Why Google needs Viacom, big time!

John Battelle to Big Media on Google's YouTube: “Forget the deal.” 

Battelle’s latest “old media doesn’t get it” piece is a rambling follow-up to a Mark Cuban verdict that old media hasn’t figured things out, YouTube things that is. 

Battelle’s confidence in his lack of confidence in mega corporation (but non Web 2.0) content companies is apparently growing. 

Battelle backs up his Web 2.0 advice to “Big Media” with a (almost) wager: 

For now, strengthen your position by using YouTube as a way to promote what you already have. Is that so wrong? I'd be interested in anyone's opinion saying it is.

I already gave my opinion why it is in fact “so wrong,” last weekend refuting Battelle’s own arguments: SEE my “Web 2.0: Does 'old media' get it?.” 

The poster child for "old, big media" versus YouTube, Viacom, gave its opinion yesterday, to Wall Street! 

Is Viacom turning the tables on YouTube?

Google CEO Eric Schmidt has not been shy in claiming the upper hand in the YouTube versus television networks and movie studios high-stakes online video gamble. 

Viacom has been the "old media" player most publicly adamant about retaining its copyright and monetization interests over YouTube’s vaunted promotional opportunity. 

Philippe Dauman, CEO, Viacom, spelled out the company’s digital growth strategy focusing on proprietary innovation and rational partnership distribution deals during his Q4 2006 report to Wall Street. Below are highlights.

1) First major media company to launch immersive virtual entertainment series integrating television programming with virtual world technology. Virtual Laguna Beach and Virtual Hills, have garnered 360,000 registered users, without special promotion  Engagement model in immersive experiences is very appealing for both the user and the advertiser. Viewers watch the show online, go on to mtv.com to watch the after-show and other related features, then go into Virtual Laguna Beach to actually live the show.

2) Rebuilt largest sites to accommodate more advertising units, more content and better features, resulting in more time spent on sites, more marketing opportunities for advertisers, and more revenue. For example, mtv.com’s monthly unique visitors in January increased over 55% year on year and comedycentral.com was up over 90%. Viacom properties receive high CPMs in digital by selling premium content in a branded environment that generates high-quality uniques and premium value for our advertisers. Digital ad sales results reflect this growth and premium positioning: MTV Networks digital ad revenues were up nearly 60% in the fourth quarter, the total number of digital advertisers also grew by 60% in the quarter.

3) Partnering with Joost for ad-supported programming from many of Viacom's brands; Viacom to keep the vast majority of revenues associated with advertising related to content. Expanding relationship with iTunes In 2006, consumers downloaded more than 11 million episodes of MTV Networks programming from iTunes.

4) Developed innovative mobile wireless access portal with Paramount, multi-year licensing agreement with Media Flow, first MTV branded mobile content subscription service,  integration of mobile commerce into BET’s music programming, and a made-for-mobile programming deal with AT Mobile.

WHAT ABOUT YOUTUBE? ANY TAKEDOWN REGRETS?

Fundamental to our digital strategy is protecting the value of our content online. Since we issued the takedown notice, video streaming traffic on our sites has increased dramatically. This is an important validation of our strategy.

Before that takedown, in fact our content, which has been a dominant factor in the professional content that was appearing there because of the nature of our content appealing to that young demographic, our content in fact during the period we were up there was a substantial part of the traffic there.

We are very pleased to have more traffic now since we took down our content from YouTube on our own site because we are able to monetize that for our own pockets as opposed to having somebody else monetize at our expense.

In other words, Google's YouTube needs Viacom more than Viacom needs Google's YouTube!

In the words of John Battelle, “Hear hear.”

ALSO: Google: Why TV networks will trump YouTube and YouTube makes deal with BBC: Who wins?