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Buyers See Some Order in MTVN's Varied Web Plays



Mike Shields

SEPTEMBER 10, 2007 -

Since the exit of Tom Freston last year, MTV Networks’ digital efforts remain a mixed bag of tricks. Many buyers are heaping praise on the company’s recent ad-sales restructuring, which is now anchored around demographic groups instead of individual properties, though some observers question MTVN’s oft-shifting digital focus and its ability to nurture several of its online acquisitions.

Of course, it was the deal the company didn’t make–MySpace–that caused former Viacom CEO Freston’s downfall, opening the door for Mika Salmi, MTVN’s global digital media president. Since Salmi took charge last November, the company has continued to snatch up smaller Web players, such as the teen-girl-targeted Quizilla, while making several strategic announcements about plans in the digital space.

Last month, MTVN said it would commit $500 million to various gaming initiatives. That pledge followed its much-hyped foray into virtual worlds, such as the Virtual VMAs. Of course, those moves came on the heels of MTVN’s major push into online video, starting in 2005 with the launches of stand-alone video platforms like MTV Overdrive and Comedy Central’s Motherload.

Then there is that string of deals over the same time period, which resulted in the company snatching up properties such as iFilm, Neopets, Atom and Xfire. These moves have caused some to wonder just where MTVN is headed digitally, but buyers seem to get it. “From the outside, I can see where it looks a bit haphazard,” said Margaret Clerkin, managing director, MindShare Interaction. “If you look at the deals, you might say, ‘This is a random purchasing pattern.’ As Internet properties go, these were not must-have items. But when you talk to them, you get a more balanced picture.”

When packaging multiple properties around a specific target, “They have pretty substantial reach,” added James Kiernan, vp, digital director, MediaVest.

Still, it seems as though MTV has had only varied success with its acquisitions. For example, the tween-skewing virtual world Neopets has lost roughly 15 percent of its audience over the past year, according to Nielsen//NetRatings. Regardless, “We’re extremely bullish on it,” said Salmi, who hinted that the site’s creators may launch new virtual worlds targeted to boys or different age groups.

Another acquisition—the promising viral video hub iFilm—was relaunched earlier this year to become the online destination for the Spike network. Yet its user base has plunged by 38 percent, per comScore Media Metrix.

Ironically, Spike was one of the few MTV Networks that didn’t launch its own broadband video hub, which may have proven wise, since MTVN has begun quietly phasing out the concept in favor of more integrated video offerings. “The idea that you had to go to this big player is no longer useful,” said Salmi. “We just haven’t issued the RIP yet.”

Meanwhile, the company’s gaming acquisitions are thriving. The younger-skewing AddictingGames.com’s audience has exploded by 84 percent through July, now reaching 9.4 million uniques, while the gamer-aimed instant messaging platform XFire has gone from 2 million to 8 million registered users over the last year, according to MTV—both underscore gaming’s growing importance to the MTVN.

Also rising in importance are virtual worlds, seven of which the company has launched this year, including the recent Virtual VMAs. But Salmi downplayed the idea that a big, cross-branded social networking/virtual world play is on its way, as some have hinted. He did say that MTVN was looking to better connect its existing worlds, allowing users visit multiple ones with the same avatar.

Salmi dismissed the idea that MTVN was having trouble communicating its ever-expanding digital agenda. “I disagree with that,” he said. “We tend to integrate our businesses pretty closely.”


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