NBC's objective: broadband and streaming ads

-- Broadcasting & Cable, 3/19/2001

The NBC-NBCi-MSNBC troika is largely unchanged despite consolidation at competitors. "I'm not sure that route would make the most sense for us," says Martin Yudkovitz, president, NBC Digital Media, and executive vice president, NBC. "There are certain parts of NBCi that work very well that we want to continue to exploit. Likewise, there are certain parts of the portal business that haven't worked out as expected."

For all the swings in stock prices at both NBCi (where NBC has a 40% stake) and MSNBC partner Microsoft, the game plan stays in place. "The beauty of Microsoft and [NBC parent] General Electric is that we're highly diversified with exceptionally strong balance sheets. Sure, GE's stock is down; MS' stock is down. But unlike a dotcom, that's not going to effect our day-to-day business practices."

At MSNBC, the "retrenchment" has actually seen an expansion in preparation for broadband. "We're transforming our company to make it much more video-based," says MSNBC Senior Vice President and Editor-in-Chief Merrill Brown. "We have changed our mindset from thinking of ourselves as an Internet news site to a production company creating content for different platforms." MSNBC is outsourcing some of the back-end operations to enhance streaming capabilities. "We have deals with Akamai and the Microsoft Network. We're not going to solve every technological problem related to high-speed distribution. We're a content company."

To help drive broadband adoption, MSNBC has forged a number of deals with DSL and cable-based services. Their goal is to create the streaming-ad market. "The beauty of streaming ads is that the ad world gets it," says Brown. "It's a very familiar model, not a reinvention of advertising. Also, it combines the magic of video advertising with the direct-marketing component. People can interact with advertisers in ways they can't with conventional TV."