NBC U’s Kliavkoff: NewSite Isn’t a YouTube Killer

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New York -- With the official launch of NBC Universal’s and News Corp.’s joint Internet venture -- tentatively dubbed NewSite -- scheduled for the summer, the interim CEO of the JV, NBC U chief digital officer George Kliavkoff, told an audience of industry professionals here Tuesday that the JV will focus on providing content across all platforms, focusing on high-quality content rather than user-generated fare.

NewSite -- which was announced in March and is expected to get an official moniker any day now -- was initially thought of as a “YouTube Killer,” referring to the popular Internet-video site that offers a mix of user-generated and professionally produced content.

At the PricewaterhouseCoopers Outlook 2011 entertainment and media conference here Tuesday, Kliavkoff stressed that the site was not an answer to YouTube.

“The press has positioned us as a YouTube killer. That is really not the case,” Kliavkoff said. “In no respect will we be competing with YouTube. I think YouTube has cornered the market on amateur user-generated content. I use those terms not in a derogatory sense -- I think there is huge value in that.”

But NewSite will focus on professionally produced premium content and being the best destination for that content.

NBC U already has a head-start: Kliavkoff said the NBC broadcast network’s Web site is the most successful network-television Web site in the country, with 15 million unique visitors per month.

Kliavkoff added that users have downloaded 120 million full episodes and 300 million video streams of NBC programming since last fall.

But with the addition of NewSite’s partner, News Corp., and agreements with Comcast, AOL, MSN, social-networking site MySpace and CNET, the new venture has access to 98% of the unique visitors on the Internet in the country each month.

“We just needed more scale,” Kliavkoff said. “At some point, it becomes a question of whether you can continue to attract the next visitor to NBC.com and to FOX.com or whether there is a better business model that creates the opportunity to get massive scale by making a little bit of a forward investment. That’s what we’ve done.”

Putting on his other hat, as NBC U chief digital officer, Kliavkoff said the media giant is also is focusing on IPTV and mobile technologies. “We look at the mobile phone as another screen and as a huge opportunity,” he added. “It’s the one screen that you always have with you.”

He pointed to the willingness of cell-phone customers to pay as much as $3.95 for a 10-second ring tone when a full song can be purchased for download on Internet music sites like iTunes as an example of the revenue opportunity.

Later, after his presentation, Kliavkoff said that while the mobile business is a huge opportunity for NBC U assets, there have to be some changes made in the way content companies are compensated by carriers for their content.

He added that with other distribution platforms -- Internet, cable and satellite -- more than 50% of the gross revenue generated by their content goes back to programming providers. On the mobile side, he said, just 9% of the gross dollars generated by video finds its way back to the content companies.

“Carriers take 70% and the aggregators take 21%, and that’s a broken business model,” Kliavkoff said. “It would be our preference to rework the business model with the carriers so that it’s an equitable share of the gross revenue. The other opportunity is to go around the carriers, but that is not our preferred method.”

Asked if NBC U would consider distributing mobile content to the Pivot cable wireless consortium formed last year by Comcast, Time Warner Cable, Cox Communications and Advance/Newhouse Communications, Kliavkoff said the company was “looking at it. We don’t know yet.”

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