Digital Startups Are Teaching the Big Guys Some Lessons

Scott Cohen spent his career working for media conglomerates, including a stint as executive editor for the digital arm of the New York Daily News. But after hearing about Vocativ’s ability to use analytical methods to hunt for little-seen stories lurking in the Internet’s long tail, Cohen was willing to chance a new career at an Internet-native startup. “What appealed to me was not only the ability to build something from scratch with really smart people but to be obviously on the cutting edge of digital,” explains Vocativ’s CEO. He’s not the only old-media character lured by the siren call of the digital world. Many traditional TV outlets are striking partnerships with young digital upstarts. In late February, Vocativ announced a multimillion-dollar, multiyear partnership with MSNBC. Select videos produced by the Web organization appear on Ronan Farrow Daily, with an option to expand its content across NBCU News Group’s properties. “They are buying access to the ideas flowing out of this place,” adds Vocativ chief business officer Steve Alperin. NBCU also inked deals with digital video company NowThis News (NTN) and tech media repository Re/code. And CBS This Morning and BuzzFeed have teamed up. What’s going on? Established media companies may claim they’ve made inroads with younger generations, but they can’t deny the majority of their audiences skew older. Staying relevant means learning how to speak to millennials in a digital language. A study by Verizon shows that one-third of people born between 1981 and 2000 watch the majority of their video online. Overall, eMarketer discovered that adults 18 and up will spend 47 percent of their time on media this year perusing it on digital screens. Advertisers are reacting: For the first time, total digital ad revenue topped television revenue in 2013. “The line has blurred between what’s the first screen and what’s the second screen,” says Altimeter analyst Rebecca Lieb. All Shapes and Sizes Some traditional news groups are finding the quickest way to satiate demand for online video and content is to work with digital-first outlets. Media can’t survive only on the time-honored style of rigid journalism when metrics now include viral sharability and snappy items, argues Bill Grueskin, a professor at Columbia University’s Graduate School of Journalism. “Demographically significant audiences are migrating to this other content,” he notes. For example, Weather.com produces about 15 videos a day with its digital team internally and clips another 15 videos from the TV network. But it also gets two to four videos a day from digital video company Newsy. “Our audience is more than 100 million people,” says Neil Katz, vp of digital content for The Weather Channel. “As a site, we need even more production than we are doing. Newsy was a great, fast, reliable solution to that.” CNN, meanwhile, believes it makes more sense to develop its own digital content. Even though that could take years, the veteran news operation is willing to give it a try through 15-second daily Twitter videos and original Web series. “We don’t need to outsource what’s in our wheelhouse,” says Andrew Morse, CNN svp, who oversees digital editorial. “We need to build up the skills and resources, not take on others. We need to build up what should be our core competencies.” Still, buying content can be cheaper than hiring a staff and purchasing equipment. “Why does Polo or Ralph Lauren manufacture clothes in Vietnam or Bangladesh rather than Akron, Ohio?” asks Grueskin, the former managing editor of WSJ.com. “They can get other companies to make content at a lower price.” NPR saw an opportunity to expand its digital footprint when it asked daily digital magazine Ozy to produce a segment. Despite no financial remuneration, Ozy CEO Carlos Watson agreed. “Established media brands obviously have a big audience and a kind of credibility,” he says. “It is as important for news outlets to hold onto their viewers and be with them wherever they are and whatever channels they are in as it is for digital startups to ride on the coattails of bigger, established players to get visibility traction in markets,” adds Lieb. Sometimes the relationship between old and new is just about positioning. BuzzFeed excels in Web content but doesn’t have a television presence or the chops to produce broadcast quality videos to grow its news brand, admits its president Jon Steinberg. So, the site allowed CBS This Morning—whose viewers are an average age of 59.8—to co-sponsor BuzzFeed Brews in January. (Given that one of BuzzFeed’s largest advertising categories is television tune-in ads, there’s some sense to joining forces with a broadcast net.) “I want to expose the brand to the 100 million monthly 18-34-year-olds that go to BuzzFeed that wouldn’t know there was morning television,” says CBS This Morning executive producer Chris Licht. What’s the Payoff? So what are these partnerships getting from each other? Metrics are not easy to amass. Vocativ’s YouTube views have skyrocketed 888 