Monday, March 06, 2006

NBC chases women at iVillage

You can spin it all you want, but the announcement in which NBC is acquiring is a much better example of PR spin than anything else. Pending shareholder and regulatory approval, the deal is supposedly worth a net cost of approximately $600 million. Okay, so maybe if you're used to overpaying for junk, $600 million is a decent price to pay.

But remember, this isn't a news item. This is corporate hype, lifted from BusinessWire, a press release service that feeds the hungry mouths of media. And this is likely the story they'll report. I doubt that anyone will dig deeper on this story. They should and here's why:

According to their spin sheet, "With this acquisition, NBC Universal will engage millions of loyal iVillage users, a community which mirrors a key demographic of the NBC Universal audience - women." Um, that's totally wrong. I guess nobody has caught on to the fact that the absence of a penis and/or the possession of a vagina is not the stuff of which common bonds are made. I guess nobody at NBC recalls the dot bomb days, when iVillage swallowed up what was left of, who had made the exact same mistake:

Dedicating an enterprise to a large database of bodies is not the same thing as building a true online community of real, motivated users. Not by a long shot. Which is why you'll never see meaningful, community or brand-driven revenue numbers from outfits like iVillage. What you will see are a lot of back-end contracts, with million dollar fees for managing the onlnine ends for women's brands (think Redbook and Cosmopolitan). Think I'm kidding? Ever been to this link?

If the media ever gets there, this is one paragraph of dozens that they'll find:

"Services Fee.
The Services Fee will be $4,000,000 during the first Contract Year, increasing by 3.75% to $ 4,150,000 during the Second Contract Year and increasing by 3.61 % to $4,300,000 during the Third Contract Year. The Services Fees will be payable in quarterly installments of one-fourth of the applicable amount within thirty (30) days of Hearst’s receipt of IV’s invoice. The Services Fee excludes any fees that may be payable to third parties as a result of Hearst’s request for advertising on the Merchandise Sites involving Rich Media, which fees will be paid by Hearst to IV for payment to such third parties."

That's right. Brands pay iVillage fees to manage the back ends of offline brands. Is it a good business? Sure. Is it anything like a community? Nah. What you have here is the same old "let's blast our message to a bunch of eyeballs and sell it to whoever is stupid enough to fall for it" mentality. You've got iVillage selling and NBC buying.

And NBC is eating it up with a knife and fork:

"Every part of NBC Universal, from television and film to home entertainment will support and drive iVillage forward. From this platform, NBC Universal will chart the next generation of digital content development and enhance user experience."

Uh, I don't think so. The only thing NBC is going to chart is the rapid decline of their online operations. iVillage doesn't now, never has and never will create true, brand/revenue-generating content for women. Like AOL, they keep thumping their chests about how many women they think are coming to the site, never mentioning how many are scurrying out the back door, never to be seen again.

But again, this isn't news. It's a press release. More hopeful hype from NBC's or iVillage's PR department. So is the speculation that iVillage will become their digital TV channel. It may, but it won't be drawing real female viewership, or worse yet, generating anything close to brand loyalty.

Head genius Beth Comstock issued the standard press release fantasy: ""iVillage immediately gives us scale and a profitable, established platform to expand our digital efforts, especially in the rapidly growing areas of health and women's interests," said Beth Comstock, President, NBC Universal Digital Media and Market Development. "This is all about creating important new intersections between community, content and commerce. We envision connecting more deeply online, on mobile and on demand with key consumers throughout their various life stages -- from their unique interests to their finances to their health and well-being. We are also looking to create a more customized consumer healthcare experience, working in association with GE Healthcare."

Nicely phrased, Beth. Unfortunately, you've just been handed a big bag of nothing, because NBC wasn't looking in the right places to see what iVillage won't be delivering. In fact, at $600 million, NBC would have been far better off creating its program from scratch, even if that meant competing with iVillage, because iVillage is no competitive threat.

But like I said, this isn't news. This is PR, where fantasy and facts are often confused and where media and people could care less. If NBC goes through with this deal, they deserve what they get. And quite honestly, the folks at iVillage deserve that fat check. After all, it's not often you can pull the wool over the eyes of a national media powerhouse.


Blogger Helmet said...

It seems like with the tv contracts nowadays, $600 million isn't that much anymore. Great article though Rob, I really like your way of writing and I appreciate the time and effort you put into this.

1:50 PM  

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