NBC and Fox announced that they will work with a number of major websites including Yahoo!, MySpace and MSN to distribute legally free TV shows and movies.  This appears to be a direct response to Google/Youtube where a lot of illegitimate copies of the shows are available.

And we are talking about hits like ‘24′, ‘House’, Heroes’ and ‘The Devil Wears Prada’.  Being FREE to users.

The model is to join hands and start a new video site that will run content from the two organizers and be supported by advertising. They’ll also supply content and a video player to their partner sites.  So it’s like back to the ‘old’ days where internet services and content will be free to the users but supported by advertisers.

I will be very keen to see how successful it will be.  I think initially the potential lost in sales of DVDs may not be compensated by the ad dollars.  Yet with P2P sharing DVD sales may be hurting anyway so this is quite a bold move by the media companies to try out this new ad-supported model.  I think it makes sense to go to this direction as advertisers will see that more people will start watching video on their computers (or TV via their computers, think Apple TV).  Hence it also makes sense for advertisers to follow their audience and advertise on this new channel.

While it may take some time to see if the media companies will benefit, looks like the clear winners will be users who can enjoy free quality content and those companies who provide the streaming and ad insertion technologies.