Part two of our interview with SportsFanLive founder and CEO, and former CBS and Yahoo executive, David Katz. Today we talk about SportsFanLive's approach to original content, its new site devoted to athletes on Twitter, and Katz's thoughts on how his former employees are dealing with the new reality of business on the Internet.

For more on Katz and SportsFanLive, see part one of our interview.

BF: Let's make sure I know the "we" behind this company: how many people do you have working, and is it all kind of your own funding, or have you been outside raising money?

DK: I funded it myself for the first year, while I built the site and assembled the team, because I wanted to be able to go to the community and not just say, "Here's a business plan and here's my background, back me," and have that wonderful conversation with potential investors. Instead, I said, "I believe in this. I'm going to invest a certain amount of my own capital in this, and then a year-plus of my life to demonstrate the value I think it has." We built it. Then we went out to private investors, high net worth individuals, people of strategic value to us, people who are in the sports, media, Internet, finance and advertising worlds, and we got them to invest. We did a full Series A Preferred round, raised several million dollars, and kind of capitalized that last year.

We're well-funded, and we're going to be good for the next several years, on top of the fact that we've been generating revenue, and we were almost cash-flow positive last month. We're in good shape. Now, our goal going forward is to figure out, "Are there big enough opportunities that we may want to double-down on investment," in which case we might require more strategic partnerships or investments.

BF: And about how many employees do you have?

DK: We are very lean. The core team is under ten people. We do have access to a fair number of contractors, depending on what the project is, and we make excellent use of interns.

BF: Do you put any effort into marketing or SEO or anything to get people to the site, or at this point are you more focused on building tools which you use on your site and can then distribute?

DK: To date the focus has been on tool and product development, and on building relationships with advertisers. We have an advisory board of some very senior ad sales executives in this industry, and we want to demonstrate one value to them and use their leverage and their help. I think we've demonstrated through the deals that we've closed and through the great conversation we've had even with people we haven't closed, that we represent something a little different than what they'll find when they get the normal sports site pitch. That's been our focus to date.

Going forward, we're really now focusing on partnerships and distribution of those tools, and we're seeing an interesting trend out there. We've got sites, big and small, who are feeling a bit of the crunch right now, and realize they need to keep evolving and adding compelling content and functionality, but they don't have the resources to do it themselves.

BF: And is it clear how to make money doing that? Do you need to get a revenue share, or do you get sponsorships, or are you figuring...

DK: We're open to a lot of relationships, but one of the most surprising things for us are these small companies. You think you'd go to a bigger company and they'd want to control the ad sales components and all that. A lot of them are overwhelmed, so in many cases they say, "You guys are having such success selling it; sell it, and cut us in on the backside." We're open to any kind of relationship with that – everyone's different – but we're working on a couple of large opportunities.

BF: It sounds like if you go only this direction, you might be more of a platform than a site, but you talk about content, and having original content.

DK: The thing I've learned, I think, is that the platform thing is great. We've seen it with Twitter. They build a great platform, and it took two years for people to really discover it through a whole amazing series of events, and then all of a sudden it explodes. A platform is only as good as its distribution buzz and viral aspects.

I don't think we can, one, put all of our eggs in the platform basket and expect that lightning's going to hit us like that. I've always been a believer that platforms are only as good as the content that flows through it, and I would argue that it's the same with Twitter. It was the celebrities, and the content they were posting, and the mesmerizing content that was actually being pushed through that platform, that all of a sudden people started saying, "I get that platform; I see what it's good for again."

Whether it's CBS or Yahoo, I've always been a believer that ultimately, content will drive the ubiquity of these platforms.

Phase one was always to demonstrate the platform. Phase two is now that the structure of the house is built, let's start adding the wallpaper, the furniture, and all the stuff that people are going to be comfortable in and around and will make them want to spend more time there. My personal belief is that sports-related content on the Internet is very uninspired.

You've got the AP articles, and the news articles that are broken by the sports sites and the newspaper sites, great. There's a huge need for that, and we respect it. Then you've kind of got the talking-head, short form expert analysis video stuff that's being propagated by all these sites, and it kind of looks like cheaper worse television to me, and I'm not really inspired by that, and I don't think people have really grabbed some of the unique elements this medium has to offer and created some more cool and innovative programming around that.

We have a lot of video-oriented experiences that we are looking to take out with partners, and we have a lot of text ideas and editorial ideas that we want to have some fun with.

BF: And will you be looking to compete in terms of having the best content producers, or do you think there's a big network of amateurs or bloggers that you can take advantage of in certain ways?

DK: I think right now that when it comes to the world of sports writing, the video production is a little too incestuous. People tend to go to the same people and recirculate the same folks. A lot of them are enormously talented, and that's why they are at that level, but there are only so many places for those people to go, and they'll pass from site to site or company to company, and I believe that we're not going to be able to compete on price.

