June 26, 2006 9:40 PM PDT
Warner Bros. strikes deal with video-sharing site
Guba customers can rent a film for $1.79 per day or pay $9.99 to own an older title. Newer movies cost $19.99. All the content is protected by Microsoft-developed digital rights management software, the companies said.
The agreement is the latest sign that at least some in Hollywood may be ready to deal with Internet sites that some in the movie business consider a threat. Warner Bros. last month announced that it had chosen file-sharing technology from BitTorrent to distribute films. For Guba, the partnership is a coup. Like most other competitors in the video-sharing space, Guba has seen its public profile eclipsed by the juggernaut, YouTube. Thomas McInerney, the Guba's CEO, said he hopes the Warner Bros. partnership will help the company stand apart from rivals.
McInerney has pounded the pavement in Hollywood in hopes of striking such a deal. One of the hurdles to forging relationships with the studios is protection of copyrighted material. At some of the top user-generated video sites, including Guba, users often upload clips from their favorite TV shows or movies.
While these videos can draw a lot of viewers, the content is often protected by copyright law. TV networks and studios have warned YouTube, Guba and many of their competitors to remove such materials. In one of the most famous cases, YouTube complied with a request by NBC last February to remove a "Saturday Night Live" clip called "Lazy Sunday: The Chronicles of Narnia," which had become a mini Internet sensation.
"There is clearly demand for professionally made content online but there's too few legal ways to get it," McInerney said. "I think right now is the beginning of a trend where you'll see studios making content available so people can access it."
Besides offering films and TV shows, Guba plans to stand out by being one of the few video-sharing sites that is profitable. McInerney said his company, which began as a subscription service and now also generates revenue through ad sales, never had enough money to operate on a deficit. When Guba launched in 1998--online video's prehistoric period--McInerney remembers spreading the parts from his company's first computer server on his kitchen floor and building it himself. Back then, the viewing quality of Internet video was poor; streams often froze and were grainy.
McInerney bided his time. His company stayed small, kept costs down and waited for bandwidth and video-player technology to improve.
"My first 100 users were all from Jordan," McInerney recalls. "I thought 'Boy, if I people in Jordan are interested in this, there's no telling how big things can become.'"
28 commentsJoin the conversation! Add your comment