From News Publisher to Production Company

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ECONTENT: You guys are managing some pretty amazing eyeball numbers on a monthly basis. From an advertisers perspective, is that the grabber for them? The numbers? Or are they still looking for more granular, targeted stuff?

BROWN: It depends on the advertiser and the particular campaign on the site. We're able to offer advertisers an array of options through our partnerships with MSN. We have two strategies. One is about mass and amalgamating as many eyeballs as we can in big news situations, whether it's Wimbledon or an election or a stock market move of some consequence. We're about a lot of eyeballs, but we're also about niches. We have a features section, which has advertising relationships with packaged goods companies and cosmetics companies and others. They're trying to reach groups of women at home, and we're also trying to reach males through sports content and other so-called male content.

We have the capability to hit demographic niches because of the scale of some of our secondary sections, and also the capability at the same time to reach the mass.

ECONTENT: Let's talk about the Olympics. It sounds like a good opportunity for you to showboat what you're good at.

[ announced a joint agreement with the Salt Lake Organizing Committee to host and distribute the official Web site of the 2002 Olympic Winter Games. Also, MSNBC recently rebranded its sports section]

BROWN: We do know how to publish under challenging circumstances. We believe in our ability to scale for large audiences. And therefore, we've been sort of changing our next-generation strategy so that we think of ourselves as not just the company producing a 7-by-24 Internet news site, but a production company, producing for multiple platforms in multiple countries and in multiple ways. And I've tried to get lots of people at the company to start thinking about us that way. To think about what life is like when there's an Internet appliance in every room and MSNBC is on it. What's that world like? To start thinking about a world of handheld video, and what handheld video really means. And what are the products we need to think about in that environment? Handheld video is coming. It's a certainty. We've all seen the latest devices. They work extraordinarily well in contained circumstances.

So if we think about ourselves as a production company, the Olympic strategy fits right into that because the Olympics are about taking our skills and adapting those production-company skills to a new venue of real scale that presents real opportunities for us. That's one part of the Olympic strategy.

The second part of the Olympic strategy has to do with our sports strategy, and our sports strategy has been a little, shall we say, stop and go. We have not made the full commitment yet to sports we've made in news. But with the Olympics, we are now beginning to [realize] that we need to get to know the sports marketplace much better than we do. Obviously, NBC is a player in sports. The Olympics now gets everybody engaged in both a content development and a commercial way in sports-gets everybody engaged in ways they weren't previously. We'll now meet advertisers we hadn't really been in conversations with before. We'll now be involved in the sports marketing community in a way we hadn't been before. So it's really important for us for those two things. Number one is it affirms our evolution as a production company, and secondly it gets us engaged in sports in ways that we really hadn't been until now. It gives us an opportunity to drive home the fact that we are rather than this difficult brand we were trying to develop called MSNBC Sports. We're now sort of fully integrated with NBC sports in ways that maybe we weren't previously, and that's a great platform for us.

ECONTENT: What recommendations can you give to other content providers?

BROWN: Patience.

ECONTENT: Well, you were talking about monetizing things, do you see revenue streams from your content outside of advertising? Charging a subscription? Charging pay-per-view for premium services? You're in a different channel than a lot of other folks.

BROWN: I think in ten years we'll be offering niche pay channels, but I don't think the mass-market news we do today will be a paid product anytime soon. We're always thinking about all these mini-payment systems, and I'd love to be able to get fifty cents a month out of people one of these days. That may be coming at some point soon when the technology is perfected. I think by the end of the decade, we will be in some niche services and maybe micro-payments will finally arrive, but no time soon.

ECONTENT: Even for specialty content? BROWN: Well, we have one specialty service. We're in the fantasy sports business, and maybe in our expanded sports capacity we have a capability of growing that. That's a subscription service. And there are other niches that may come along. NBC may at some point get in the big-event, pay-per-view business. That could come in concert with MSN, but I don't see, anytime soon, something like "Pay us an extra $20 bucks to see the election."

ECONTENT: So the revenue model is a pure advertising model?

BROWN: We have no business plans whatsoever that call for anything other than a majority percentage of revenue from advertising. On our scale, I think that's a reasonable proposition. To be a niche site in this marketplace and have only an advertising-driven revenue plan is a precarious place to be. I don't think that's true with us, with 20-some million people coming through every month. We need to make a business out of that, and we ought to be able to make a business out of that. We're a media company.

ECONTENT: The economy notwithstanding, are you exceeding your revenue expectations?

BROWN: Everything about our business model, but the current advertising revenue situation, is exceeding our expectations. The scale of the audience, the commitment our users have to us, the amount of content we're able to produce, the effectiveness of our video offering. It was really hard to foresee in 1996 exactly how this was going to play out. I thought this was a big opportunity, or I wouldn't have moved from Westchester County to Seattle, Washington if I didn't believe that. And I did that because I really thought this was a chance to do something very special and important, a chance to be involved in something like being in television in 1948, where you can really invent the medium, and I feel pretty good about what we've done to do that. There's only one glitch in it, and that glitch, hopefully, we'll get past. That's why I said patience is really important right now. And the cable industry holds many lessons in that regard. People were impatient with cable in the early '80s, and they got out and left a lot of money on the table. The Internet holds similar, if not more, promise.

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