Let ESPN and [Sports Illustrated] and Yahoo Sports fight that battle, and go for the big names. You'd be amazed how many big names there are that are interested in doing something with a smaller site, where they can have a little more autonomy and control, but at the same time we think there are a lot of fresh voices and undiscovered talent that can be brought to the fore. I think that's one of the things I've always been most excited about in this medium, so I value maybe a slightly different skill set than the other folks.

BF: With that in mind, when you look forward to what you want the company to be in a couple years, do you want SportsFanLive.com to be really big and get a lot of traffic as well as all your platforms, or do you see SportsFanLive, the destination, becoming a less important part of the business?

DK: I'll be honest: I spent so many years trying to be an entrepreneurial executive inside of a larger organization, and now I'm doing the entrepreneurial thing kind of in-and-of-itself, and one thing I've learned is I can't tell you the answer to that. I've got my hypothesis for how it's going to go, but we also have a slightly different approach. We're playing with a lot of different businesses. There are a lot of people who say, "We're going to do one feature, or one blog, do it as well as we can, and pray that the world coalesces around that being important." Our view is a little different: "Let's build the experience that, as a sports fan, we would want to experience," comprehensively, see if any of those particular areas takes off more than the others, and then double-down in that space.

I'll give you an example: I started registering URLs around the Twitter concept about sixteen months ago. I had first heard about it probably two years ago; I was working with a product guy that I had hired that was one of the early guys on Twitter, using it amongst their friends, so I kind of knew about it early on and I said, "This could be kind of cool." So I went out and registered some really good, beachfront property URLs around Twitter, and I had all these concepts around Twitter, but I was like, "You know what, the platform has half a million uniques right now, let's wait on that." A year ago, I never would have said Twitter could be an interesting part of what we're doing.

Cut to a month ago, or six weeks ago when I'm looking at what's happening, and I'm like, "Now is the time. Let's move fast," and we had this good real estate, so we were able to launch very quickly a site like , and we've got a lot more Twitter-oriented ideas in the pipeline that will be coming out soon.

BF: Are they all around sports?

DK: I personally have a lot of ideas around what people could do for Twitter in general, but my focus in my current role is built on sports. It is possible that we might license out some of the technology we've built, for people who might be interested in doing this in other platforms, be it entertainment or any other genres, but right now our focus is primarily on sports. But I think we've just begun to see what that medium can provide, and that we're just beginning to see what those companies who are starting to feel a little bit of the competitive threat of what Twitter is doing, realign themselves to compete better with where that whole space is going. We're pretty excited about that, and AthleteTweets has gotten a fair amount of attention in the last two days just with our launch.

Twitter is one of those things where – you probably know the numbers better, ten million people on it right now, versus two million a couple months ago – but there are 100 million plus sports fans online in the U.S. every month, so by definition the majority of sports fans are not on Twitter. A lot of them have heard about it now, so the attention it gets outstrips the utility, for people. I believe there is so much compelling content flowing through that space, but it's not packaged in a way that's interesting to a lot of people. So that was the question: "Can you build something that highlights the value of it for fans, without them having to log in and register and everything?"

BF: So let me ask you: In the entertainment space, certainly, there's a lot of question and concern about, "We're putting this stuff online, we're kind of monetizing it; it's not even a fraction of what you can make for the same content on air," and people like Jeff Bewkes are like, "Well maybe we should pull back, and not give away all this stuff for free. Maybe they have to be subscribers, or we're going to lose our business model and be destroyed." From your perspective, is that feasible, or is it done and you can't pull back?

DK: I think the cat's out of the bag, for the most part. I think there are certain areas where people have made the decision to have that authentication take place, or subscription requirements. I personally find it frustrating, and think they're limiting the space, but at a time like this, you look at it and say, "Oh, it's another dual revenue stream," and it makes a lot of sense. Cable's in a much better position than broadcast, and I think their job is to focus on doing everything they can to preserve that model and get the year-over-year subscriber increases they can get. At the end of the day, they need to be focused on one thing: delivering the best content experience to consumers. I think everything else will ultimately take care of itself, but we could be going through a five to ten year period where there is a dip as one medium takes over for the other, that doesn't more than make up for it.

There's always been something new that makes up for something old. This is the first time that there's kind of creative destruction going on. I think it's almost do it at your own peril, restrict access to this stuff at your own peril. But at the same time, I think what should be encouraging to people is that people want to watch full-length, high-quality television programs on the computer, and through these digital channels. 

To me, that was always an open question: Would people want to sit there? Would the quality experience be good enough? If I were them, I'd be breathing a sigh of relief that the content we produce and the formats we've come to develop around comedies and dramas and talk shows, etc, still work in this new medium. Because everything's going to be IP-delivered at some point.

BF: Do you think it's still an open question whether or not the portals, such as AOL, Yahoo, etc, have a clear future and a clear business?

