Hearst-Argyle (a US television station owner) has cut a deal to distribute video clips on YouTube, the companies announced today. With the arrangement, news, weather, and clips from other local programs in five markets – – Boston, Manchester in New Hampshire, Sacramento, Pittsburgh, and Baltimore – – will be available on the video-sharing site, as well as clips of high school sports, among other material.
While this deal appears to mark the first time YouTube has made a deal for local video, the company has allied with NBC and CBS in the past. As recently as March, CBS tapped YouTube to create an NCAA channel for streams of the basketball games.
The agreement marks the first revenue sharing agreement between Google, YouTube and an independent television group.
What it means: Brilliant! To expand their online reach, Hearst-Argyle has chosen to sign a distribution agreement with YouTube, the leading video site. In addition, to motivate their distribution partner, they are also doing revenue sharing. Given that online is much more fragmented than offline, traditional media has no choice but to embrace the wholesale model. This allows the media company to sell an online product with a reach that approaches the offline one (insuring a smoother revenue transition between offline and online). I suspect that we’ll eventually see that strategy happen in the directory space as well. Given that many directory players are showing their print display ads in their destination site, it’s not too much of a stretch to distribute that content elsewhere, in decentralized online destinations. Paid distribution agreements will be part of the deal.