With two major investments, NBCUniversal became a potential digital powerhouse when it recently poured in $400 million in BuzzFeed and Vox.
The deals, a play for millennials by NBCU and a push for wider distribution and credibility for BuzzFeed and Vox, is a huge development in a media landscape increasingly marked by legacy companies bending forward and backward to attract the younger, digitally-savvy audiences with which BuzzFeed and Vox have built their brands.
The potential financial and credibility gains for NBCU are clear, but some wonder if the playful, independent startup vibe that built the digital giants will fall prey to the realities of corporate media.
“It’s quite a brilliant combination,” Jesse Redniss, co-founder of entertainment and technology advisory company Brave Ventures, told TheWrap. “NBCU gives BuzzFeed and Vox the credibility they crave and BuzzFeed and Vox give NBCU the younger audience and diversified and portable content it needs, along with a proven methodology that will allow them to create better content optimized by psychographic insights and then sell great cobranded content against ‘audience parting’ data.”
NBCU’s deal with Vox will feature digital advertising collaboration between the companies as well as video advertising and programming. With BuzzFeed, the legacy media company is set to distribute its content on the viral site while also bringing BuzzFeed to some of its broadcast properties–exposure BuzzFeed hasn’t yet achieved on its own.
And as digital media’s desire for more data develops, the acquisitions place NBCU in the driver’s seat, according to Redniss.
“Look at the breadth of audience data that NBCU would now be working with–they’d get all of Comcast’s set-top-box data and NBCU Digital’s data, as well as BuzzFeed and Vox data and ‘audience parting capabilities.’”
The cash infusion from NBCUniversal comes on the heels of both BuzzFeed and Vox growing new initiatives over the last year. BuzzFeed Motion Pictures was launched to distribute original films while continuing to expand its video unit; Vox created its own separate entertainment unit for digital video and talent partnerships.
But since this isn’t a complete acquisition like Yahoo buying Tumblr, culture, operations and autonomy will look very different in NBCU’s respective relationships with BuzzFeed and Vox.
“The legacy players need to evolve how they retain attention with audiences … and fast,” Redniss said. “This entire ecosystem is moving very quickly but it’s not moving at such a pace where television becomes irrelevant. If anything, long and short form video becomes even more relevant than ever.”
From a business stand point, NBCU stands to see an immediate boost in its bottom line as it leverages BuzzFeed and Vox to advertisers, according to media and marketing consultant Jennifer Kavanagh.
“This puts NBCU in an added position of strength for the round of NewFronts and Upfronts,” she told TheWrap. For NBCU, better, branded creative content that offers wider distribution opportunities across platforms, is the key victory in the deal, Kavanagh suggested.
“It’s clear that brands will need to learn to be storytellers to compete and being able to plug into the work of Buzzfeed studios and reap the benefits that some, like Purina’s ‘Dear Kitten’ series, will be attractive.”
But for both BuzzFeed and Vox, keeping true to their respective DNA is important, as too much tinkering at the behest of a corporate goliath can backfire.
“Preservation of culture is key to making this work,” Kavanagh said. “Cash aside, the relationship must feel additive to existing Buzzfeed/Vox talent. One that extends the reach, exposure and opportunity for the content they’re creating. It must feel like a step forward into a new integrated media landscape and not a retrofit into an old medium for them.”
Steve Burke, CEO of NBCUniversal, has talked a good game about learning from these digital players, but that doesn’t always mean they won’t try to call many of the shots, according to Redniss. He cautioned that although NBCU executives won’t be marching in to change the furniture at BuzzFeed or Vox (pretty trendy by the way), Burke will want his braintrust involved.
“NBCU isn’t in the position to simply take over but I wouldn’t be surprised if they deploy a few strategic people into the BuzzFeed or Vox Cultures to help bridge the two companies in a more meaningful way. These people will be less ‘disruptor’ and more ‘integrator.’”
In the end, both NBCU and BuzzFeed/Vox will have to open their minds to best leverage each other.
“This will be much more difficult for old media than new,” Kavanagh concluded. “I’d challenge the legacy brands to think not just about the benefits of ‘access’ within these deals but also how they can better set themselves up internally to adapt.”