NBC’s OnLine Stalking Horse – It’s All About Broadcast Not Web – A Diss on Social Media or Wait An Application of Social Media

Update: The NYTimes’ Brian Stelter has a great story on the success of NBC (he asserts the same point that I wrote over the weekend). Brian writes “NBC treated the Olympics like a research laboratory, and it says it is gleaning information about how people preferred to consume content from its combination of television, online and mobile offerings. (Critics charge that because the network did not stream the most popular sporting events live, its findings are skewed.) Regardless, the network is using the Olympics to assert that TV is the preferred medium of consumers, with the vast majority of viewing — 93 percent — done via television.” – It’s basically a great success and shows that the long tail distribution applies to this great example from NBC of converged media- As the saying goes “It’s all good”.

— my orginal post

NBC’s web site strategy for the Olympics was brilliant from a business perspective. Pump the hell out of it via promotion (like a crack dealer handing out samples) then do the “take away”. Everyone was so jacked to get online coverage – sure they did – Live Ping Pong and Fencing. The big show’s was the TV coverage.

What’s so smart about this move? NBC just followed the money. They have “scale” on the broadcast signal and advertising on TV. The Internet at best is just a social media promotional tool. Why ADVERTISING DOESN’T WORK on the Internet. Better said broadcast advertising techniques don’t work on the web. It’s a simple numbers game. NBC just could never scale up the broadcast online to get the kind of return that they can command on the TV side. An example EMarketer calculated its ad-revenue estimates based on the number of video streams that NBC said it generated during the first seven days of the Games. EMarketer estimated that NBC charged on average $50 per thousand ad impressions. This is a joke on return on the video ads.

So I say NBC was smart. On the user side they just didn’t get the coverage that they wanted, but hell NBC paid for the rights. NBC wins and users loose.

The Wall Street Journal article by Emily Steele frames NBC’s online effort as a failure. No way Emily they did fine. There is no there there online for NBC. The end game was the TV broadcast and TV advertising. The web was a promotional and fringe service.

I’m bullish on online video but the market for broadcasting online is in absolute turmoil.

Henry Blogett has a good take on his blog SAI. Of course I’m biased because he agrees with me. In fact I’m hard pressed to find someone to disagree with me on this post (except the web 2.0 echo chamber).

“Apples and Googles” More Like “Apples and Pears” – Bad News for Enterpreneurs? Where’s the Halfway House –

All the talk about companies being sold, founders getting ousted, and ventures failing or being killed by VCs. This seems to be the trend in Silicon Valley and around the world. The captial markets are a mess. The Wall Street Journal has a story on it today in a post called “Who’s going to fund the next Steve Jobs?”. James Freeman really nails this story and highlights very accurately the ugly trend being witnessed by many entrepreneurs out there right now. This is a big problem with serious economic implications.

This post hits home with me because I’m an entrepreneur living in this market with four kids and it ain’t pretty. The capital markets are in the tiolet and founders around the world are working hard to find no buyers of their ideas or products. It’s a bootstrapping market. The entreprenerial market isn’t broken or starved for good ideas and needed innovation. Instead the ecosystem is stuck in the sand. Incubators are clearly seeing the action and see the need for innovation. Some bright lights are shining out there like Y Combinator among others, but overall it’s pretty dark.

What does this mean?
Bad news for entrepreneurs short term and bad news for innovation long term. M&A doesn’t yield innovation. Passionate and skilled entrepreneurs need the runway to make their visions happen. Lack of exit stunts the available growth capital needed for those next big ‘Apples and Googles”. Big ventures take 3-5 years to develop. Problem today is that capital isn’t founder friendly. Founders getting ousted after one year doesn’t make innovation happen. I’m seeing more founders on the street then ever before. There needs to be a new financial model or new incubator model (or halfway house) for founders and entrepreneurs. Y Combinator calls it a startup for startups.

Big problem is that initial public offerings of young companies had become rare. Venture-backed IPOs in 2005 and 2006 were far below the levels of the early 1990s, never mind the boom years that followed. A recovery in the early months of 2007 still didn’t push IPO numbers anywhere close to the number of young companies being acquired by bigger, more established firms.

Love this passage from James Freeman of the WSJ. “This is bad news for the U.S. economy. Does anyone think that we would be better off if Bill Gates and Michael Dell had sold out to corporate behemoths early in their careers, instead of leading their firms for years as public companies? Would consumers enjoy the same vibrant market in Web services if Yahoo had gobbled up a nascent Google? How powerful would our computers be if Intel had become an IBM subsidiary, instead of going public in 1971?”

“Of course we can’t run these experiments. What we do know is that entrepreneurial drive, combined with venture investors’ money and experience, plus access to the public markets, equaled a tech revolution and an industry that is the envy of the world. That model may be collapsing.”

