Belo Locks Up Local Video Preference on Yahoo
Important Details: Yahoo! News and the CNN Digital Network are dueling it out to be the top news site in the US. CNN has moved in front recently, partly due to its local affiliate, the Internet Broadcasting network of sites (see Insights 21 June 2007, Change in Internet Broadcasting Leadership Highlights Broadcast Network Growth). Now Yahoo! is extending its own local deals. The latest is on the broadcast side, with the announcement of an agreement with Belo Corp to feature news video from 13 of Belo’s local stations on Yahoo! News. The cities include: Houston, San Antonio, Austin, New Orleans, Phoenix, St. Louis, Seattle/Tacoma and Spokane, Wash; Portland, Ore.; Tucson, Ariz.; Charlotte, N.C.; Louisville, Ky., and Hampton/Norfolk, Va., but not Belo’s hometown base, Dallas. Yahoo! says it now has local news video coverage in 18 of the top 25 US markets.
While not part of the Yahoo! consortium agreement, where Belo is one of 22 US daily newspaper partners, this agreement follows both Belo’s consortium membership as one of its founders, and its cooperation with Yahoo! around recruitment advertising, which dates back to 2005. Clearly, the companies are growing together, as Belo uses Yahoo! as a prime distribution channel to get to customers beyond its own newspaper and local broadcast sites. Later this year Belo plans to splitt its newspaper and broadcast properties into two separate companies, a split that has been much discussed as web video becomes as mainstream as web text and increasingly integrated.
Yahoo! News’ showcasing of local newspaper content has grown stronger over the last year, with further plans for 2008 as the consortium activity intensifies. It enables local newspaper stories to receive preference in placement and position on key news pages, and publishers report steady traffic growth accordingly. Now Belo will attempt to gain this Yahoo! bump in news video as well. In addition, Yahoo! and Belo will share in relevant advertising sold.
For Yahoo!, the agreement helps it compete against a number of video competitors, including CNN/Internet Broadcasting, Fox Interactive Media/MySpace and Google/YouTube, the latter of which has been busy with its own deals.
Late last year, Tribune Company also launched a news video distribution initiative, partnering with YouTube. Tribune, which uses news video from both two newspaper (www.youtube.com/chicagotribune and www.youtube.com/orlandosentinel), and three broadcast ( www.youtube.com/wgn, www.youtube.com/ktla and twww.youtube.com/wpix) sites, has created its own YouTube channels, each identified with its newspapers or broadcast stations. The Tribune/YouTube agreement followed a Hearst-Argyle agreement, the first of its kind between YouTube and local broadcasters. That deal, announced in June 2007, was with five Hearst-Argyle stations and has since been extended to more of the Hearst-Argyle’s 26 stations. The YouTube partnerships provide some combination of licensing fees to broadcasters for video usage and advertising revenue share, as Google/YouTube experiments with several forms of advertising.
Implications: These agreements underscore the ascendancy of news video in 2008. It’s real, it’s mainstream and it’s starting to produce real traffic and real money – about a half billion dollars in the US, on a 40% growth trajectory. Producing news video, a considerable task for traditional text companies, is one thing; deciding to distribute it widely is another, and Belo’s move is a smart one, especially given the preferential placement it is getting. While Belo can leverage the content in its own markets, it knows that Yahoo! is very strong in these markets as well, and wants to be in front of those customers. Similarly, Tribune is smart to get its toe in the door, finding new audiences as well.
The Belo announcement is also a sign that newspaper companies have a refreshed local competitor – local broadcast stations. While these stations invested far less in the web early on, and had less to lose (mainly in classified revenue), the ascendancy of news video has given them a new incentive to up their web presence. They are doing it individually, and through local broadcast networks such as Interactive Broadcasting, World Now and Broadcast Interactive Media. They are now a growing competitor, as they leverage video, and compete for web ad dollars with print-based companies. Newspapers companies certainly didn’t need new, heightened, local competition, but clearly they have to reckon with it.