Ironically, just yesterday I told readers that I was looking at profiling more startups when today I interviewed Brian Buchwald, co-founder of NBBC. NBBC is in no way an actual startup, but it is acting like one when you consider the ultra-competitive space it operates in.
Buchwald has a very impressive career track record that spans stints at:
- Morgan Stanley’s Technology Group in Silicon Valley,
- Doubleclick’s Director of strategy of corporate development of its technology group as well as
- Head of strategy and business development at Pointroll, which was sold to Gannett in June 2005.
In between those stints, he’s also advised a plethora of impressive firms, from AT&T Wireless on its ecommerce division as well as private equity firms General Atlantic Partners, Archer Martin and BRM Capital. It does not take long to understand that if Buchwald’s not doing something, he’s planning on what to do next.
The Vision of an Online Content and Advertising Marketplace
He eventually joined NBC as its VP of strategy development of digital media (see a trend?), helped identify and acquire iVillage in a $600 million deal. He was armed with some preconceived ideas as to how and why online video should be packaged and delivered, based on two things:
1- no single company can create enough content in a digital media landscape that is democratic [from both the production and consumption vantage point];
2- distribution is limited, and it should not be.
From there, it was a natural process to end up as GM of NBBC. What he’s doing now is leveraging the NBC brand and its affiliates’ strength to move NBBC into online video, a wild space that upstarts like YouTube have managed to scale in, but old media firms have not. In fact, even old new media firms like Google, AOL and Yahoo! had fumbled, evidence by Google’s $1.65 Billion acquisition of YouTube in 2006. For our conpiracy theory on the Google-Sequoia-YouTube, click here.
What is NBBC?
NBBC has “built a platform that allows each of these three businesses (advertisers, publishers and distributors) to connect and profit from digital video syndication. The NBBC marketplace generates profits through revenue sharing and fee-based models. The company is jointly funded by NBC Universal and NBC affiliates and seeks partnerships with all companies.”
Disclosure One
It should be stated at this point, that one such company is WatchMojo.com, our video unit division. Currently, WatchMojo.com is only a content provider, though it would not be unimaginable for us to also be a distributor. I cannot for the life of me currently think of another relevant disclosure in the space other than I watch Saturday Night Live.
Intrapreneurial Spirit
Jokes aside, the entire NBBC brass is quick and eager to note that NBBC is a separate company from NBC. Of course, this begs the question: why choose such a similar name then?
Well, they’re eager, not stupid. That’s why.
Between “best of breed content from NBC and a strong executive team in Jeffrey Zucker and Bob Wright,” NBC is a company and brand that NBBC can leverage in the online video space, admits Buchwald, who maintained that the “evolution that led to the creation of NBBC was rather organic, and not something that happened overnight.”
As co-founder of NBBC, Buchwald started the venture with Michael Steib. He is however candid to admit that while the company is separate from NBC, setting forth his notions around digital video syndication was made possible thanks to Mike’s vehicle and mandate to build a digital video business.
Two Becomes One
Excellent, he brought Steib up. I would have anyway, but this was the opening I was looking for. Steib, it should be noted was the other half of the founding team, whose recent poaching to Google sent some shockwaves, or rather, ripples, in the online video space. Google maintains to be a friend to media, but by poaching a well-respected executive essentially gives old media the one-finger salute: “We’re here to make you money, but we won’t stop at anything to make more money than you,” is how I put it, I believe, in this post.
I asked Brian about Michael’s defection point blank and Brian stated that it was a personal and professional decision and that it simply made sense for him, and that he’d continue to root for Mike, adding somewhat matter-of-factly that he and Mike “were not the most important people” in the room… and that NBBC had many “talented and multifaceted” people.
Be that as it may, the concept and model were Buchwald and Steib’s and indeed, when pioneers leave, if the gameplan is sound and the people staying behind are strong, then the organization can technically not miss a beat.
When Good Things Go Bad?
That’s a big if, some would say. A few people maintain that while NBBC did a lot of good things initially in the planning stage, they have probably left a lot on the table by not really opening up the marketplace, to the point of outright saying NBBC has since “messed it up.”
A Risky Reward Proposition
We’re not sure that is the case, but it’s worth noting Buchwald’s reply: “Big media has a lot to lose,” he argues. ”It’s not a matter of [old media] not being aggressive, it’s that they have billions of syndication dollars at risk.”
“I think you would agree that we’re in the first inning of a ninth inning game…”
True, and perhaps it’s not wise to lose a bundle before you have to, because despite the lofty estimates for online video, online video is very nascent.
Syndication vs. Advertising
This begs the question: is the apprehension due to the potential loss of syndication business or a loss of advertising? After all, while all of online advertising (search, classifieds, sponsorship, display/banners, video) a $15 billion industry, TV advertising is a $75 billion behemoth. The cannibalization effect from either loss of syndication or loss of advertising alone is enough to send Bob Wright into cardiac arrest. Not that we wish that, of course. Just pointing the potential hazard of getting too far ahead with being enamored by the Web when the total online market is 1/5th of the TV market’s respective ad size.