“True, investment in U.S. venture funds is holding up well despite the market downturn, with investors pouring $9 billion into this asset class in the second quarter. But over the long term, venture investments have to result in a healthy number of home-run IPOs to justify the risks and offset the inevitable failures. The industry cannot continue raising the money to fund American innovation if its returns trail the stock market indexes, as they did for the five-year period through 2007.”

“Some have ascribed the broken venture model to the “cheap revolution,” meaning that, thanks to earlier innovations, the tools to create new tech products are so cheap that entrepreneurs don’t even need funding from venture capitalists. That’s great, but we’re not seeing a flood of IPOs of young companies built without venture money, nor the creation of lots of privately held global powerhouses. By and large, founders of Internet startups are not creating companies with the dream of conquering the world, but rather with the intention of selling to Google, eBay, Yahoo or Microsoft.”

“Our society should be encouraging these entrepreneurs to dream big. Instead, they’re looking for the exit before they have to deal with the burdens of our public markets.”

“An acquisition generally means that the founders move on, see projects they championed get axed, and watch old colleagues get fired. How many company founders would aspire to conduct a sale of the business instead of a public offering, absent some bizarre and unnatural conditions in the market?”

Of course I’m biased but founders and entrepreneurs need to be in charge. Never fire the founder in a changing market.

Note: Steve Jobs was ousted by his investors (Venrock Associates) only to come back and change the world a second time. Can you imagine August Capital firing Bill Gates. Good venture capitalists understand the long term value of entrepreneurship not just the quick flip.

Burn the Village Strategy: WSJ Subscription Firewall – What It Really Means

Emily Steel just wrote a blog post about Rupert Murdocks comments that WSJ will retain the ‘paid subscription firewall’ for the Wall Street Journal Online.   

After I gave WSJ Digital Network kudos for their Davos World Economic Forum coverage at the Davos Daily, I see Emily’s report???  What’s the deal??   Expand blog network and keep the firewall?  It’s called ‘burn the village’ strategy and invest in a differentiated product.

Emily writes:  “Speculation that News Corp. would make WSJ.com a completely free site had been rife in recent months, since Mr. Murdoch had signaled he was contemplating lifting the subscription wall. Mr. Murdoch had indicated that lifting the pay wall could broaden the Journal’s online audience and boost its Web advertising revenue, offsetting any loss in subscription revenues.

Mr. Murdoch made his comments today at the World Economic Forum in Davos, Switzerland, in answer to a question.

“We are going to greatly expand and improve the free part of the Wall Street Journal online, but there will still be a strong offering” for subscribers, Mr. Murdoch said. “The really special things will still be a subscription service, and, sorry to tell you, probably more expensive.”

It’s a “burn the village” strategy for WSJ.  They can provide rapid blogging coverage to commoditize the blogosphere then create a separate product that is highly differentiated and charge for it. 

This plays directly into WSJ’s hands since they invest the most in the talent.  Same is true for the NY  Times, but they have actually integrated blogging into their online site which has no subscription firewall.   Interesting strategies by both companies.  Many have said that newspapers should create blog networks.  

There was a great post and debate about data being a commodity on bubblegenration and publishing 2.o last month. 

Is blogging and free content a commodity?  Lets have some pork bellies with those blog posts.  Meanwhile look for big media companies to “Burn the Villages”.   

Why?  Commoditize the blogosphere then roll them all up.


Best Davos Coverage – Wall Street Journal

The Wall Street Journal has the best Davos coverage coming out of the World Economic Forum.  They have a blog called Daily Davos.  This part of the WSJ Digital Network where they are blogging professionally. 

This is how the WSJ Digital Network describes their coverage at Davos in the Davos Daily:  The Daily Davos provides updates from the World Economic Forum’s annual talkfest in Davos, Switzerland, which draws more than 2,000 business, political and academic leaders for a five-day program of workshops and panel discussions. A team of reporters and editors from The Wall Street Journal and Dow Jones Newswires is on the scene, and will be posting news, commentary and gossip as the conference unfolds.

Folks what we are seeing here is professional blogging.  Great job by the WSJ bloggers.  I’d like to know who the people are that are behind the blogging for WSJ.  For example I know that Eric Savitz is Barron’s Tech Trader Daily.  Linking to a person behind the blogging is easier then some generic face like Davos Daily – there are two brands the blog site and the blogger(s).  I like AllThingsD, but its Kara Swisher who I like to read.   

WSJ Digital Network is a collection of blogs.  Will they partner with other networks.  PodTech currently works with Dow Jones and they should form a strategic partnership with WSJ Digital.