YouTube Sips Up Local Content With Rev-Sharing Deal

Google has struck a deal with Hearst-Argyle Television to have local news content from the company’s local TV affiliates made available on YouTube, with the TV stations sharing in the revenue generated when video clips are viewed online.

The deal covers five Hearst-Argyle stations in Baltimore; Boston; Manchester, N.H.; Pittsburgh; and Sacramento, Calif. Content, including news, weather and sports stories from local news broadcasts, will be made available on dedicated YouTube channels.

In addition to local news broadcasts, the content will include a new family of video being produced by the stations, including coverage of local high school sports and local entertainment.

The move fits with the station owner’s larger digital media efforts, including a push to make content available on all three screens used by consumers — the TV, the PC and the mobile phone, said Terry Mackin, executive vice president of Hearst-Argyle Television.

“We can now better engage users and advertisers with our award-winning local video content and with new user-generated content while further broadening our reach beyond the boundaries of our media markets,” Mackin said.

For YouTube, the partnership is part of a larger push to put more local-interest content on the video-sharing site, which in turn opens up new possibilities for tapping into the local advertising market.

“Local creates relevance,” said Jordan Hoffner, YouTube’s head of premium content partnerships.

Local Is as Local Does

The deal would seem to have plenty of room for expansion: Hearst-Argyle owns 26 TV stations in all and manages three more TV stations and two radio stations. With 12 ABC affiliates, the company is the largest affiliate part of that network, though only local content is covered in the YouTube deal.

Google has been working to add licensed content to YouTube since it acquired the site for US$1.65 billion last year. Some of its efforts have been thwarted, with major content owners such as Viacom eschewing deals with Google to embrace other video-sharing sites, launch their own sites and in some cases to sue YouTube for copyright infringement.

Still, Google has made slow but steady progress. Last week, it announced it had licensed music from the EMI library for users to tinker with as they produce videos.

The deal is the first for YouTube involving revenue-sharing with a local television station, and may be just part of a larger effort to create a venue for local video advertising.

Other Web companies have recognized the same opportunity, but Google could create a strong competitive edge if it can accumulate a good supply of localized video content, Sterling Market Intelligence Principal Analyst Greg Sterling said.

“There is still the hurdle of how small local companies produce video commercials, but having the audience and the technology to make it happen would be a head start,” he told the E-Commerce Times.

Using the TV stations’ content as the foundation for local channels may also help users find video they find most relevant, Sterling added.

Ready to Respond

More than half of people who watch video online have visited a Web site or responded to an offer made alongside or within a Web video clip, according to a recent report from The Kelsey Group.

Google will be in the mix, Kelsey Group senior analyst Michael Boland noted, during what he calls the “Wild West phase of experimentation” with local video and advertising.

“YouTube has largely popularized the concept of watching short videos on a computer screen and has likewise familiarized consumers with the idea of watching short video ads,” Boland told the E-Commerce Times. Still, other players, such as local yellow pages providers and portals such as Yahoo, have designs on the same markets.

With professionally produced content from the stations, YouTube may also be able to become a secondary distribution point for video eventually viewed on TV sets again. With YouTube video being made compatible with the Apple TV device, content could go from TV to Web back to TV before finally being viewed by consumers, Sterling noted.