The REVisionists: Dave Howe on How NBCU is Building A 'Bluprint' For Its Post-Cable TV Future

Among a string of experiments and ventures at NBCUniversal, few are as intriguing as Bluprint, the revamped hobbyist education and e-commerce site formerly known as Craftsy that the media giant is using as a test case for building sustainable businesses in the streaming-video future.I talked about Bluprint and its transformative potential with Dave Howe, president of strategy and commercial growth for NBCUniversal's cable entertainment group, which includes networks such as E!, Bravo and Oxygen, the UCP studio focused on scripted programming and Wilshire, its unscripted programming studio.I teased Howe for his rather nebulous title, but as he said during our conversation, it allows him to range across the organization, overseeing numerous ventures intended to evolve a very large, traditional TV-production and -distribution company for the looming future of online, interactive, streaming services with direct connections to consumers.NBCU acquired Craftsy in 2017 and since has been reshaping it into "a Netflix for hobbies," a subscription VOD service for learning hobbies with major commerce and community-building components. And leveraging that NBCU relationship, the site will be taking on a fourth "C," celebrity, as it develops.Our recent conversation focused on how Bluprint can be, yes, a blueprint for reshaping NBCU's traditional TV units. It's a provocative vision of what TV in the interactive future will be. This Q&A has been edited for length and clarity.TVR: I've been pondering NBCU's online strategy for months, especially after last year's bids to buy Fox and Sky. Where does this fit in? And what's the big picture?DH: I can't talk to the whole of the NBCUniversal digital strategy, but I can certainly talk to our approach within the cable portfolio, and I think it's mirrored in other areas of the company. You can see this going on in the sports division, in the news division, almost every division will have an equivalent of me and my team and I think the object of the exercise is to explore new revenue streams, primarily digital, that are complimentary and strategically fit with the business that we're in now.We're obviously a content company, driven by two primary revenue streams: ad sales and affiliate sales from the MVPDs and cable operators. But where we see an opportunity, especially in the direct-to-consumer digital space, is in the new revenue streams around e-commerce and subscriptions. Those direct-payment opportunities give us a relationship with the consumer that provides a lot of data and real insights into consumer behavior. It enables us to build that into our core content business using storytelling and the old traditional kind of way that we use content and build those companies and those products into them in a way that's very organic.TVR: So when you talk about the data, how do you use this to understand those passionate subscribers there and elsewhere Those folks do other things besides quilt or knit or whatever. How does that information affect other products or programming you're creating?DH: The reason we bought Craftsy just over a year ago and then rebranded it to Bluprint is because we love the business model. It's a video-based business but half the revenue has come from people buying video classes and the other half from e-commerce, buying tools, materials, capabilities in terms of building your hobby.We rebranded it because we saw an opportunity beyond the primary crafting space that they're in now. Crafting, knitting, sewing, etc., are cool craft areas but the fastest growing areas of the business are cooking and baking and drawing, art, photography.And we see an opportunity to push the business into new categories like kids and family performing arts, writing, music, dance, and potentially down the road, sports coaching. These are all areas that, if you think about the collective NBCUniversal family, other parts of the company could support.So in the subscription model we launched last year, we (started) to think about how do we take this business from an hour-card transaction where you just buy classes to a Netflix for lifestyle learning, a Netflix for hobbies.That enables you to build a big subscriber base and offer something for everyone, which is the road we're on. So you know you talk about quilting and crafting which are obviously the important areas of the existing business but in you know, one to five years we see this as a much bigger opportunity for usTVR: Craftsy was getting its revenue from sales of supplies and video lessons. When you go to SVOD, how does that evolve?DH: We're still aiming for a 50/50 split between SVOD and the commerce business. We still expect people to buy tools and materials to help them get better at their hobby. We're expanding that ecommerce capability into other categories.We're also launching Bluprint Boxes, get started kits that,  if you've always wanted to paint watercolors or you've always wanted to embroider, this gets you going quickly. You have an expert teaching you how to do it in the classes, and then you have the materials that arrived in the mail that get you up and running very quickly. The challenge with people finding hobbies is they don't know where to begin. They don't have any roadmap of where to start. And they stumble around.This is a structured learning opportunity in a fun way that gives you access to the world's experts in those categories and materials and a plan and a roadmap and a blueprint that will really take you deeper into the subject and help you enjoy that hobby so much more over time.We're building a much more loyal audience because you have that regular subscription loyalty and then we will build into all of those classes the commerce capability and potentially have a business balanced between video subscription and physical products.TVR: When I subscribe, what am I getting for my subscription dollars?DH: You're getting access to 1,300 classes, a hell of a lot of content across  different categories. Your family may be more interested in (other categories) than you are. Then you get access to a content strategy evolving over time where we are, on a monthly basis, adding content, new classes, but also more lean-back content.Some classes have celebrity-based talent. We've been creating formats that are family friendly, giving you a learning component, but are also entertaining. We're also plugging in acquired content that we can source from the US, the UK or Canada or Australia, (like) Jamie Oliver-type cooking and Nigella Lawson, categories that make sense for us.You get a rich treasure trove of content we're always adding to, so you will always be anticipating and looking forward to things coming later in the year. It grows loyalty the same way that Netflix is spending billions on content. We're obviously not spending billions but what we are giving you a subscription that is great value, an all-you-can\-eat buffet that will keep you entertained and informed and engaged and have something for all the family.TVR: I could see you doing your own version of The Great British Baking Show," or library content from all your reality programming. Because it's delivered digitally. what's your vision for the class component? Are there tests?DH: The classes are interactive, one of the digital features we love. Not only are you getting a class from an expert, you can ask questions. As you're watching the class, you can look at the questions other people have