Snap Inc.'s, the parent company of Snapchat, recent IPO has attracted a $500 million investment from NBCUniversal, despite analysts' concerns over the service's stalling user growth. Regardless, NBCUniversal is eyeing its investment to help increase its digital growth in terms of its distribution of its online content rather than turn a profit. NBCUniversal doesn't seem to share the same concerns as analysts in Snap's ability to draw in an older demographic of users, as its investment seems geared toward reaching millennials, who may not be tuning into NBC on a nightly basis to catch whatever's on TV. NBCUniversal is also the only media company to take a stake in Snap Inc.
In the Stories view on Snapchat, there are always those Featured stories from various media outlets, that for the most part I personally tend to ignore (except for the clips from the Bachelor reunion they had on their story last night). Are the featured stories even something most users even bother to tap through them though? I'm perceiving the strategy behind their investment to be that if someone isn't catching one of their shows in full on actual television, going to youtube or a some streaming service to watch clips, they can just tap through a snap story with only seconds of highlights, and even in those few seconds they still might be reaching a consumer they might not have been reaching already, which seems to be worth more to NBC than actually seeing a return on their investment in the actual company.
http://www.reuters.com/article/us-snap-inc-ipo-nbcuniversal-idUSKBN16A1K6
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ReplyDeleteI'm an NBC employee and there was a lot of talk about this around the company when it happened. While all of my coworkers were talking about whether to actually buy stock ourselves and having heard different reports that SnapChat might not be such a sound company, it was a little surprising at first to hear that NBCU seemed to do a canon ball dive into the Snap, Inc. pool with a bunch of cash. Steve Burke, the CEO, sent out a company memo the day the news of the investment was announced. Burke shared with employees that NBC has a lot of faith in Evan Spiegel & SnapChat, feels they will continue to grow, admires the dedicated audience they've built, and felt positive about their collaboration with them having produced "Discover" channel content around the Rio Olympic Games that got over 2 Billion views. They're also looking to do something similar for the 2018 winter games. This is not a far toss from the $600M they plaved into BuzzFeed/Vox last year. But I think you're right: I'm not sure if their expecting a big direct return on their investment right away, but overall, the company recognizes that digital content is the way of the future, it's important to continue to have a presence where young consumers get their content in order for NBCU to have have longevity and they plan to be a part of the digital space moving forward by partnering, acquiring, or delivering their own content to the big players in the digital media that have already shown to have a lot of success at the beginning of this new age. In this WSJ article below, Steve says "it's important to keep running your company as best as you can, while starting to plant seeds that will grow into trees 10-20 years from now".
ReplyDeletehttps://www.wsj.com/articles/nbcuniversal-invested-500-million-in-snaps-ipo-1488553222/?mod=mktw