YouTube vs. Fox + NBC + CBS

Michael Arrington reports a very interesting story on Techcrunch:

This is a rumor that just won’t die: The major television networks are considering creating a new online video service joint venture to compete with YouTube.

Here’s what we’ve heard: a few major networks want to create a YouTube competitor, and they have been seriously discussing this for months prior to the YouTube/Google deal. The technology is fairly straightforward, and would be based on Adobe’s Flash platform. The networks would then license their online rights to content to this new service, allowing users to legally watch full episodes of tv shows on the site. Simultaneous to the launch of this new service, the networks would launch massive litigation against Youtube/Google for copyright violations, forcing them to pull the content off of YouTube.

But discussions have stalled. First, Google has offered substantial payoffs to the networks to keep their content on YouTube. Second, complications over how to split revenues from advertising have lengthened discussions. Our understanding is that Viacom and Disney have dropped out of the discussions entirely, but that Fox, NBC and CBS are still trying to put a deal together.