from these metropolitan markets: New York (supplied by WCBS); Los Angeles (KCBS); Chicago (WBBM); Philadelphia (KYW); San Francisco (KPIX); Boston (WBZ); Dallas (KTVT); Minneapolis (WCCO); Miami (WFOR); Denver (KCNC); Sacramento, Calif. (KOVR); Pittsburgh (KDKA); Baltimore (WJZ); Salt Lake City (KUTV); Austin, Texas (KEYE); and Green Bay, Wis. (WFRV).
Yahoo’s reliance on video from established TV networks has caused some Internet industry observers to question whether the Sunnyvale, Calif.-based company is being too stodgy in its approach. YouTube and other online video upstarts are thriving by giving Web surfers a chance to watch and rate a potpourri of amateur clips.
"Yahoo almost seems to be telling people what they should be watching instead of letting them make their own choices," said Dmitry Shapiro, chief executive of video startup Veoh Networks.
Yahoo intends to seek news video agreements with other TV stations in markets that are not covered by the CBS agreement, company spokesperson Brian Nelson said.