DK: I don't know if anyone's future is clear at this point, big or small, but I'd much rather be attacking that problem that everyone's facing with 500 million unique users a month, who still come in every day to check their email and look at the news and finance and check their sports scores. I think the portals still have a huge competitive advantage. I think they need to reinvent themselves in this new medium, and I think they need to figure out what their focus needs to be, because they were probably in too many businesses, a jack of all trades and master of few. I wouldn't say none, but I would say few.

I think the future for Yahoo, just looking at it, is extremely bright. It may not have the cool, edgy view of a Facebook or a Twitter, it might not have the kind of commanding revenue stream that a Google has, but they place significantly in so many businesses and they have a goodwill with the consumer that you cannot buy today.

I think it's interesting to watch what an AOL is doing, focusing a little more on original entertainment, original content. I agree with that strategy, and think there's an opportunity there, and I obviously agreed with that from a Yahoo perspective, because that's why I wanted to go over there. So I still believe that these portals have vast competitive advantages, and I do believe that they're not going away. There might be consolidation, and pieces combined, but the future for those companies – once they get through this period of angst that everyone's feeling – is going to be very bright.

BF: So now that sports is your full-time job, does this make you even more of a sports fan, or are you sick of sports?

DK: I've always loved sports and entertainment equally; when I went to Yahoo, it was my dream job because I had a chance to manage both. When I left Yahoo, and I kind of started writing in a journal what I do every day – because I was looking at some opportunities that were entertainment-related, some that were sports-related – I realized that the first thing I do when I come home is turn on the ESPN, I go online and I'm checking the local scores and reading my local newspapers back in Baltimore for the sports-oriented stuff, and I realized I was spending so much time doing the sports thing – and I had the worst college basketball career in the history of the NCAAs, I don't know if you know this, but I scored a grand total of three career points for the University of Pennsylvania Fighting Quakers. We did win an NCAA tournament my senior year, in '94...

BF: I assume you got to go to that?

DK: I was literally the last guy on the bench. Literally.

I've always been a sports fan, never really gotten that out of my system, and for a relatively short, white Jewish guy, this is the way, I can live out my sports fantasies. It's been a lot of fun, and I love it, so I think I'm a bigger sports fan today than I even was before, because I realized I could find a way to get paid to do what I love and do anyway.

David Katz has seen the online media business from all sides: First at a traditional television company, then for a Web portal, and how at his own start up.

At CBS he was senior VP of strategic planning and interactive ventures, which put him in charge of the network's website as it was first evolving from, essentially, a marketing brochure to a destination with real content. In 2005, after leaving during a shake-up at CBS, he joined then-new head of media Lloyd Braun's team at Yahoo, overseeing sports, entertainment and original video production. By late 2006, perhaps seeing the writing on the wall, he left just a week before Braun did the same.

For the past two years, Katz has been developing his own site, SportsFanLive, which launched last summer. Katz's goal with the site is to bring a more social, more personalized, and more local experience to online sports business currently dominated by sites like ESPN, Sports Illustrated, and his own former Yahoo Sports.

Last week Katz spoke to Technotainment about his new company and the overall industry. In the first of a two part interview, he discusses his goals with SportsFanLive and how it's competing with much bigger players. Tomorrow we talk about new approaches he's taking and the overall online media market.

Ben Fritz: Tell me about the premise of the site. What are you trying to do? Why did you start it?

David Katz: The whole concept of SportsFanLive was... When I was at Yahoo Sports, and CBS before that, those sites had a very good run. Yahoo Sports did incredibly well, became a number one sports site on the Internet, and we saw a lot of potential there, quite frankly, that wasn't even being realized.

Yahoo Sports was great at aggregating news and information, then breaking stories, putting video out there, but my personal belief was that social media was going to play a much larger role in the sports space. When you think about the sports experience, it shouldn't be any dissimilar to the experience that someone has when they walk into a sports bar. There's a socialization process: you care about certain teams, you're there to watch a certain event, you're there to engage with the people around you who either love your team or hate your team.

So the question we asked was, "If you were building a Yahoo Sports or an ESPN.com from scratch today, knowing everything you know about social media and where that's going, knowing everything you know about how the traditional media DNA needs to evolve to include the bloggers and the blogosphere and everything that's going on there, how would it be different – would it be different? – and more importantly, can you innovate in that space?"

That's because a lot of these sites started to look the same. You change the color of the site, you change the logo at the top, and swap out of a couple of the writers they had, and it's effectively the same site powered by the same content coming from the stats.

So at SportsFanLive, we took that step back and said, "Let's just think about the space, and be innovative." And what we built at SportsFanLive was an ecosystem that, we think, had a level of innovation that didn't exist on a lot of the other sports sites, both large and small.

