MTV Networks embraces Web chaos to regain viewers

NEW YORK Tue Mar 6, 2007 4:34pm EST

On-lookers gather across the street during the MTV Video Music Awards in New York, August 31, 2006. MTV Networks, owner of the MTV and Comedy Central channels, is pushing a risky new Web strategy to win back young viewers from the likes of YouTube and MySpace. REUTERS/Keith Bedford

On-lookers gather across the street during the MTV Video Music Awards in New York, August 31, 2006. MTV Networks, owner of the MTV and Comedy Central channels, is pushing a risky new Web strategy to win back young viewers from the likes of YouTube and MySpace.

Credit: Reuters/Keith Bedford

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NEW YORK (Reuters) - MTV Networks, owner of the MTV and Comedy Central channels, is pushing a risky new Web strategy to win back young viewers from the likes of YouTube and MySpace.

The network, which already has 150 Web sites in 162 countries, plans to build literally thousands more, hoping to draw viewers by letting them watch, contribute and even re-edit its television shows.

"People tend to find content on the Internet through thousands of front doors as opposed to one," said Mika Salmi, the new digital president of MTV Networks, a unit of Viacom Inc..

"In some ways we're in a better position than most media companies are -- we're where people want to be."

The music channel MTV was once synonymous with youth culture, but popular social networks like News Corp.'s MySpace.com and Google Inc.'s online video-sharing site YouTube have siphoned away some of its viewers.

MTV Networks' new strategy is part of an effort by Viacom to reach a wider audience that is spending as much time on the Internet and on video games as watching television, and no longer cares when or where programming is shown.

It aims to build Web sites related to every personality and aspect of its shows, hoping to catch viewers wherever they happen to be on the Internet and on mobile phones, Salmi said in an interview.

It has created three virtual worlds -- Laguna Beach for teenagers, Nicktropolis for children and Virtual Hills for young adults -- and says more Web sites can help it go deeper to promote individual shows and personalities.

The move is a risky one for Viacom as it could breed confusion and dilute corporate branding, especially for a company whose Web strategy has been difficult to discern.

Compare it to News Corp's focus on MySpace -- a property Viacom Chairman Sumner Redstone had once coveted -- which is an anchor for News Corp., Rupert Murdoch's media empire.

It is one of a number of experiments by the media industry to sell, rent and stream for free programs over the Internet.

But Viacom appears to more aggressive than its peers in freeing up its content, lit by an urgency to protect and grow its core youth market.

Viewers will have a degree of control uncommon for media corporations, Salmi said.

An example of this approach is Lucasfilm Ltd.'s lax policies on letting fans post re-edited clips of Star Wars, which has helped sustain the franchise for years.

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Some three months ago, Salmi began laying the groundwork in a strategy plan called "Atlas."

MTVN's sites currently operate largely within their own "silos," so they first had to adopt the same technology tools and then find better ways to cross-promote the myriad brands tied to its shows, Salmi said.

"The goal is hopefully to tie it all together over the next year, and to be far more open," said Salmi, who joined MTV Networks last summer after Viacom purchased Atom Entertainment, known for online short films and games. "Consumers love these shows. Let's get them involved."

In the coming months, Salmi said the company plans to open up more of its archives, allowing Internet users to take videos and post them on their own sites and also re-edit some clips.

ComedyCentral.com already allows viewers to post, or embed, some of its videos on their own sites.

"Consumers want control," Pali Capital analyst Richard Greenfield said. "Fighting that trend is not a winning strategy...They're moving in the right direction now."

In February, Viacom appeared to be making a move in the opposite direction when it ordered YouTube to pull down more than 100,000 clips of its popular shows that were uploaded by users without permission.

The controversial move to protect online programming found supporters among other media companies including NBC and News Corp., though CBS Corp. continues to sing the praises of the marketing impact of YouTube.

Viacom says the move has helped boost traffic to its own sites -- traffic in January to MTV.com jumped 55 percent and ComedyCentral.com nearly doubled from a year ago.

The company has left the door open to a deal with YouTube, but is offering its shows to others such as Joost, an online video service that uses the very technology once feared by media.

Meanwhile, MTV Networks is quietly getting its house into shape for what analysts have called a "transformative" year, when Viacom retools the entire organization to capture more online advertising dollars.

Viacom has said it expected to roughly double revenue from digital businesses to $500 million this year.

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