NBC is out in front today with two stories. The first is a head to head about web video with Sab Kanaujia, vice president for digital product strategy at NBC Universal and Steven Starr, co-founder and chairman of Revver. The second is a somewhat strange interview with NBC Universal Chief Digital Officer George Kliavkoff.
From the WSJ:
Sab Kanaujia begins: Can independent creators make a living with Web video? I don’t think they can in the short term. Current business models online are not attractive enough to make a living or leave your other day job.
Steven Starr responds: Well, it all depends how you define independent creators. Old school independent creators, used to Hollywood economics, should stay home. But successful independent online creators are seeing CPM and [cost-per-click] returns that can exceed $10,000 per month.
“Will New Site be distributing any content through widgets?
New Site is working through that. It’s certainly their right to do that, and there’s no reason why they wouldn’t want to do that.
NBC Universal and GE Commercial Finance launched a $250 million Peacock Equity Fund in April to invest in media and technology companies that are developing products of relevance to NBC. How does the fund fit with your overall strategy?
This is a way for us to seed digital businesses and to have an equity stake. Most of the time, we take an equity stake, we have an operating relationship as well. So it’s a great way for us to play the field. We’ve announced three investments so far; we’ve made five. We think we’re well on pace to distribute that $250 million over the two- to three-year life span that we expect it to last.
In January, NBC signed up with Qualcomm’s MediaFlo platform to provide two channels of programming. Mobile video doesn’t seem to drawing much in the way of traffic yet. What has to happen for that to change?
I generally think that underlying that is a larger issue with the way video content is distributed on cellphones in the United States. Today, it’s a broken business model. If you look across most of the platforms on which premium content owners distribute their content, on almost every platform, the total gross dollars for the consumption of that content is shared in a way where the content owners, on the aggregate, get more than 50% of the gross dollars.
In this country, if you look at the gross revenue of content distribution on mobile phones, 9% of the gross revenue goes to content owners, 70% stays with the carriers and 21% goes to content aggregators and other middlemen. We think over time that that’ll get fixed. I believe the carriers are like us, long-term greedy, not short-term greedy. There are two ways to get that fixed: either we do that in partnership with the carriers or we figure out ways to go around the carriers. We’d much prefer to do it in partnership with the carriers.”