It really came down to to three buckets. One, aggregating the best news and information, personalized to your favorite teams and players. We didn't see enough personalization on these sites and we felt like ESPN didn't want you to know that SI.com wrote a really good piece about your favorite team. I still believe that the majority of sports news is broken at the local newspaper level, and they don't get enough credit for that, so we aggregate all of that stuff from all the sources in one place, and we think we've got the most robust filtering and aggregation system that exists for sports sites.

Two, the community aspect. "Can you pull in the right information from the relevant people, and connect users with their friends and other relevant folks?" When I go on ESPN and some of these other sites, I've never felt the impetus to share what I'm experiencing there with anyone else. I kind of read the article, and if I like it and there are some great articles there, I move on to the next article, or I see the next video clip. Our standpoint is, "Can we build those connections between people?"

Mind you, this was two years ago we were conceiving of this. Facebook was small, but we thought had potential. MySpace was big. YouTube had just been acquired. We opted for more of a Facebook-ian experience, where you bring your friends in and you connect more to what your friends say or do. But we also said, from a social perspective, "Could you come up with innovative features that do not exist today?" and one of those that we came up with was called FanFinder.

The concept of FanFinder was very simple. I'm from Baltimore, I'm a big Baltimore sports fan, I live in L.A. now. It's guaranteed that they will never show a Baltimore sports game here in Los Angeles as long as I live, so I'm forced to go out to a sports bar if I want to watch the Ravens. So I'd go out to these sports bars, and no matter where I went, I was surrounded by Steelers fans, guaranteed. They're everywhere. So I ask myself the question, "Where do Ravens fans in Los Angeles get together to watch these games?" Thus, FanFinder was born. It's effectively a sports bar locater where fans tell you where they're going to watch certain games, and you can sort of cluster around your team affinities.

Well, we decided to take that one step further. We got a lot of attention when we launched around that feature, because from a high concept standpoint, people found it pretty creative, and it solved the specific sports fan need. We were approached two months ago by Panasonic, who said "We love that feature – what can you do that's new and cool around it?" So we created our first iPhone app.

FanFinder Mobile uses GPS to identify where you are in the U.S, will immediately tell you where the ten closest sports bars are to you, wherever you are, and then you can specify the teams you follow, shake the device and it will re-sort to tell you whether there are any sports bars catering to your team's fans within X number of miles from your location.

BF: And Panasonic is going to be sponsoring it?

DK: Panasonic is going to be sponsoring it. I think part of the rationale was that they're excited about the idea, they have a new Panasonic TV that was coming out that's great for sports, and were trying to push that into sports bars around the country. "Here's a way to get people into sports bars." So they were the official sponsor.

We got it up literally the day before the NCAA Tournament, and Apple... you know, dealing with these companies, it's a bit of a black box. You go it, and there's no one you can talk to. You follow the rules in the API, and you do your best to present something you think they might like. Apple loved what we were doing. We got a phone call from them, and they said, "We're approving your app. We love it. It'll be in there for the Tournament," and they actually made it the number one featured app in the entire App Store for the first ten days of the NCAA Tournament.

It was phenomenal. It's the best promotion money can't buy, and it was really just about touching a chord with them that they think is interesting and utilizes a lot of the cool things you can only do on an iPhone.

BF: It seems like regardless of whether you're getting local content for me as a fan, or you're getting information on a sports bar, that's a lot of information. Are you developing a platform around that, or are you having to get that manually in a lot of cases and enter it? Where does that data all exist?

DK: We spent the larger part of almost a year building a platform and the majority of that stuff is automated and filtered. There's a little bit of human intervention in terms of building the databases, in deciding what you're going to be culling from, and pulling from, and where those sources are, but we wanted to make the effort today to get all that stuff so it could run on its own. We have a very small team with limited manpower, and we want to make sure we're putting our efforts towards the most important things.

BF: But is there a database of what sports bars, for instance, are for which teams?

DK: We built it.

In the final part of our five part interview with Jeff Dossett, Yahoo's senior VP of audience and head of the Santa Monica office, we talk about the biggest picture issues: The meaning of the Yahoo brand, the relevance of a portal with a home page, and whether digitally savvy audiences are still interested in what his company has to offer.

For more on Dossett, read the introduction to part one of our interview. Read part two here, part three here, and part four here.

Ben Fritz: Going forward, when you think about “What is Yahoo?” and/or “What is Yahoo content?” do you see the old portal model where people come to a homepage and you can shoot them all around as something that's becoming less and less important? The “I am a Yahoo user, I go to Yahoo.com, I go to Yahoo Mail, I go to Yahoo News,” versus “I come into it a million different ways?”

Jeff Dossett: Great question. I think the front page will continue for many years to be an essential experience for Yahoo users. It's where we get to reflect our understanding of a broad set of content and information and service needs and try to curate that experience. Try to find the best: try to make it easier for people to find the information and services and experiences that matter most to them.

