Here's the question, and it's a brutally tough one, for executives at NBC and Venice, California interactive pioneer Spiderdance, which specializes in creating tools that allow for synchronized, real-time online counterparts to TV shows: can anybody make money from online programming? Or to be blunt: is there a "Weakest Link" here?
On broadcast TV, NBC has hit a home run with Weakest Link—a top-rated quiz show differentiated from most in the genre by a brutal pace (new questions are fired at contestants every couple seconds) and an acerbic host, Anne Robinson, who bashes faltering contestants with putdowns: mental eunuch! dunce!, and far worse.
Capturing the acerbic, cut-throat flavor of the TV show in its online edition is just the start of Spiderdance's challenges. It also has to capture lots of eyeballs and, most importantly of all, it needs to prove that there are dollars in these cyber counterparts to hit TV shows.
It seems a no-brainer at first glance: instead of yelling answers at the screen, participatory audience members can log into a Web site (www.weakestlink.com) and answer questions in real time. "Quiz shows are the low hanging fruit when it comes to creating online versions of TV programming," says Spiderdance CEO and co-founder Steve Hoffman. Add in opportunities to chat with other fans of the show along with a 24/7 game that is always available for play by hard-core fans and, suddenly, the online adjunct to a hit TV quiz show looms as a significant tool for building and extending audience relationships.
An Online Partnership
Although not designed from the ground up to include an online component, Weakest Link began developing its interactive edition soon after the program's launch in spring, 2001, says Stephen Andrade, NBC vice president interactive development and business affairs. One reason: arch-competitor, Who Wants to Be A Millionaire? already had an online version. A second reason: "We always had the idea that we wanted an interactive accompaniment," says Andrade. "We felt it was something that adds to the game's entertainment value."
When it came to picking a company to create the online adjunct, there was little hesitation on NBC's part, says Andrade. "We talked to a couple of companies besides Spiderdance. But Spiderdance impressed us; they have their finger on the pulse of what we want. The people working there understand what TV people are looking for a little better than some of their competitors. And," adds Andrade, "they offered us a compelling business proposition."
Exactly what business proposition? Hold on for those details, but first understand precisely how Spiderdance, which has a track record of broadcast-related online successes for the History Channel (History IQ), TBS (Cyber Bond), and MTV (webRIOT), works with NBC. The process is meticulous, painstaking, and the aim is to fully reflect the fundamentals of the hit TV show. Case in point: while the questions used online all are initially developed for the TV show, Spiderdance develops appropriate online creative materials, such as arch comments on a player's performance ("Congratulations! You probably passed 9th grade!"). In each instance, "these messages have to go through NBC's standards and practice group," says Spiderdance president and co-founder Tracy Fullerton. The challenging part, adds Fullerton, is that the online version needs to be created and then vetted at warp speed: "We get the tapes, we create the content, later that day, we send the material off to standards and practices, and we get it back, usually in one hour. Everything has to happen very fast to meet deadlines."
"We have got this down to a science," adds Andrade, but he adds that, in many ways, what Spiderdance is providing to the network is something that Hollywood is accustomed to. That it's digital and online, of course, is new but, "if you think about it, the Hollywood model has been to have third parties supply programming to us. We are used to the collaborative process," says Andrade, "and in any collaboration, different sides are doing different things, just as happens here."
But this isn't to say Spiderdance doesn't have to jump hurdles and the biggest challenges are probably technological, says Fullerton. For instance: "The exact synchronization is challenging." That's because in the live online version of Weakest Link, Internet play is synched with the broadcast version and the aim is to precisely match, second by second, what's happening on air. With new questions flying at contestants every few seconds—and with the show's generally frenetic pace—this isn't easy to pull off, but Spiderdance says it has the technological backbone to keep up with the pace.
The Secret Sauce
The secret: Spiderdance's proprietary TruSync technology, a distributed client server system that monitors the time of a TV show and keeps the online version in precise synch. A plus of Spiderdance's TruSync, says Hoffman, is that it's designed to work with everything from a 28.8 modem on up. "We have spent three years perfecting this technology. It definitely works," says Hoffman.
Another technological challenge: "This is one of the largest shows on television"—usually upwards of 10 million viewers tune in—"so in the first five minutes, we get a huge influx of users coming into our system," says Fullerton. Spiderdance hosts its own online sites and, says Fullerton, this crush of users "could easily crash a Web site. We built out a server system specifically to handle this traffic."
In a contract wrinkle, Spiderdance had little choice about that. "We gave NBC service level guarantees," says Hoffman.
