NBC Universal’s Beth Comstock

April 2007

By Anna Carugati

As media companies large and small experiment with the new-media world, looking for the best and most remunerative ways of offering programming to viewers, NBC Universal has already found several. Beth Comstock, the president of integrated media at NBC Universal, leads the team that is charged with driving the company’s digital strategy and its business, content and distribution efforts. She has overseen the launch of numerous successful websites, as well as broadband, mobile and other extensions of NBC Universal’s vast stable of assets.

WS: One of the challenges for media companies today is that they have to share control of content with viewers. How is NBC Universal facing that challenge?

COMSTOCK: We’re just trying to find the right balance. For a brief period of time last year, with the emergence of user-generated content, we were all wondering whether we would go out of business. But we quickly realized, Hey, there’s room for both here, and the pie is growing. But it teaches us a lot about giving up control, and the fact that viewers want to be able to interact with your content. We’re using user-generated content to change the development process of [some of our] television programming. We have a program that was produced by the NBC Universal Tele�vision Studio called Nobody’s Watching, [which] aired on another network. It’s no longer running on that network, so our producers said, “Hey, this has a loyal fan base. Let’s take Nobody’s Watching to YouTube and to the Internet and let the show’s fans help us in the development process.” So now it’s being evaluated for airing on NBC. That’s a clear example of the whole development process being turned upside down on its head. Control was placed out on the Internet and we allowed the online community to figure out the future direction of the show.

WS: What does this do to existing business models? Technology keeps serving up platforms and we don’t quite know what consumers are going to want or how much they’ll be willing to spend.

COMSTOCK: You hit it. The biggest issue facing us is which business models are going to be viable. I guess the first question always is, “Is there a business model?” That’s a good filter. If it doesn’t appear that you’re going to be able to make money, no one can do it for long. But there are a number of emerging business models, and our strategy has been to try them out, to see how they work, and give ourselves some flexibility so we don’t walk into only one. On the other hand, you can’t do everything. Perhaps the biggest internal challenge is, Where are we going to place our bets? Where are we going to put more of our resources? It’s been more than a year since people started downloading video from iTunes. We think that’s likely to stay. We think mobile business models are very intriguing. What we really like about mobile is that there’s a subscriber base, and it’s started to introduce advertising. The models we’re struggling with a bit are the pure content for advertising revenue share. When you think about it, we shouldn’t struggle with that because that’s the way our business was founded. It’s all about advertising. But part of the challenge is that the content we have has value. So that’s where our biggest debates and challenges tend to be—in making sure we’re getting the right value for the content. We believe you can’t just say all content is created equal.

Hopefully we’re not spending too much time in love with the technology, but more time asking ourselves, This is a great technology, but how are people going to use it? So we’re investing quite a bit into research and understanding those behavioral applications as opposed to just being in love with the technology.

WS: And it certainly helps being a large media company because you have resources that allow you to do a little experimenting even if you don’t know exactly what the result will be.

COMSTOCK: Exactly. But there comes a point when you just can’t experiment. The good news for us is we expect that by 2009, our digital efforts will generate over a billion dollars of revenue, so clearly the business model is there. We see that fuelled in large part by online advertising, but also by the [growth] of mobile and download-to-own and some of the other segments.

WS: How did NBC Universal decide to acquire the women’s online community iVillage?

COMSTOCK: What we liked about iVillage was its great base of content and its staying power. It has been around for ten years—it was a dot-com survivor. We liked the fact that they figured out how to monetize it. They had a great sales force. We felt, Wow, if we could figure out how to combine the iVillage assets with our television assets, we’d create a really interesting paradigm by bringing the best of the online community and marrying it with our storytelling ability. And that’s what’s exciting to us.

WS: You touched on storytelling. That still remains a pretty critical element, regardless of the platform or device, right?

COMSTOCK: Storytelling is who we are and that’s what gives us hope that we are going to be successful in the digital age. At the end of the day, people still want good stories. We’ve always wanted good stories. It’s what we’ve done for 80 years. Now that means we have to get good at telling stories in different media. And that’s where we’ve been spending a lot of time. You can’t just take a great movie and repurpose it on your cell phone and say, “We’re done.”

WS: Tell me more about the power of online communities and some of the things that NBC Universal has done with them.

COMSTOCK: Let me start with iVillage because that’s the most obvious one. I think it’s that strength of community that we love. We’re doing an experiment with our own television stations called iVillage Live. We have merged the best of television with the best of community on the Internet [and created] a talk show/online experience where the viewers are actually interacting with the show producers, helping to drive it forward. We’re using the iVillage community. These are women who get together around key moments in life. It could be anything from having a baby to going through a divorce to what do I wear out to dinner tonight? They get together around key issues when they either need the community to help them or they want to use the resources of the community. We’re going to apply that process to a health effort we’ve launched with iVillage, so that you can take the best of credible, medical reference material and marry it with the real homespun advice and the camaraderie of a community.

Bravo is another great example of where community has really taken off. One of the broadband efforts that we’ve launched—BrilliantButCancelled.com—is all about tele�vision shows that we loved but have been cancelled. In November we launched dotcomedy.com, which is a new broadband service. Comedy is a pretty wide genre with a lot of competition, but we’ve got quite a bit of material and the focal point of dotcomedy.com is getting people together as a community to share laughs and insight.

WS: How do you track changing viewer behavior?

COMSTOCK: We do a series of studies where we literally go live with families or live with college students, or live with whatever demographic and we watch how they consume our media and on what devices. And we learn a lot from that. For example, this was the year we saw the computer move out of the home office and into the same room with the television. So [we’ve learned] that, increasingly, consumers of various ages are using both screens at the same time. That is helping us think through how … we create a much richer two-screen experience with our tele�vision programming.

WS: What are your priorities in the next 12 months? COMSTOCK: There are a couple of things we’re keeping our eyes on. The first one is just enhancing the consumer experience and continuing to offer much more storytelling—for example, we now stream all of our television programs online. We’re launching more social networking tools so [online is] a richer experience. So job one is the consumer experience, and that never goes away. Probably the biggest challenges we have involve connecting with our marketing partners, our advertisers, and using digital technology to align them more directly with key segments of the audience. The great thing about digital is that advertisers can target their messages like never before. That is a big priority for us. Another thing we wrestle with and we have to accept is the increasing decentralization of the Internet. The fact is the Internet is being broken up into a lot of disparate pieces, and that means you can’t just aggregate everything in one place. So we have to get used to not only creating these great experiences but also taking content and following consumers wherever they may be. So we’re spending a lot of time in new distribution strategies. Last year we launched a video service called the nbbc [National Broadband Company]. It’s about collecting video and then syndicating it to other sites, knowing that you have to go to where users are, you can’t always expect them to come to you.