I do think the front page or the homepage experience will evolve. I think it will evolve in two key ways. One is, I think that we'll improve our ability to present a more relevant front page experience as an essential starting point to Yahoo users. We'll be able to reflect what we know about you and your interests and your experience on the network, and tune the content experience to your particular needs. That's one thing. Sort of, again, the audience-segment-centric position to deliver the best, most relevant content experience to each and every user.

The other is that Yahoo has clearly, strongly embraced the power of openness. We want to make it easier for consumers to make sense of the Internet, for them, in a way that's relevant to them, and to the extent that there are information sources or services that are important to users that exist outside of the Yahoo network, we'd like to make it easier for them to bring them into the experience, as we've had traditionally in experiences like My Yahoo.

So I think you'll see the front page as a starting point evolve to be more personally relevant and more customizable, including the inclusion of experiences that are currently thought of as outside the Yahoo experience.

We have begun to communicate a little bit more broadly about our plans for the evolution of the Yahoo homepage. “More open, more social, and more relevant” are our three key themes, and I think it's an essential part, because with all of the world's information available online, the burden on a consumer to find and discover the information and services important to them, that complexity is actually increasing right now, and Yahoo has traditionally helped people discover and interact with the content and services that are most important to them. I think that will continue to be one of the key elements of differentiation and the value that we bring to online consumers, so we'll definitely do that.

At the same time, there are many different entry points into the network. There are some people who are news junkies, they just love the news, and that's really the right and most appropriate starting point for them, and we'll want to serve them as well. OMG for others. We think holistic, and we're not dependent on the front page, but we recognize the value it plays in helping simplify the complexity of the richness of the Internet.

BF: And that idea of Yahoo as an editor in a sense, as opposed to, for people who are very tech-savvy, the idea of “I get my RSS feeds, and I have everything, and nobody tells me what I want?” It sounds like you're saying there's still a lot of value, at least for some audiences, in that Yahoo's going to tell you “Here's ten things that you should see,” or otherwise present the user with information that they might not have asked for.

In part four of our five part interview, Yahoo's audience group senior VP Jeff Dossett, who runs the Santa Monica office, talks about whether having an L.A. office still makes sense, his view on infusing social media into the portal experience, and how Yahoo can compete against Google in search.

For more on Dossett, read the introduction to part one of our interview. Reads part two here and part three here.

Ben Fritz: You mentioned the value of being here in Santa Monica. Obviously this office was started when the Media Group was a more separate entity and was being headed by someone who came from the more traditional media business trying to do something more Hollywood in terms of programming.

Now, you're heading the audience group that includes the stuff in Santa Monica, and includes some stuff up in Sunnyvale – Is there still much value in being in Santa Monica? If this were all to move to Sunnyvale right now, would it make a big difference?

Jeff Dossett: I think there's tremendous value being here in Santa Monica. First of all, as I mentioned earlier, this is an incredible market of creativity and innovation in and around consumer content and media experiences. From a partnering perspective, from a talent pool to attract to Yahoo, to our ability to interface and interact face to face, day in and day out, with movie studies for premieres or showings, or even just developing relationships with the key, influential leaders in the media and entertainment business. You asked right at the beginning about the things that sort of attracted me to Yahoo; being in this environment, in this office, close to this industry is a strong attractor.

I do think that if you step back and look at all user behavior online, and you think from a multi-decade perspective – try to think out five, ten, twenty years – one of the most significant trends will be the willingness of users to consume more entertainment in total online, and certainly more content which is traditionally best created in this community and this marketplace. I think there's a great collaboration to be had as that user behavior changes over time.

BF: Who do you see your competitors as, now? We talked about the media companies, but you're a portal, and there's a traditional portal experience in which MSN and AOL are obviously still there competing, and have their own problems, but do you see your competition more broadly than Yahoo's competition may have been three years ago? Whether it's social media, whether it's the old media companies we talked about a little bit before, whether it's online service companies, who do you think about your main competitors as being?

In part three of our five part interview with Jeff Dossett, Yahoo's senior VP of audience who heads up the Santa Monica office, he talks about Yahoo's unique, research- and advertiser-driven approach to developing original video programming, as well as whether big media companies are partners or competitors (or both).

For more on Dossett, read the introduction to part one of our interview. Read part two here.

Ben Fritz: What about your approach to original video programming? It seems like with your new celebrity mom show, I'm forgetting the name –

Jeff Dossett: “Spotlight to Nightlight.” I love it.

BF: It seems like there was the old approach, the one I think Yahoo was taking, was the TV approach, which is “Come in and pitch me twenty shows, make three of them and see which one hits.” Seeing how you developed “Spotlight,” it seems like the content sort of came last. First “What's the audience,” and then you had an advertiser, and then you designed the content around that rather than listening to pitches. Is that right, is that your general approach nowadays?

