Is the soon to be launched “largest Internet video distribution network ever assembled,” doomed before it even sets video sail?
After all, the who needs YouTube strategic alliance engenders coopetition risks between News Corporation and NBC Universal, the venture’s founding partners. What’s more, not only are the deal’s principals direct competitors, so are its founding execs!
Can Jeff Zucker, President and CEO of NBC Universal, and Peter Chernin, President and Chief Operating Officer of News Corporation, really get along for the sake of the greater who needs YouTube good?
Tsvi Gal, as CIO of Warner Music Group, extolled cooperation with the competition in CIO Magazine with “Five steps to successful collaboration with your biggest rival”:
We CIOs are loyal to our companies. But when we attend conferences, we find ourselves face to face with IT executives from the competition. Then, a funny thing happens—we discover we share a common language and common challenges. This leads to the question of whether we could cooperate on some things even as we compete on others.
The music industry is notorious for its egos and its inability to cooperate. So when my IT department and I decided to preach cooperation—in the form of a shared royalty administration system—among the companies that record and publish music, we took a risk of being handed our heads.
Developing the system ourselves would have meant a massive investment at a time when the industry is contracting. Music companies cross-license their products, and it would be easier to exchange information if we all followed a single application program interface. Co-opetition presented a new revenue opportunity. We could set up an independent joint venture that would sell access to the system to other companies in the industry—kind of like what ADP does for payroll.
The Five Steps
1) Call the lawyers
2) Find the right partner
3) Build a business case
4) Fight FUD
5) Enlist supporters
There may be 11 media contacts at the bottom of the NBC Universal-News Corp. official announcement, as Larry Dignan points out, but the companies they represent all seem to be on board with the “Five steps to successful collaboration."