NBCU Reaches Deal to Sell Ads on YouTube Videos, Including 'Tonight Show' Clips
September 30 2015 - 2:20PM
Dow Jones News
By Mike Shields
NBCUniversal has reached a deal with Google to sell ads for the
first time alongside the media company's videos on YouTube.
This will mark the first time that ads will accompany clips from
NBC's "The Tonight Show," which has become a viral sensation ever
since Jimmy Fallon became the show's host in early 2014. NBCU will
sell the ads itself.
Like other media companies, NBCU had held back from selling ads
on YouTube over the past few years. While these traditional
companies rarely commented publicly on their negotiations with
Google, privately they voiced concerns about YouTube's standard ad
revenue terms, which gives YouTube a 45% cut of the ad revenue and
media partners the remaining 55%. Big TV companies, in particular,
often balked at receiving the same ad revenue sharing terms as
average independent YouTube creators.
NBCU, which is a unit of Comcast Corp., and Google declined to
discuss any specifics about the ad revenue terms of the new
partnership.
The pressure to reach a deal was mounting. When video clips went
viral, the network didn't make a penny off them, and rivals
recently started allowing commercials on YouTube. Just a few weeks
ago, ABC reached an agreement to sell ads alongside clips from "
Jimmy Kimmel Live" on YouTube. CBS has been running ads prior to
clips of Stephen Colbert's new late-night show from the get-go. And
NBCU itself had just established an elaborate distribution deal
with AOL that included "Fallon" clips.
Linda Yaccarino, NBCU's chairman of advertising sales and client
partnerships, declined to share any specifics on the deal, but
implied that the company had been naturally headed in this
direction given its ongoing embrace of digital media.
"Over time, it's not a coincidence, we've been able to form
better partnerships," she said. "So strategically, this is a
logical turn of events. You've see us make the AOL deal, and
investing in Vox and BuzzFeed. So this makes sense. We are really
getting aggressive in terms of getting our content to as many
consumers as possible."
Regarding the YouTube negotiations specifically, she added,
"Over a long period of time, between the two parties trying to
figure this out, and with marketplace conditions [shifting], an
opportunity emerged that made sense."
The new YouTube/NBCU deal includes selling ads on everything
from clips of E!'s "Keeping Up with the Kardashians," to USA's "Mr.
Robot" and NBC's "Late Night With Seth Meyers."
But the "Tonight Show" videos are the marquee property for NBCU
to sell here. Mr. Fallon regularly posts videos from his show that
generate millions, if not tens of millions, of views. For example,
a recent Lip Sync battle featuring Ellen DeGeneres has generated
over 12.6 million views in just a few weeks. NBC estimates that
these clips will account for a 20% incremental reach for the show's
linear TV audience.
Among advertisers, the demand for advertising in "The Tonight
Show" is "literally insatiable," said Ms. Yaccarino. "There is not
enough inventory to go around."
Write to Mike Shields at mike.shields@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 30, 2015 14:05 ET (18:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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