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Coexistence Means Less Fear of Digital Media

Traditional media can take some comfort from one early finding in the ongoing transition from analog to digital, according to Kagan Research. Placing episodes of TV shows on network websites and third party platforms such as iTunes does not undermine or steal audience from the network telecasts of the same programming.

"There had been concern about cannibalization, of course," notes NBC Universal chief digital officer George Kliavkoff. "But research from all the TV networks in the last couple of months shows the effect is just opposite. Exposure in digital media actually drives ratings on broadcast network TV."

Kliavkoff believes that managing traditional media's transition to digital media means placing bets broadly, as it's still early days and consumer consumption patterns aren't yet established. "We don't have an either-or strategy," he says.

NBC Universal's digital media initiatives have thus far ranged from creating company-owned websites to placing content on third-party platforms, such as mobile TV platform MediaFLO. Most of these new efforts yield new ad inventory in digital media that NBC sells in conjunction with traditional broadcast TV commercials.

For example, NBC gets to sell ads within the MediaFLO streaming TV channels, in addition to getting a license fee for content. Video content from its NBBC syndication venture contains pre-roll ads. TV show episodes on the NBC website include a pre-roll and related web banner ads presented around the streamed episode.

The transition to interactive digital media is not just a matter of simple re-purposing. "We know that consumers are viewing and interacting with content in new ways and on multiple platforms," he says. "We are focused on having our content, both existing and new, available on the platforms they want and giving them the experience they are seeking."

Company executives told Wall Street in December that NBC Universal's digital media businesses would generate $300-400 million in 2006 revenue, and grow to $1 billion by 2009.

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