VIACOM FINDS KIDS DON'T WANT THEIR MTV ONLINE (WSJ)

By TomTapp

The Wall Street Journal takes a look today at why one of the premiere hip brands on the planet has had so much trouble drawing teens to its Web offerings.

The paper notes that while MTV's cable channel gets 82 million viewers each month, its MTV Overdrive site attracts less than 4 million. That pales in comparison to upstart sites sich as MySpace, which has 55 million unique users a month and even YouTube, which started last year and already draws 16 million.

These numbers are loosening the Viacom-owned company's lock on the youth market and allowing other players - such as Rupert Murdoch's NewsCorp, which recently bought MySpace - to gain footholds.

And the stakes are high, not just online, but everywhere. MTV Networks is a huge profitmaker for the conglom, accounting for "more than 70% of Viacom's $9.6 billion in annual revenue last year and nearly all its $2.4 billion operating profit," according to the Journal. That's a cash cow it can't afford to see threatened.

WSJ:

Judy McGrath, the executive in charge of MTV Networks, says the company has fended off challenges from upstart Web companies before, such as Napster, and she's confident it can prevail again. "There's always been tremendous competition for our brands and advertising dollars but we've beaten the market consistently," says Ms. McGrath. On Thursday, MTV will air its annual Video Music Awards ceremony on TV and online, complete with live peeks backstage on the Web.

By its own account, Viacom was late to the Internet. Like other media companies burned by the dot-com bust, it was wary of making big Internet bets, even as ad revenue online began to take off. Mel Karmazin, the company's former chief operating officer, had a hard-nosed discipline about acquisitions. In January 2005, six months after Mr. Karmazin left, Viacom Chairman Sumner Redstone told investors of his fears that Viacom was "underinvested and under represented" on the Web. At a conference in Phoenix, he declared his intention to pour resources into the Internet, among other fast-growing businesses.

What Viacom thought would be its big advantage -- its position as a major media player -- has proven to be a drawback. For many Web surfers, the attraction of places like YouTube is their edgy, user-generated programming, much of which can be offensive or obscene. MTV, with its mainstream advertisers, can't do that. Similarly, MTV Networks' Nickelodeon became the No. 1 children's destination by offering kids bolder, more-irreverent programming such as "Ren & Stimpy" rather than the what's-good-for-you regimen of some of its rivals; this is what the Web does even better.

Yet the tension is apparent. Earlier this month, a spoof cartoon on Overdrive about rapper Snoop Dogg created a minor media storm amid charges that the network was promoting racial stereotypes. The program, called "Where My Dogs At" showed a cartoon version of Snoop Dogg leading two black women into a pet shop on leashes; one of the women then defecates on the floor.

"Black women on a leash -- satire or racist misogyny?" wrote one contributor on blogher.org, a site dedicated to female bloggers. After the broader media picked up on the story, MTV pulled the segment. An MTV spokeswoman said the episode's removal was part of a normal rotation and was related only to its poor ratings.