percent since the partnership announcement and visits to its site have gone up 31 percent—but it can’t all be attributed to MSNBC. The three co-sponsored BuzzFeed Brews measured about 1.5 million views on YouTube and about 1 million views on its homepage. It also got press coverage from 150 outlets and pickup across 12 shows, bringing those impressions to about 17.5 million. Perhaps digital startups’ most salient gift is their willingness to try groundbreaking ideas. Many old-school organizations shy away from dabbling with their formulas, lest they alienate their core following. It’s easier to sever the cord with a collaborator than try to repair a deeper rift within one’s brand. “It’s a great way for traditional media companies to experiment before necessarily rolling that out with their brands,” says Elisabeth Sami, svp, strategy and business development, NBCU News Group. In NTN’s sunlight-drenched loft office in New York’s SoHo, producer Sarah Frank discusses topics with NBCNews.com supervising producer Win Rosenfeld. They weigh whether including negative facts in a positive update on the anniversary of the Boston Marathon bombings will hurt the video. The piece has been hashtagged #BostonStronger. “The news came out yesterday that Russia had details about the suspects. It seems really hard to ignore that,” Frank points out. Rosenfeld agrees. Rosenfeld is one of a handful of NBCU employees who have been embedded at NTN’s office since NBCU invested a minority stake (said to be less than 10 percent) in the Lerer Ventures brand in January. Their mission was to learn why the company was so successful on social media and digital video—and to bring those techniques back to the mothership. Working with NTN is also helping NBCU News figure out how to do online native formats, among other things. There’s precedent there: Sami says the company’s agreement with user-generated content service Stringwire gave it insight on how to identify eyewitnesses. “It’s very hard in a context with a traditional structure to be innovative. The main company can do their experimental product in a separate unit, but it’s much more likely to be those guys who create something in their garage,” says Grueskin. Professional Distance The risk for startups is that if it works too closely with the media veteran, it could get swallowed up. Before News Corp acquired social news outlet Storyful in late 2013, the two companies had been partners. Lieb warns that acquisition can be a death knell for many online startups—she points to CNN buying Zite and then flipping it to Flipboard less than three years later. “It got eaten up, digested and let go,” she notes. Seeking to avoid a similar fate, Vocativ CEO Cohen says he has no plans to sell the proprietary information that helps it identify hidden stories if it wants to stay relevant. NTN president Sean Mills says he doesn’t have that fear. “If we’re doing what we’re doing really well, and we continue to evolve, I think you just have to have the confidence that you are going to keep innovating,” Mills believes. Since their agreement, NTN and NBCU News Group have co-produced 73 videos, nine of which eventually made it to air—the rest have lived on NBCU News Group’s digital and social platforms. NTN is “riding social networks and Twitter [to] see what’s percolating at that moment,” says Bill Smee, NBC News director of original video production. “We are looking to them to turn pieces that feed off that in a way we don’t do directly here.” For example, during one morning news meeting, NTN staff members and two NBCU News Group employees toss ideas around the room, ready to scribble down notes with color dry-erase markers on a gleaming, white glass tabletop. There’s an amazing clip of a Brazilian woman complaining about the high crime rate—who is then mugged on camera. A comparison of Rwanda and the Central African Republic to show “spoiler alert: we did not learn from history.” Someone pitches a video featuring a turtle with a prosthetic fin “because of a jerk with a jet ski.” “Today may want that,” Rosenfeld says. In the end, NTN published a two-minute video—One Year Later: #BostonStronger—on the anniversary of the bombings, which was tweeted out by NBC News. A 15-second version aired on MSNBC. Neither clip included the Russian intel. Past choices aside, content may get more serious due to a change in NTN’s leadership and a new agreement with MSNBC. The news net has begun to broadcast 15 Seconds to Truth, a daily video from NTN that explores one youth-focused topic that incorporates hard news. “In many ways, cat videos and GIFs have been overinflated for this millennial set,” says NBCU News Group vp, innovation and strategic integration Ryan Osborn, who has worked with NTN. “I think some of the videos that have resonated the most have been hard news videos from around the world.”

Performance Marketing

Digital Startups Are Teaching the Big Guys Some Lessons

Traditional news outlets are discovering new forms of storytelling

Michelle Castillo

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Michelle Castillo