NBCUniversal invests $500 million in Snap

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NBCUniversal is now the only U.S. media company that has an official stake in Snap. Today, NBC Universal (which is a unit of Comcast) revealed that it invested $500 million in Snap as a strategic investment partnership during yesterday’s IPO.

Snap shares popped 44 percent in the first day of trading.

NBCUniversal has been pursuing digital media aggressively in the past year, including investments in Buzzfeed, Vox, and acquisitions of SportsEngine and Awesomeness TV. According to CNBC, NBC has spent approximately $1.5 billion on digital media assets in the last 18 months.

While Snapchat has continued to grow in popularity among teens and young adults — partially through funny photo filters and stylish recording sunglasses called Spectacles — the company’s content push hasn’t been quite as well-received.

Discover, Snapchat’s ‘news’ platform, requires publishers to write and format content specifically for Snapchat, and all of these stories have only 24 hours to live on the platform before disappearing.

The investment from NBC Universal may signal changes to Snap’s media strategy.

Given the current climate around the media — cough Fake News! cough — it would be interesting to see Snapchat position itself against Facebook as the place for ‘verified’ news information. Imagine if Discover focused on giving you direct access to journalists and broadcasters for their professional take on today’s breaking news.

Of course, NBCUniversal could have invested in Snap as a way to move forward its entertainment businesses, such as NBC programming and Universal Studios films.

That seems far more likely than the news play, considering that NBC has already worked with Snap for projects like the Rio Olympics, with other series (such as SNL, The Voice, and more), which are in the works to air on Snapchat.

Update: Re/code has obtained a memo from NBCU CEO Steve Burke sent to employees regarding the investment:

I am writing to share some exciting news. Yesterday, NBCUniversal made a strategic investment of $500 million in Snap as part of its initial public offering. This is a significant milestone in our growing partnership with Snap, and we look forward to participating in Snap’s success as an investor and continuing to work closely with them for years to come.

Evan Spiegel and his talented team have done an outstanding job building Snap into an extremely innovative and relevant company, attracting a massive, dedicated and young audience. Over the last year, we have partnered with Snap frequently. Most notably, we produced a pop-up Discover channel which featured Olympic content produced by BuzzFeed. Throughout the Rio Games, this content generated over two billion views. On the heels of that success, we are already planning an expanded partnership with Snapchat and BuzzFeed for the 2018 Winter Games in South Korea. Our entertainment programs have been among the first shows to launch a Snapchat series, including The Voice, SNL and E! News’ The Rundown. We expect to launch even more Snapchat shows with additional NBCU brands in the coming weeks.

Our partnership with Snap builds on our strategy to drive digital growth for our business, both organically and through investments and acquisitions. In the last year and a half, we have invested $400 million in BuzzFeed, $200 million in Vox, and launched key initiatives with both companies. We also acquired SportsEngine, a digital business that is revolutionizing the way youth sports are managed online.

Through our acquisition of DreamWorks, we became a majority owner of Awesomeness TV, a popular entertainment brand with one of the top channels on YouTube. Fandango has acquired Flixster, Rotten Tomatoes and several ticketing and video on-demand services.

In addition to these investments, in the last year we have launched two OTT channels — Seeso and Hayu — broadening our reach among passionate, niche audiences. We also formed the Digital Enterprises group under Maggie Suniewick. Maggie and her team are helping us forge deeper partnerships with major platforms, as well as looking for opportunities to invest and create new businesses.

Many of our existing digital businesses associated with our TV brands are also showing strong growth, such as NBC Entertainment, NBC News, E!, CNBC, NBC Sports and the Golf Channel’s GolfNow. Finally, we have participated in the rapid growth of Hulu through our 30 percent ownership stake.

I am proud of the strides we have made in the digital space recently. With the Snap investment, we have invested over $1.5 billion in promising digital businesses in the last 18 months. Importantly, we have become a better, more digitally-focused company as a result.

Looking forward, we will continue to be aggressive as digital content consumption increases. Investing in Snap is a key step in that direction, and I am pleased to share this exciting news with you. It is rare to have the opportunity to invest at this stage in a company as visionary and dynamic as Snap, and it is a compliment that they chose NBCU as a partner.

Steve

Featured Image: Drew Angerer/Getty Images