News Corp. May Launch YouTube Rival

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News Corp. chief operating officer Peter Chernin told investors at an industry conference Tuesday that the media giant was considering creating a video component to its MySpace social-networking Web site that could rival the wildly popular YouTube.

At the Merrill Lynch Media & Entertainment Conference in Pasadena, Calif., Tuesday, Chernin said that because most of YouTube’s traffic starts at MySpace, it may be time for the No. 1 social networking site to cut out the middle man.

“If you look at virtually any Web 2.0 application, whether its YouTube, whether it’s Flicker, whether it’s Photobucket or any of the next-generation Web applications, almost all of them are really driven off the back of MySpace,” Chernin said at the conference. “There’s no reason why we can’t build a parallel business.”

While Chernin said MySpace’s video efforts are small at the moment, that could change. He estimated that 60%-70% of YouTube’s traffic comes from MySpace.

“It is one of the things we are going to invest in in the next several months, trying to make the site a little bit better, a little bit cleaner, a little bit easier to use,” Chernin said. “Given that most of their traffic comes from us, if we build adequate, if not superior, competitors, I think we ought to be able to match them, if not exceed them.”.

Chernin also added that News Corp. is experimenting with offering some of its studio content on the Web, also through MySpace. “You’re going to see us starting to play more aggressively on the entertainment side of that site,” he said.

On the cable front, Chernin said negotiations with operators regarding its Fox News Channel are ongoing, but he expects them to be contentious at best. While he would not say how much of a price increase Fox News is asking for -- published reports put it at $1 per subscriber, per month, up from its current 25-cent fee -- he said the channel has earned the right for an increase.

“I would assume these are likely to be really tough, tough, tough negotiations,” Chernin said. “But I believe [Fox News has] earned the right to get a significant, significant increase. Obviously, [operators] are going to resist that.

“I don’t think you’re going to see anything signed until midnight of the night it expires at the earliest,” Chernin continued. “You may also see us pull the channel from people if we can’t make a deal. I think we're going to have an interesting month or so ahead of us in these negotiations.”

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