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@ EconSM: MTVN's Social Media Challenge: Reaching $1 Billion In Digital Revenues

This story was written by David Kaplan.

Alluding to Viacom's (NYSE: VIA) decision to pass on buying MySpace, Staci D. Kramer, co-editor/EVP for paidContent parent ContentNext Media, asked a panel of MTV Network executives about missed opportunities in the social media space during one of the morning sessions at our company's EconSM conference. Missing out on the number one social network hasn't been too painful for MTVN, the panelists said. In some smaller ways, Viacom-owned MTVN was ahead of the curve, buying kids web company Neopets in 2005 for $160 million. At the time, though, the company was widely viewed as having under-invested in digital.

But the challenge the company faces is balancing the need for its various digital properties to not only be successful in their own right, but to recognize the need to move audiences back to the TV screen, whether it's MTV or Nickelodeon or Comedy Central. But by the end of session, MTVN exec made it clear that they were focusing aggressively on doubling its digital revenues to $1 billion and that it wasn't just an adjunct to its TV properties.

-- Making up for missed opportunities: Erik Flannigan, EVP-Digital Media, MTVN Entertainment Group: Video was a big opportunity that we missed. Think of Colbert and South Part across all the viral video space. It seems to fundamental now. We may not have a massive multiplayer game built around South Park, but the fact that we have it available now for embedding is a big step. Another area that MTVN has made up for lost time is in the gaming arena. Steve Youngwood, EVP-Digital Media, MTVN Kids and Family Group: AddictingGames is an acquisition that really has worked out. It is not completely open like YouTube. And it is very viral - you can embed games on your MySpace page for example.

-- Making content social: Courtney Holt, EVP-Digital Media, MTVN Music and Logo Group: MTV needed to be focused communities around core properties. We wanted to wrap content and the experiences around social media. We have an audience looking for music. They want to have a certain engagement with artists. Our social media also has to track back to TV. We can't do that for every audience, but for the core demos, they can get that access from us. On the advertiser front, Nada Stirratt, EVP-Digital Advertising, MTVN: We look at social media in two bucket. If somebody wants to buy The Hills, marketers can buy across all platforms from online to mobile to TV. When we look at gaming and social media, those areas have traditionally be a little separate, but there won't be a difference there by next year. As an example, if you go to AddictingGames, advertisers love the engagement that a community site like that provides.

-- Tracking back: Holt: We've 22 million of our videos streamed outside sites since the beginning of the year. Tens of millions are happening each month on our site. But there wasn't a lot of context or linking back to our sites. To be fair, the pirate South Park sites were offering everything, while we were offering one clip a week. We've improved that situation, however, and are offering more content on the Comedy Central site. We made 10 years of Jon Stewart Daily Show clips. But that led to the question: how to do get someone to look at something from seven years ago? As an example, we've had John McCain on nine times. You can see what he's said over the years. Recommendation per se is not an area Comedy Central would focus on, except in some cases, where the channel has aggregated jokes on a partiular topic from its standup series. Stirratt: It's hard to make money from videos off our sites, but we can when it tracks back to the site. Holt: We have consumer-based syndication and we have business-based syndication. We have to bridge those different demands and monetization schemes. But right now, we're focusing on creating content.

-- What hasn't worked: Kramer prodded the panelists to identify what hasn't worked. Holt zeroed in on the inability to deliver huge scale by this point. Stirratt: If you want to do something user-generated for an advertiser, there is so much crap that comes in. We've tried that a couple of times. It's going to be awhile until we get the level of quality rises so that it makes it worthwhile to put in on TV.

-- Copyright issues: Kramer asked how Viacom's $1 billion copyright infringement suit against YouTube has impacted MTVN's digital strategy. Flannigan: You can find us on YouTube. You can find us taking down our content on YouTube. It's not wrong to examine our position as content rights holders. We've met the demand on video clips. Holt: Just by focusing on making our content more findable is a way we can address the [Viacom/YouTube lawsuit]. Stirratt adds: We've attempted to carefully balance the need to make

-- Building digital revs: Kramer: The promise of reaching $500 million digital revenues made. Stirratt: We've taken a multi-tiered approach to [get to $1 billion]. We're doing a lot of work on the research side and we've done a ton to make sure we have the scale to go to market. So how does she feel about hitting that target. Pausing a beat and offering a knowing laugh, Stirratt said, "No pressure."

By David Kaplan

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