Viacom Takes a Narrower Net Approach

Viacom Inc. on Tuesday unveiled a long-anticipated plan for strengthening the presence of MTV and Nickelodeon, its premier entertainment units, on the Internet by creating specialized Web sites aimed at music lovers and children.

The strategy departs from that undertaken by some of Viacom’s leading rivals, including Walt Disney Co. and the NBC unit of General Electric Co. They have both spent heavily to create comprehensive Web “portal” sites designed to give users centralized links to all their disparate businesses as well as further access, through search functions, to the Internet.

By contrast, Viacom is making little or no effort to link from MTV or Nickelodeon to some of its other important units, including Paramount Pictures, the Showtime cable channel or the UPN television network. Nor is Viacom making the Nick.com or MTV.com sites generalized portals. “If you want weather or you want to go to sports,” said Tom Freston, chairman and chief executive of MTV Networks, “you do not go here.”

Asked whether Viacom intends to create a larger portal site, Chairman and Chief Executive Sumner M. Redstone responded, “We might do that later.” He added, “Niche programming is what we do best.” With the MTV and Nickelodeon sites, “we are reaching a particular targeted group.”

As part of the plan, Viacom announced the acquisition of Imagine Radio, a privately held distributor of music and other audio online, and of Nvolve, a Web site development firm based in San Mateo, Calif. Those firms and Red Rocket, an online retailer of children’s educational toys Viacom acquired in November, will become parts of a new Internet division to be based in San Mateo.

As outlined Tuesday at a briefing in Beverly Hills, the new division will create a Web site for Nickelodeon, tentatively called “Project Nozzle,” specifically to attract the TV network’s 6-to-12-year-old target audience. The site, which will be an enhancement of the existing and largely promotion-oriented Nick.com Web site, is scheduled for launch in September.

Nickelodeon officials said that for security purposes, youthful visitors to the site will be required to have their parents or guardians register them, although the technology to verify that the registration was executed by a grown-up is still under development.

The site will include games, separate supervised chat rooms for children and parents, promotional material for Nickelodeon programs, and other material.

Freston stressed that it will be “a kids’ online service, not part of an adults’ service,” apparently to distinguish it from Disney Online, an agglomeration of Web sites that include family and children’s offerings.

The enhanced MTV site, tentatively called “The Buggles Project” and to be launched in June, will allow users to download song and other music clips customized to their musical tastes, much as one selects a jazz or rock station on the radio. The site will link directly to music retailers so users can place orders for music as they listen.

As it happens, although the MTV cable channel’s stock in trade is music videos, the new MTV Web site will not initially offer online video clips. The reasons, Viacom spokesmen said, are that the technology for smooth playback of video clips does not yet exist for most Web users’ download speeds, and video distribution raises more complex licensing issues than do music files.

Viacom said it will devote $250 million in advertising time on its cable networks to promote the new sites during the next five years.

Major media companies are grappling with how best to stake a claim to the fast-growing Internet, which many see as an indispensable medium for cross-promotion of television programming, movies, books and other entertainment content.

Disney, NBC and USA Networks have chosen to invest in or merge with existing Internet portal sites in hopes of gaining access to the millions of users who rely on them as home pages from which to surf the Net.

Disney in November acquired 43% of the search site Infoseek and made it the core of its Go Network, launched in January. Go serves as a central portal for Disney company Web sites ranging from those for its ABC television network and ABC News to Disneyland and the Disney Cruise Line.

Viacom, however, judged that inflated Internet stock valuations made such a step more costly than it was worth. Moreover, it believed that MTV and Nickelodeon were potent enough as brand names to attract Web visitors on their own.

“We don’t think we need a big portal to drive traffic” to the sites, Freston said. That’s especially true, he said, given that the top portals, including Go, Yahoo and Excite, are virtually “interchangeable” in appearance and capabilities.