JD: I think that's accurate. I think that we take a much more audiences-insights-centric approach to determining where can we add value, where can we serve an unfilled or unmet audience need uniquely well, and so we start with the vast amount of data that we have within our interactions with online users, and from industry research, and we keep peeling away layers of the onion to find something that's uniquely actionable – that nugget of audience insight that we can focus our innovation in and around, and when you do that you create blockbuster hits. They break through all the clutter online, and they propel Yahoo to number one.

OMG was a great example of that, as an overall experience. “Primetime in No Time,” for that particular segment. “Tech Ticker” in the business and financial news segment. It resonates so well with the audience: “Help make sense of what's happening in the marketplace today.” We need to have all the articles from the authoritative business content providers, but now we make it more human, we make it more understandable, we make it more relevant to our audience. The engagement level with “Tech Ticker” has been extraordinary. And as a result of that, we've made it easier for people to consume the content in a manner in which they want, and subsequently they interact more deeply with the rest of content on Yahoo Finance.

There are so many examples: “Good Morning Yahoo,” for news. “The Sports Minute,” for sports. These all come from audience insights first, and then, working with advertisers who also are trying to connect with this audience, we collaborate and then identify unique, compelling, innovate experience for users, and we build that and deliver that, and each time we do that we create a hit.

It's focused, targeted original programming. We're not confused about which business we're in, or what type of company we are. The vast majority of content that exists on the Yahoo network is licensed or acquired from other people who are experts in that area, but we can absolutely add value, and original programming is a great tool, or tactic that we use. It really adds the Yahoo tone, personality and essence to the experience that might otherwise be somewhat commodotized or equivalent across the market.

BF: Along those lines of content, I'd like to get your perspective on how you see Yahoo partnering or competing with traditional media companies, networks, etc. One great example might be something like Hulu. I think when it started, we all thought, “Oh, Yahoo and the other big websites are going to be the place people find this content,” and it seems like Hulu.com has become a much bigger competitor than maybe a lot of people thought, as opposed to the syndication model. Do you still see them as really valuable partners and advertisers, or do you also see them as competitors you're going up against in some categories?

In part two of our five part interview with Yahoo audience group senior VP Jeff Dossett, whose responsibilities include the Santa Monica office, he explains explains why his company is targeting its content at professional Moms, why entertainment and celebrity news is a top priority, and why he's more interested in working with partners for music.

For more on Dossett, see the introduction to part one of our interview series.

Ben Fritz: When you talk about your audience, do you see it as everyone on the Internet? Do you think at this point that you need to make the Yahoo brand as relevant to an eight-year-old as to a really digital, Twittering, Facebooking 21-year-old, as to a 50-year-old parent who's only quasi-Internet-literate?

Jeff Dossett: I kind of refer to that as the billion dollar question.

On one hand, because of the sheer breadth and depth of the audience that interacts with the Yahoo network, it is representative of virtually everyone online, but within that large universe of users and consumers, we are identifying priority audience segments. We're doing a lot of work looking at “Who are we best serving?” from a content and media experiences perspective, and “Who are the audiences that advertisers are looking to connect their brands and their performance offers with?” and prioritizing the audience segments and tuning the programming and content experiences to those priority audiences.

We can't be all things to all people; we need to make some choices of which are the priority audiences. We enjoy a very unique position in the industry; the entire online audience is represented across Yahoo. We have the opportunity to select within that vast universe of users the priority audiences, and better serve them – maybe even attract more to the network – and it's not as if we'll disenfranchise the less prioritized audiences, but when we think about incremental investments and new experiences where we are going to place our innovation investments and bets, we'll be very targeted and very focused.

[CEO] Carol [Bartz] talks a lot about focus, and it's one of the great things she's brought to Yahoo; this constant, positive, constructive questioning about what are we going to focus on and why. Focus means different things to different people at different times. In some cases, it's “What should we do?” and “What should we not do?” and that's really around, “Where do we think we as Yahoo have the capability to do something unique, something differentiated, something that stands out from the pack?”

“That sounds like something that's good to focus on, we should do that.” If we're doing something where we're doing an okay job, but not an amazing job, we ask ourselves the question: “Should we increase our investment and focus on that to get it up to a number one or number two position, or should we do it differently?” – not necessarily not do it, but maybe do it differently – “Where can we better leverage a partner who can help us better serve that audience segment?”

In some cases, we'll say, “We're not particularly differentiated in what we do; we don't really know of another way to do it any better than we do it right now; we're not well servicing the audience segment; that's not constructive for the Yahoo brand and experience,” so we might not do it. Focus comes in a lot of different forms, but it's a very powerful tool.

BF: I'd love to drill into that a little, and maybe first talk about the audience. Can you maybe give some insight into what audiences you're prioritizing? Which ones you're looking at and saying, “This is the one we can really nail” and invest more in?

JD: There will certainly be more than one priority audience segment, and there are lots of different ways of defining audience segments. You can define them on demographic criteria, like gender, age, or something of that nature, or you can look more into needs, behavior and intent. If you take more of the demographic perspective, we over-index, if you will, on a couple of key categories.

