YouTube Outfoxes TV Foes

And the media companies' slice of any potential online revenue will be even smaller once they have given Microsoft, AOL, Yahoo! and MySpace each their cut. The tech companies, meanwhile, have every incentive to court users to their own sites and dissuade them from heading to those of NBC or News Corp.

This will further help companies grow their slice of the revenue, even though it is the media players who are cannibalizing their own content to draw viewers in the first place.

Damage to television revenue is only the beginning, since both companies intend to put films such as Borat and Little Miss Sunshine -- both popular and fairly recent releases -- online for free.

This will cut into box-office revenue as viewers wonder why they should pay $10 for a ticket for content they will soon get gratis. Box-office revenue totaled $9.2 billion during 2006, according to the Web site Box Office Mojo. NBC and News Corp. subsidiaries accounted for a combined $2.4 billion of that.

DVD and video cassette revenue, meanwhile, will likely be especially hard hit. Consumers spent $24.2 billion renting and buying those items in 2006, according to the Digital Entertainment Group. And DVDs are increasingly important, as they continue to account for an increasing slice of revenue a production generates, especially internationally.