asked, you can ask your own questions. It's all synced so as you watch, you can see what everybody else has asked. People really respond to that, and they also respond to the community that this builds.We've also invested in growing the communities, so you have that shared learning and interaction. People will upload photos of what they've created or will talk about their, learning experience or hobby.If you look at the categories we think we could either invest in or acquire or partner with, the ones that come to the top have what I call the Four Cs. You;ve heard of Content, Commerce and Community but I had a fourth bucket that we're calling Celebrity or Influencer.So if there is a content business that also has a commerce capability, that has a destination and a consumer base and a community base, and it leverages personalities and artists who are telling stories and it has a content video overlay to it, those are businesses we're very interested in. That in essence is our strategy across the cable entertainment group.We have partnerships in the design space, we're talking to companies in the genre space and you will see over the coming months other companies we have commercial partnerships with.TVR: Why are you pursuing partnerships as opposed to acquisitions?DH: I think of commercial partnerships in the same way that we work with advertisers and we work with brands. Partnerships enable us to road test more businesses. We can see how quickly we can grow them.An acquisition is a relatively blunt instrument. You really have to believe In the company and there's a finite amount of companies that you could roll up to really make a difference.So most big media companies like ours will have a combination of those bigger cross-industry mergers and acquisitions. And then within each company, you will continue to see smaller acquisitions and partnerships that are more specific to the division working with them. These smaller partnerships are more core to the division and the business.TVR: Why do you want to focus on the celebrity/influencer space as part of what I'll call this strategy of next-generation media?DH: What we love about Bluprint is that we're identifying not only people who are expert but people who are camera friendly, who have personalities that we can create content formats around. A lot of the Bluprint instructors have been on pretty much every area of the company. We have regular integrations on the Today Show. NBC Universal is in the talent business, the content business, the storytelling business. Finding businesses where you can build talent and use that talent to create programming and content is very organic to our underlying core business.TVR: So it feeds new experts and new talent into the bigger NBCU hopper for show appearances. It's almost like they're doing a feature verse in a hip hop song, and then they can go do their own song.DH: That is a great analogy. We're finding new talent and we're finding more vehicles for that talent to play across all of NBC Universal.TVR: How often do Bluprint stars appear on other NBCU outlets?DH: Several times a month at this point. We have a monthly segment on the Today Show, primarily cooking and baking because that's easy for the Today Show. Going forward, we'll explore more hobbies, especially with the Bluprint Boxes, which give people a great way into a particular space.Across Bravo, we've had cake decorators on The Shahs of Sunset. We've had people build things on the Kardashians. We've had the Real Housewives do a Paint and Sip (gathering) with one of our instructors.The storytelling nature of what we do make makes it very easy to integrate into our lifestyle content. We're looking potentially at America's Got Talent, World of Dance. We're using experts to teach people how to do things better. Every time you see that kind of performance or creativity within our existing content, there's an opportunity for us to showcase and accelerate the growth of this business.TVR: It all seems smart and untraditional. It also seems like something Amazon either is doing or probably is about to do next week. So how are you handling fulfillment?DH: Bluprint has its own fulfillment capabilities, with a warehouse that we'll obviously expand. We're moving more and more into private labels to increase margins and create more exclusive product for us, That is a capability we've offered to other areas of the company. Bluprint is the only part of NBC Universal that really has a sophisticated fulfillment capability extendable into other areas.TVR: Do you see that e-commerce component as an important part of NBCU's future operations, even for your traditional shows?DH: Yes. If you look at the big digital companies, and you mentioned Amazon, what most of them do is start in a particular niche space and then as they expand and become massive, they can basically move into everyone else's spaces.Amazon launched its own video-content business, as has Facebook, as has Apple, etc. Once you have that scale, you can basically leverage that direct relationship to grow new revenue streams. That's what we're doing too.We started in the content space, and potentially, we're going to build a sizable e-commerce capability across the whole company, because it makes sense.If you look at the talent we've grown across our cable portfolio, in particular, with the Housewives and the Kardashians. All of those big-name talents have created their own merch businesses, and they're making a lot of money off of their fame and their direct-to-consumer, social-media relationships, etc.We're doing the same thing now. Rather than letting our own talent figure out how to build businesses off the back of the fame that we provide, we're looking at how we can also do that in tandem or how we can help them do that and give them ways to build those businesses.TVR:  Are you anticipating building your own talent or looking to partner and bring in people who already have followings?DH: I think it'll be a combination. We have a relationship with Snap, and we're identifying talent that we can create Snapchat content around. Looking at that third revenue stream is just something that if you look back, you've always been able to buy DVDs or box sets, or consumer products around movies and TV shows. What's new about this is we're now creating products that are slightly less based on the TV content. They are still organic to the content that we're making, but aren't just branded Top Chef knives.TVR: The other big interesting question is how you'll infuse the new kinds of data you talked into your operations. I haven't associated with NBCU the same investments in data analysis that I've seen with companies such as Turner. Give me an idea of how you hope to use that data both in Bluprint and connecting across all the NBCU operations.DH: First of all, there's a hell of a lot of activity around data across the whole company. The sales team in particular is absolutely state of the art in terms of figuring out new ways to build off existing data, overlaying Comcast data where it makes sense. There is a cross-company initiative to streamline data and provide access to data for every single division. The Bluprint data will become part of that, and will be used to build and drive and steer the company.It's not just the future, it's the now. Any business needs to understand how its consumers interacting with content or products, and analyze the trends and the behaviors that will enable us to develop more products that are better suited to growing these businesses.