A particular segment of the female online population, moms with one or more kids who live very busy lives. We often refer to them internally as “Chief Household Officers,” reflecting the complexity and breadth of their responsibilities both at home and professionally. It's an audience that's of very high interest to advertisers because they spend a lot of time online, they're very influential in a very high percentage of household purchases, and they're actually not well served online today. As an industry, we haven't made it easy for that audience segment to find the content that's relevant to them, that helps them make the decisions they need to make, help them be more productive, etc.

Observers in the traditional media industry can be excused for never quite getting what Yahoo was doing here in Los Angeles. Yahoo never seemed to quite know either.

Since its founding four years ago, the Santa Monica-based Yahoo Media Group, which houses all of the company's content production, has seen three executives come and go: Former ABC president Lloyd Braun and two of his deputies, Vince Broady and Scott Moore, who each minded the store for about a year before moving on. Braun pushed and the company abandoned a plan to produce network television-caliber programming. Broady's attempt to build "brand universes," destination pages built around top media brands like Harry Potter and Halo, was equally unsuccessful.

At the same time, Yahoo has had three CEOs -- former Warner Bros. chief Terry Semel, co-founder Jerry Yang, and current office holder Carol Bartz, who took over in January. There have been numerous reorganizations and executive shifts, along with layoffs, in an attempt to stem a slumping stock and challenge nimble competitors like Microsoft, Facebook, and of course Google.

Jeff Dossett is ready to put chaos in the rear view mirror. Tapped in November as senior VP of U.S. Audience -- a post that puts in charge of the Santa Monica office along with some businesses in the Sunnyvale corporate headquarters -- he oversees every consumer-facing business, from entertainment to news to the front page to search. Recruited from a similar job overseeing MSN for Microsoft (a post that was ironically filled by Scott Moore), he has brought a decidedly non-Hollywood style to the job, streamlining operations and focusing his staff's efforts on using technology to enhance their content and attract audiences, rather than try to compete with Hollywood programming or adopt their brands as his own.

There isn't even a Yahoo Media Group anymore, for all intents and purposes. Yahoo Santa Monica simply houses the content production components of the audience group, like movies, television, news and sports.

In his first major interview since he first took the job, Dossett spoke to Variety about how Yahoo can handle its competitors, work with traditional media, and produce original series in its own unique way.

In part one of a five part conversation, Dossett explains why leaving Microsoft for Yahoo was like moving to the "big leagues"  and how Yahoo can improve its content production and presentation by focusing on delivering key audience segments exactly what they want.

Ben Fritz: So how much time do you spend down here in Santa Monica?

Jeff Dossett: I live in Seattle, but I spend Mondays in the Sunnyvale head office, and then Monday nights I fly to LA and stay here for the rest of the week.

So basically four out of five days, and then multiple times, including this weekend, I stay through the weekend and – my wife's flying down, and one of my kids is flying down, and we love it here.

BF: Well before we get into what we're doing and how you see things, I wanted to sort of start with your coming here, which I think was November?

JD: November fourth or fifth.

BF: It seems you went from one job that was somewhat similar in scope to the same job at a different company. I'm kind of curious what motivated the move.

JD: I wanted to play in the big leagues. Really, that's the essence of it. I was executive producer of another major online portal, but really – this is Yahoo, and Yahoo is literally number one or number two in virtually every category it competes in, and that was an incredible opportunity to work with the largest, most engaged audience online. I think it's an amazing time in the industry, and leadership matters. It matters for the audience, and it matters for the advertisers, and really, being able to work with the assets Yahoo has, and figure out how to better package them and present them to meet the needs of audience and advertisers, was really just a once-in-a-lifetime opportunity. Despite all the time I'd spent in a previous role with a previous company, it was a very, very easy decision for me to make once the opportunity became available.

In the final part of our discussion with Lionsgate's digital media president Curt Marvis, former CEO of CinemaNow, we discuss what went wrong (and right) at his former company, his company's approach to video games, and what technology he thinks could be "the new DVD for the film business."

(For more background on Marvis, see the introduction to part 1. Read part 2 here.)

Ben Fritz: How did you feel about CinemaNow’s sale a few months ago?

Curt Marvis: So to speak… (Laughter) [CinemaNow, in which Lionsgate had a 21% stake, was acquired by Sonic Solutions in November for $3 million. Over its lifetime it raised more than $40 million in venture capital.]

BF: Yea, so to speak. Obviously that’s not what you were thinking in 1999, I’m sure. Was there a pointing the past couple of years where the studios were taking a different tack and iTunes was succeeding and CinemaNow wasn’t where it needed to be? Was CinemaNow only useful for its technology in the end?

CM: The biggest mistake that we ever made in the operation of CinemaNow is we started way, way, way too early. No one could have predicted that. Keeping a company that wasn’t profitable in business for 10 years was kind of miraculous, really.

