NBBC, We Hardly Knew Ye
- by Gavin O'Malley @mp_gavin, July 5, 2007
Unfortunately, NBBC's partners -- including NBC affiliates with an equity stake in the now dashed venture, its content providers, content carrier sites and employees -- all have to strike new contracts with NewSite to participate in the new endeavor.
George Kliavkoff, NBCU's chief digital officer, made no apologies for the sudden reorganization. "One of the interesting things about the digital space is how quickly it evolves and changes," said Kliavkoff, who is also serving as NewSite's CEO until former Amazon exec Jason Kilar takes the reins on July 9.
"NBBC was chugging along quite successfully," he added. "But we saw that NewSite could use NBBC's resources, so last Friday afternoon we agreed to contribute it to the NewSite effort."
The shift rested on NBCU's ability to buy back equity stakes from its affiliates, which it has managed to do. NBCU and News Corp. are the only two companies with equity stakes in NewSite.
"They got a tremendous return," Kliavkoff said of the NBC affiliates. "I can't say how much, but it's more than I've ever received from any investment."
News of the shift became public this week when an internal email to NBBC's partners was leaked to the press, including Multichannel.com and LostRemote.com.
"As part of our contribution," the memo read, "NBBC must sever all on-going business relationships in preparation for the merger[with News Co.]. Therefore, this note serves as your 30-day notice of service termination with NBBC. NewSite is an independent operating entity and may reach out to you to explore potential business partnerships."
Initial criticism that NBBC is leaving its partners in limbo is unfounded, Kliavkoff said. "What we're offering now is better economics and a better distribution model for everyone," he insisted.
NBBC had about 45 full-time employees; roughly 150 partners -- including Hearst, A&E Television Networks, The Horror Channel, Vibe Media Group, CNET Networks and Forbes.com. It also has a roster of top-tier advertisers, including JPMorgan Chase, Procter & Gamble, Sheraton Hotels & Resorts and Toyota Motor Sales.
Kliavkoff would not discuss specifics of NewSite's relationship with those partners and employees, but gave the distinct impression that opportunities abound for all parties.
Like NewSite, NBBC was never thought of as just a video aggregator, but as a syndication service designed to distribute video programming -- content from NBC's networks and local stations as well as from other companies -- to Web sites, accompanied by advertising.
NBBC did suffer some early setbacks. In January, NBC lost NBBC's architect Michael Steib to Google, where he now runs an ad sales unit under Tim Armstrong, the search giant's sales head.
Steib's departure followed Randy Falco's move in mid-November to replace Jonathan Miller as head of AOL. Also in November, David Zaslav, president of NBC Universal Cable and Domestic TV and New Media Distribution, announced his plans to join Discovery Communications as its president and CEO.