Adds Andrade: "From their point of view, the back-end is the expensive part, but performance has been a big concern for us." He explains that the plan with Weakest Link has been to remind viewers during the show's airing to check out the Web site and play online. NBC knew that prodding could trigger a stampede and, in the past, some of broadcasting's online pioneers had, in fact, bumped into problems. Servers had crashed and, to TV executives, this is just not forgivable. "We did not want to have that situation. We were very careful in dealing with Spiderdance. Television people are not used to seeing the signal going out," says Andrade.
He goes on to point to a key difference between online and broadcast properties: "One of the things that make broadcasting so profitable is that there are no incremental costs for additional viewers." Air a bottom-rated show and, in terms of the costs of transmitting that material into the airwaves, there's not a dime's greater expense to put out, say, the Super Bowl or another top-rated property.
"Online is very different," says Andrade, "and it's something many people don't understand. Each new user adds an incremental cost. To get the capacity to handle lots of viewers costs money."
Spiderdance (with $6 million in equity funding from Macromedia, Comdisco Ventures, and Sierra Ventures, plus another $3 million in debt financing), says it has the bankroll to comfortably provide the necessary technology infrastructure. Besides, says Fullerton, "the people who are participating online are very important people. They have made a commitment to Weakest Link. And we want to be up and running for them on a consistent basis."
One worry that simply doesn't cross NBC's mind: it doesn't envision the Web-based game poaching viewers from the TV show. "My feeling is that when you play the game, you really cannot appreciate it if you are not also watching the TV," says Andrade. In this world, in other words, players have a TV set and an Internet connected computer in front of them, at least for the synched versions of the online game that are available when the shows airs (8 pm Sunday and Monday).
That said, however, NBC is quick to give the Spiderdance edition a big thumbs up: "We know it's compelling to users. We like it; we're happy with it," says Andrade.
Does that translate into an automatic success for the online edition? Well, so far, in the months after the mid-August launch of the online companion to Weakest Link, early numbers look good, say NBC and Spiderdance. Neither will divulge exact traffic—but both insist that while audience numbers sharply spike when the show is airing, online activity stays strong throughout much of the day. "We see strong traffic daily. People stay, on average, 35 minutes per visit," says Fullerton.
The Small Matter of Money
But one massive issue remains to be resolved before pronouncing weakestlink.com a success and it goes back to the business proposition Spiderdance dangled before NBC to win this gig. It boils down to a pair of four-letter words, or lack thereof: cash flow. "We are having trouble monetizing it," admits Andrade.
Spiderdance's pact with NBC precludes the company from revealing the financial arrangement between the two and NBC won't elaborate, either, but, says Hoffman, there are only two ways to fund an online version of a TV show. "One way is when the network pays us upfront. The other way is we work with the network to find advertisers who pay them and then they pay us," says Hoffman.
To make this plain, Hoffman adds that "while we are not allowed to talk about how we monetize it, you can guess which of those two ways is used with Weakest Link."
Bottomline: all signals point to an arrangement whereby Spiderdance's compensation hinges to a large degree upon the emergence of a paying advertiser for the online edition and, to date, no company has stepped up to write a check. For the first several months at least, the only advertising to appear at the Web site was NBC inhouse promotional ads—and that was never the intention of either NBC or Spiderdance.
Will there ever be a paying third-party advertiser? "It's really discouraging to be in the interactive business right now," shrugs Andrade, "because everybody says, advertising will never support this stuff. They don't say that when advertising drops on network TV. But with our space, interactive, they do. But I think it's very hard to make that kind of judgment, especially in this environment. In fact, many advertisers are beginning to actively look at this. I think they are seeing the value in this."
One hitch, admits Andrade, "we are pretty much reliant on the NBC sales force. Their primary goal is to do online sales in conjunction with on-air sales." An upshot is that comparatively lesser attention has been invested in wooing online-only advertisers. But the traditional net- work quiz show advertisers aren't proving to be the innovators who will plunge into the comparatively unknown online interactive space.
"How you value advertising online is something that is still evolving," says Hoffman. He adds: "It's not our business to sell ads. We are technology partners of the networks—that's our business."
At day's end, what's the prognosis for www.weakestlink.com and the online gaming component? "It's really up to Spiderdance," says Andrade. "We believe it's worth our effort. It gives people more exposure to the game. However, if Spiderdance reached a decision where it doesn't make sense for them—well, that is their decision to make."
Will Spiderdance pull the plug on its online support for Weakest Link? "Not in the foreseeable future," says Hoffman. " The Weakest Link is doing great, and we expect it to get even better as NBC continues to promote the interactive version."
Meantime, however, Andrade for one is convinced that—regardless of the hesitation of advertisers—weakestlink.com previews the next phase of TV. "Every TV show is going to have an online accompaniment. Every one. That is the next phase and weakestlink.com presages what truly interactive TV is going to be. But I do not think there is yet an obvious business model—that's what we are still working out. But over time, we are going to figure out how this space works."