Viacom: Turning off YouTube

Viacom (NYSE:VIA) is fighting to stay relevant in the New Media Age. To this end, the company is denying Google's YouTube its rich content library, such as the Daily Show.

At the same time, Viacom is still going to try to find ways to syndicate its content to many other sites (even small blogs).

I had a chance to interview Chase Norlin, who is the CEO of Pixsy (an online video syndication site). According to him:

CN: "Big media companies are saying to themselves: 'Why should Google, via YouTube, have a stranglehold on media distribution and delivery?' If I'm a top exec of a big media company it makes sense that I'd want to control the delivery and monetization of my proprietary content. This is why I believe you'll see a new competing service, created by the major media companies, that is designed to rival YouTube. They're sitting back and saying, 'why don't we control eyeballs and distribution ourselves?'

"It seems reasonable to think that Viacom would not have requested Google to remove those clips if two requirements were met: (a) that there was a working monetization system in place that compensated Viacom fairly for this content (which cost Viacom a lot of money to create), and (b) that Viacom would be able to control what content was uploaded into the YouTube system.

"Both of these are not really possible at the moment with YouTube. In order for YouTube to build a large index of professionally created media content they'll have to address these two issues successfully."

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.