More details emerged this week on why Comcast decided to shutter NBCU's Digital Studio. You'll remember that Digital Studio was producing original web shows supported by advertising and sponsorship. It turns out the decision to ditch the effort was not financial, especially given that the division turned a profit in 2010.
Then what was it about?
NBC's prime time slate continues to sit in fourth place among the Big Four broadcast networks. Senior executives at NBCU thus decided its focus should be put behind remedying that situation rather than exploring new opportunities on the web. Perhaps in the near term this may seem to be a good decision, but in the longer term I believe this will be viewed as myopic.
Back in April 2011, I wrote a piece about how content and services were becoming decoupled from the physical network used to deliver them. I finished that piece with the following line:
"An OTT service with interesting content can, with the proper funding and a good idea, instantly compete on national basis."
Ceding the delivery of original web content to competitors could, in the end, hasten the demise of NBC rather than bolster it. To be sure, online audiences are far smaller than today's broadcast audiences but the edgy content produced by Digital Studio was targeted at the all-important younger demographic. As TDG's research shows, these folks believe that Internet connectivity is more important than cable TV, and they are quite content hunting down content online. Digital Studio's content was part of this online content mix, able to reach these high-value viewers where ever they were and on whatever device they used.
There is little doubt that other content will emerge to fill the void left by the closure of Digital Studio. The opportunity for NBCU to grow with this new audience is lost, at least for now. Retreating to bolster old-world media could, in the end, cost NBCU a foothold in the new.
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