Yesterday, NBC announced the planned launch of Didja, an “All Ads, All the time” Internet video site. In the press announcement introducing the new site, it was noted Didja would not launch until some time in early 2008. That schedule was set to insure the much larger YouTube targeting Internet video joint venture between News Corporation and NBC would launch first.
Today, that joint venture (which was announced in March and is still referred to as New Co) received an added shot of working capital. Providence Equity Partners, a media-centric investment company based in Rhode Island, confirmed they’d take a ten percent stake in the joint venture for $100m.
That investment sets the pre-money valuation for the as yet unlaunched effort at a staggering $1b. It’s an enormous number for a company that does not yet have its product on the market. The money will presumably be used to speed up the development of the site and fund the transfer of the video content from Fox and NBC to the new channel.
Skeptics question whether, at this valuation, or another, the site will be able to succeed. While it’s billed as a home for NBC and Fox copyrighted content, and not per say as a YouTube clone, it does intend to host user-generated content and offer similar features to both YouTube and other similar video sites. There is a question as to whether the site will be able to stand out from the already crowded pool of similar offerings. There are also concerns that two parent companies, with their own strong willed leaders and independent competing Internet properties (like MySpace or MySpace TV for News Corp), may not be able to play well in the sandbox together in the longer term. Reportedly according to some, behind closed doors and on its Silicon Valley campus, Google-ites refer to the venture as "Clown Co."
Providence, has a history of investing is large scale media ventures. Rich valuation or not, this deal is not outside their scope. Jonathon Nelson, a member of the firm, sits on the board of directors at MGM and Warner Music Group. The investment firm has raised $21b through seven funds since its formation in 1989. The fund’s portfolio includes stakes in MGM, NexTag, Univision and the Yankees Entertainment and Sports Network.