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Why Channel 4’s YouTube deal should be an eye-opener for games companies

By on October 16, 2009
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Channel 4 has just announced a groundbreaking deal with YouTube.

All titles from C4’s 4OD on demand service (the equivalent of BBC’s iPlayer) will be available, at full length, shortly after broadcast. It will also offer 3,000 hours of archive programming including Brass Eye, Ramsay’s Kitchen Nightmares and Teachers. Content will be available in 2010 and only to UK viewers.

Quoted in the FT, C4 Chief Executive Andy Duncan said:

“There is no point in being Canute-like. We have got to go where the consumers are and some members of the public increasingly want to consume programmes online…We are trying to avoid some of the mistakes that the music industry made in failing to make deals with popular platforms”

Where’s the money

This is an implicit admission by Channel 4 that 4OD was struggling to get direct traffic despite on-air promotion. YouTube is where people go to watch videos. Channel 4 will be selling the ads (and obviously making the content) with 30% of the revenue going to YouTube. In effect, Channel 4 is outsourcing the distribution in the same way that it doesn’t own transmission towers for free-to-air content. There is a risk – that YouTube will own the customer, not C4 – but the massively larger audience is likely to make up for that.

Pay attention games companies

So, for those (particularly publishers) who are slow to catch up with this Internet thing, I’ll explain – no, there isn’t time, I’ll sum up:

  • Channel 4, with all of its advantages of free cross-promotion from its multiple free-to-air TV channels, has decided that it is better to go where the audience is.
  • The audience is on a distributed media site: YouTube
  • Channel 4 is moving with the times, not fighting a rearguard battle to protect its old position.

Contrast that with major games companies who don’t have a Facebook strategy, an iPhone strategy, a browser-based strategy or a PSN/XBLA/WiiWare strategy.

If Channel 4 can wake up and smell the coffee, perhaps it’s time that you did too.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com