NBCi: Portal play redux
NBC Internet puts all the Peacock Network's content in one portal—and plugs it big time
By Richard Tedesco -- Broadcasting & Cable, 9/24/2000 8:00:00 PM
This week, NBCi reinvents itself with a beta relaunch consolidating NBC's Web properties under one portal umbrella and piggyback off the Summer Olympics and the network's upcoming fall lineup. Executives at NBCi hope to spark consumer interest in its recast Web-entry point with a $55 million on-air campaign.
It's a move that has been in development for the past several months, trumpeted by NBCi CEO William Lansing last June when he touted NBCi as a "big brand." He also told analysts that annual losses would exceed their expectations. Apart from consumers, NBCi is trying to send a message to those analysts with this relaunch and, hopefully, rally its dismal stock price from the current $7-plus doldrums after the free-fall from its $106 per-share peak in February.
But to make believers on Wall Street, NBCi must persuade surfers to search the Web through its portal and buy stuff when they do. Consolidating NBC's content under the NBCi brand should, at least, concentrate more traffic there. "We've taken the different component pieces and woven them together in a look that's seamless," says NBCi President and COO Edmond Sanctis. "We didn't have a unified experience page-to-page. Now we have that."
It also has some clever new wrinkles, including a downloadable "personal agent"-spawned by NBCi's acquisition of Flyswat Inc. earlier this year-that provides search capabilities across all desktop functions. A bandwidth-identification technology detects the speed of each PC connection, pushing the user to narrow or broadband versions of the portal's dozen content channels. Those include MSNBC, CNBC and NBC.com, the network's flagship entertainment site. More NBC entertainment content also will be available.
As the Sydney Olympics run their course this week, NBCi will raise its flag with $15 million worth of 30-second spots interspersed between ball games and long jumps. And if that doesn't spur traffic, NBCi plans to spread another $40 million worth of spots across the new NBC prime time slate this fall. It's all part of the $327 million in promotional credit it can bank on from NBC, along with another $350 million in the bank-literally.
Deals to showcase the new portal with free Web-access services-Montgomery Ward is first up-could also pay off in more patronage. The retailer will distribute a co-branded NBCi Web service in its stores, starting early next month.
The big money question is whether NBCi can surpass analysts' expectations to turn cash flow positive by mid 2002, as its executives are now betting it can. "We're focused on a near-term business that will deliver profitability sooner," says Sanctis, who won't say how much sooner. Toward that end, NBCi has already pared back its staff by 20%.
But analysts are left wondering how well the NBCi brand can compete as a general-purpose portal with the dominant players, Yahoo and MSN, well entrenched above the also-rans. Those also-rans include Go.com, which Disney just recast as an entertainment portal, pulling out of the general-purpose portal sweepstakes while it continues to lose $1 billion a year.
Steve Von der Haar, new-media analyst with the Boston-based Yankee Group, sees the idea of an NBCi hub driven by on-air promotion and e-commerce as a "viable" strategy. "It meshes well with their existing online properties, and they have the potential to make money," he says. "Are they going to be the biggest gorilla in the forest? Probably not. But they could build a nice little business for themselves."
And a nice little business with a tidy little profit lifting that little stock price is more than any major broadcast network has done with a portal so far.
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