August 31, 2007
NBC Acquires Sparrowhawk: Conglomeration Marches On, But Where's the Brand Going? (2 of 2)

So, what's NBC to do, in light of what I wrote about earlier today?

The domestic and international markets are crowded with American programming, which is incredibly diverse. Even though NBC is the oldest American network, it did not enjoy a monopoly on American popular culture on television as the BBC did for many years, making an overall brand building exercise easier.

At the same time, NBC grew much more like the BBC, with interests in network TV and radio with a bigger and more general audience than Turner networks had, at least initially. As such, it is caught in an interesting situation: build out the overall brand, or concentrate on known "sub-brands" as it expands internationally.

If it does not expand globally with channels under the NBC brand, I think the network will have missed a key opportunity to build an identity that rises above the glut of American content in international cable markets, and create a competitive advantage as a known source of quality US commercial programming, just as the BBC has done with British TV and news.

Research has shown that people can only remember about 5-7 brands in a particular category. As consumers - particularly in traditionally limited, wealthy, and culturally similar television markets like Britain and Australia - get more and more choice in programming with cable, satellite, and the Internet, surely promoting the umbrella brand of NBC is more efficient and far-reaching than a stable of brands, many of which are not as well-established as CNN or the Cartoon Network. At the same time, it would not be making use of the equity in the NBC brand and reputation for quality in news and programming that has been built domestically and could be expanded internationally.

Another advantage of this strategy is that it may drive audiences to online content from a specific source, in this case the network site (or New Site), which means more revenue and opportunities to diversify and hedge against economic downturns through regionalized online advertising.

The problem with the distinct multiple channel approach when the individual brands are not particularly strong, is that it forces the audience to remember far more brand names if they want to find online content. I think an argument can be made that this is confusing and irrelevant enough to consumers that they use non-network or producer sites like YouTube and BitTorrent to find the content they want quickly and easily. If they know what channels are NBC, they may go to the NBC site more readily.

The worst case scenario may be that brand fragmentation in the cable and broadcast space causes ever more fallout online, despite the efforts NBC is making with New Site. Stay tuned.