YouTube Strikes Content Deal With NHL

Video sharing site YouTube, now owned by Google, has struck a deal with the National Hockey League (NHL) to distribute NHL video content on its site, and share the ensuing ad revenue with the league.

The NHL will provide daily short-form video content to YouTube for the 2006-2007 season beginning this month. Clips will include video highlights of NHL regular season games, available within 24 hours of the original broadcast, and other on- and off-ice footage.

The deal will help the NHL reach a new audience, as well as better connect with its existing fans, Kevin Donahue, VP of content for YouTube, said in a statement. “Today’s agreement demonstrates how major sports leagues are realizing the powerful benefits YouTube offers in terms of growing their audience and creating a new channel for generating revenue,” he said.

The league will have its own “Brand Channel” on YouTube, a section of the site that will prominently feature NHL videos and NHL branding. Brand channels were launched in August with one featuring socialite Paris Hilton.

Using YouTube’s “Claim Your Content” program, the league will have the option of removing unauthorized NHL content uploaded to the site, or claiming that content as its own and sharing in ad revenue. That program, which was announced in September and is expected to be live by the end of the year, allows professional content creators, including record labels, TV networks and movie studios, to automatically identify their copyrighted content in any video on YouTube’s site and decide if they want to remove that clip, or authorize it and share in the ad revenues generated by the clip.

This is the first distribution deal YouTube has struck with a professional U.S. sports league, though it has made similar deals with movie studios and TV networks.

While advertisers targeting sports fans will undoubtedly find this appealing, this move and similar ones with other professional content providers address bigger concerns advertisers have about the nature of content to which they are exposing their brands, Greg Pomaro, VP of media solutions at Avenue A/Razorfish, told ClickZ.

“The issue of advertiser concerns, and the relative value of the NHL content, is affected more by the need to filter content and target, or isolate, message delivery than by the content’s quality. The nature of the content is more important that its production values,” Pomaro said. “Advertisers are wary of having their message placed in context with controversial content; seen to be supporting content that does not reflect well on their brand.”

Earlier this year, the NHL offered video highlights of its Stanley Cup playoff games for sale on iTunes, and ad-supported on NHL.com. It has also announced plans for a social networking community, NHL Connect.

Marketers have shown increasing interest in video advertising on user-generated sites like YouTube, but are also a bit wary.

U.S. online video ad spending has grown 82.2 percent since 2005, to $410 million in 2006, making up 2.6 percent of total Internet ad spending, according to an eMarketer report released last week. And it’s expected to grow another 89.0 percent next year, reaching $775 million, or 4.2 percent of the total, and should reach $2.9 billion, or 11.5 percent of overall Internet ad spending, by 2010.

Google announced its intention to acquire YouTube last month, and the deal closed earlier this week. It was comprised mostly of Google stock, currently worth $1.79 billion, minus a $15 million cash infusion Google gave YouTube last month to cover its expenses. In addition, Google has set aside $200 million in stock to cover potential legal bills for copyright violations.