Inside NBC Universal's Digital-Startup Hobby

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Credit: NBC Universal

NBC Universal's pursuit of niche startups to diversify its offerings landed a spot in a "Today" show segment for Craftsy, a digital platform for craft enthusiasts that the company bought almost six months ago.

On Monday, the morning show brought on chef Scott Conant to promote a new "master class" on Craftsy, "Pasta Like a Pro: Everyday to Gourmet."

NBC Universal has made similar synergy plays before. It has been featuring Priv, a beauty-services-on-demand app, in a range of shows on Bravo and E!, including Bravo's "Real Housewives" franchise.

As TV viewership fragments and people increasingly watch content on platforms where it's hard for networks to make money, companies like NBCU need to find revenue streams beyond traditional ad sales and cable and satellite fees. NBCU's answer is partly about creating businesses that don't necessarily rely on advertising and the metrics that have traditionally defined success. So it has been seeking content companies that include an element of commerce, built-in community and a base of talent or influencers.

NBCU took a majority stake in Craftsy in May, with Recode reporting it spent $230 million on the acquisition. It acquired Priv the same month.

"The object of the exercise is to really build some digital scale," says Dave Howe, president of strategy and commercial growth at NBC Universal Cable Entertainment. "We are primarily a linear business with a traditional model of ad sales and affiliate sales. What we think we can do in the digital space is expand into new revenue streams like e-commerce."

NBCU is evaluating additional investments in companies that target a range of consumers and interests like fashion, travel, video games and cars, Howe says, citing the integration of Modsy, an interior design app, into the Bravo series "Cyrus vs. Cyrus" as an example. NBCU has a partnership, but not an equity stake, in the platform, and Howe says he would like to do more with the company moving forward.

"We think there are companies we can work with and help to grow while also bringing new audiences and revenue streams for the future, which is the objective of the exercise," he says.

The company has also taken stakes in BuzzFeed, Vox and Snapchat. While these deals are outside of those acquisitions Howe and his team have made inside the cable entertainment group, they speak to the larger efforts being made by the peacock to look outside the linear model.

With Craftsy, which boasts 13 million users and 2 million active users per week, Howe says the goal is to grow awareness, build out additional content verticals and expand the pool of personalities and talent on the platforms.

Next year, Craftsy will be incorporated into NBC's new reality competition show "Making It." The show, From Amy Poehler and Nick Offerman, will pit contestants against each other for craft challenges. Craftsy will be featured in each episode with 20-second vignettes. It will also create content that takes viewers deeper into the art forms explored in each episode.

Craftsy personality and cake artist Joshua John Russell is also appearing in the first season of "Top Chef Jr." airing on Universal Kids. The brand will have a presence during the upcoming season of "Top Chef" on Bravo, Howe says.

Since acquiring Priv, which lets consumers book services such as blowouts and facials, Howe says the platform's stylists have been integrated into shows on both Bravo and E!. NBCU is also looking to eventually build an e-commerce business within Priv.

For advertisers, Howe says Craftsy can build content that helps consumers better use sponsors' products. It has created sponsored videos on using King Arthur Flour to bake bread and make pizza, he says, and similar content for Vitamix and Nikon.

"If you look at millennials, they are watching just as much TV as ever, if not more, but are watching across multiple platforms," Howe says. "Buying platforms like Craftsy allows us to be on all of those platforms."

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