Buchwald thinks that both risks keep some executives up at night, but the sense I get is that not doing anything is worst. Of course, Buchwald is not a typical TV executive by any stretch of the imagination. Having worked at Internet advertising trailblazer Doubleclick, he sees that some ad agencies like Avenue A show leadership to TV folks, but ultimately, he recognizes that “broadcast presents monumental budgets,” and you get a sense that indeed, if online video is to explode, it will have to be at the behest of the TV decision makers. “In the early 1990s, the Web was 2-5% of the total ad buy, now it’s much more, but what we’re seeing is a far more integrated process,” and that ”over time the data coming out of the Web will drive a lot of offline decisions as well.”
He’s certainly right on that last point.
All in the Family
Of course, while the company is itself very young, one hurdle it will always have to overcome is the association is has with NBC. Will this impede other media companies from wanting to work with it due to the relationship with the Peacock Company?
“We have 150 partners… most of the content does not belong to NBC, we have a lot of other third parties who contribute content… of course, we love the relationship with NBC…”
At which point I wonder: would he refer to NBC as a third party partner? But before I can, Buchwald throws out:
“I’d say a lot of people misread our intentions, this is a closed beta, we would open it up a some point, in a closed beta, the question is: how many partners should we open it up to…”
It’s a fair question and valid argument, though it does come across as something that the brass at NBBC uses as an explanation retroactively because the notion of adding quality and migrating away from a common denominator appeal is something that is sorely lacking in this space. In other words, we almost wish they would maintain some kind of order in an otherwise chaotic space.
Admittedly, that is the executive prodcer of WatchMojo.com in me talking, and not the writer covering NBBC. But since he and I are one and the same, I’d say that I am not convinced that NBBC is going about it the wrong way by not fully opening up their platform. There’s not one model that will succeed after all: YouTube and company have the “anything goes” model that some prefer, so it’s wishful that there be an alternative with a twist of, well… craplessness.
NBBC, after all, is an ecosystem that strives to balance the needs of:
- advertisers who want to promote in video content
- content creators who want their videos to be seen
- distributors who want to feature quality content on their site and make money.
Indeed, not all advertisers are comfortable on MySpace (disclosure: MySpace’s parent FIM, which is owned by News Corp. is involved in an ongoing litigation against me) or YouTube.
But in that context, I do not see how different a NBBC is from companies like Roo. Roo, whom we also work with at WatchMojo.com, helps get our content out to more people. It’s in a position of leadership yet only boasts a market cap of some $78 million (disclosure: I own shares in Roo).
Yes, we’re on pace to set a record for a disclosure-laden post…
But NBBC does have more gravitas to pull advertisers to it than Roo does, at least on paper.
And, NBBC can technically scale content from creators and sign distributors… the day they accounced this, I was excited.
Will 2007 Mark the Beginning of Online Video’s Craplessness?
While right now content creators want to hit the widest audiences possible, Madison Avenue does not share that objective and wants to reach, well, craplessness content.
Online video is on pace to grow by a multiple of 5 or 10 over the next few years, but there is really no way for anyone to ascertain how to make the most amount of money off of it without totally alienating audiences. This is something I personally feel very strong about, and that is why we have hitherto shun pre-rolls on WatchMojo.com, knowing that the real winner in video advertising will be an “Ad Sense-esque” type of ad that has yet to be developed…
We wrote about what Google could do to make it lights out for the marketplace here. Sadly, Google is the only company with the search engine prowess, computing power and advertising reach to make it happen.
Frenemies: Is Google a Friend or Foe?
It’s quite noble for Buchwald to say that he will be rooting for his old pal Steib at his new gig Google, but in the end, it’s an arms race and Google is, if not trying to steal the agency role, trying to compete with NBBC and other marketplaces. That is no surprise since it acquired YouTube for $1.65 billion in stock.
He Who Laughs Last Laughs Best?
Of course, Buchwalk adds that you can’t count NBBC out because it too is striving to build a “frictionless marketplace of thousands of publishers and distribution partners,” and while it sounds like bravado, one must note that NBBC has advertising relationships in its DNA; Google, not quite.
Yes, I know that $1 out of every $4 of online advertising spent in the US goes through Google’s coffers but that applies to the individual and small business market; I am not sure if the major advertisers’ shift of marketing dollars will go to search marketing, display or video ads. If it’s the former, Google’s got the edge; if it’s either of the two latter, NBBC has an edge.
NBBC’s leverage with affiliates and third party distribution points ensures that strong quality gets drawn to the ecosystem: “I believe you will see a combination or hybrid of broadcast and narrowcast in the marketplace.”
That is an important consideration: when Bear Stearns Spencer Wang boasted about Context and Aggregation (and Not Necessarily Content) Being King, he was highlighting the kind of trends that would make NBBC a winner, the impact thereof to Google are unclear.
What Do Online Video and Pie Have in Common? Bigger is Better!
The goal, clearly is “trying to make the pie bigger.” As the analogies piled on, Buchwald admitted that he views the gameplan as a “shifting chessboard,” but that it was thus important to know what the chess pieces were composed of.
Being the analogy king myself, that was quite a propos.
Buchwald certainly seems like a man with a plan, encouraging simplicity, ease, transparency, reporting and self-service to make the process as effortless as possible, and make the pie grow without giving you-know-who at you-know-where a you-know-what…
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