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

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:

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.