I think what really happened is that that entity still needed a lot of investment and to create a real business out of it is still going to take time. And we were in an environment where that was when the market crashed we were in the middle of raising a round and the existing investors said we just cant put more into this. We’ve tried and we’ve tried and we’ve tried and it’s always been “next year… next year… next year… next year…”

CinemaNow I think is following the strategy it has been following for a number of years which is to get away from being a destination site and focus its efforts on being a backend supplier of other peoples’ businesses on a branded or white label business. It’s gaining a lot of traction in that regard. There are some deals that haven’t been announced. The Blockbuster thing was announced [In January, Blockbuster signed up CinemaNow to power its Movielink digital download service. Movielink, which was bought by Blockbuster in late 2007, was CinemaNow’s primary competitor for many years] and we’ll see how that pans out.

CinemaNow’s going to get a shot to succeed as a business. Whether it does or not, I’m not sure.

BF: Is there some kind of personal vindication to see Blockbuster buy Movielink and then they need to use CinemaNow to run the thing?

CM: I can’t say I was disapp—It was ironic to have that happen.

I’m proud of what CinemaNow achieved as a groundbreaking company. I’m obviously horribly disappointed in what it achieved as an investment and an ultimate financial success.

Part 2 of our three-part discussion with Lionsgate digital media president Curt Marvis, former CEO of CinemaNow.

Here we discuss what types of content sell best in digital, how the business model for online distribution of movies and TV is challenging old Hollywood and how Lionsgate is handling it, his approach to original content on the Web, and why Lionsgate's new TV show "Instantly Rich" is a "stimulus package for the television industry."

(For more background on Marvis, see the introduction to part 1)

Ben Fritz: Lionsgate more than other studios has strengths in some specific genres. Do you see any genre-specific differences? Does the horror stuff overperform in digital? Does stuff like the Tyler Perry films sell less than on other platforms? What do you see doing the best in digital?

Curt Marvis: It actually in many ways I think mirrors homevideo. I think you’ll see maybe an R-rated comedy like “Good Luck Chuck” or “My Best Friend’s Girl” that didn’t necessarily blow the doors off theatrically outperform relative to the box office on digital in a significant fashion. I think there’s a lot in that R-rated comedy area where we’ve seen tremendous success, both in homevideo and on digital.

Horror always does well on homevideo and the same on digital.

BF: But is there anything that does better on digital than traditional homevideo?

CM: Definitely the R-rated uncensored versions of comedies and even action movies. I would say there’s a few cases where it may do better digitally.

One interesting thing you find about digital is placement is so huge in terms of the performance of a title. That’s true at retail too – obviously you want an endcap at Wal-Mart or wherever it is. But an interesting thing that maybe somebody will figure out – we didn’t do it at CinemaNow and I haven’t seen anybody do it yet – is I still make the argument that browsability is still superior in the retail environment than online.

We found it’s amazing people watch what’s either on the home page or the first page of the specific genre or category they go to. Very few people start to click through pages. If you go into a Blockbuster or Best Buy it’s actually much easier to take a broad swath and look over and go, “You know, I haven’t seen ‘Chinatown,’ I’m going to buy that movie.”

BF: So you think there’s still a lot of work to be done on user interfaces?

CM: Yeah, honestly I don’t know the best way to do it, but somebody’s got to figure out a more effective way to – Netflix has done a great job of it through the collaborative filtering and personalization. There’s still I think, just like Google came up with a simple way to search, somebody’s got to come up with a simple way to browse a movie library in a more effective fashion.

BF: In terms of the online digital distributors, who do you see doing really well? iTunes? The video game consoles? Amazon? Is there anybody you’ve been particularly impressed by or anyone who hasn’t done as well as you thought?

When it comes to digital media in Hollywood, Curt Marvis is one of the most senior veterans around. The co-founder of online movie retailer CinemaNow all the way back in 1999, he saw the dot-com economy boom and bust in Hollywood and lived to tell about it. For nearly a decade, he served as CEO and kept his company alive in a battle against the studio-backed Movielink, waiting for the day when broadband would spread and business models would relax in order to make the Internet the distribution mode of choice for home entertainment. (CinemaNow was acquired by Sonic Solutions in November for $3 million)

That day still isn’t quite here, but Marvis is continuing to bring it closer, now on the studio side. Last April he joined Lionsgate, a major investor in CinemaNow, as its first president of digital media, overseeing all of the mid-sized studio’s efforts on new digital platforms.

Last week, Marvis spoke to Technotainment editor Ben Fritz about his role at Lionsgate, his experience at CinemaNow, and where he sees sees the digital economy going for Hollywood in the future.

In this first of three parts, Marvis explains how he has come to define his position, the importance of online sales and rentals in the overall revenue for some Lionsgate movies, and his surprise at where digital distribution stands now compared to 10 years ago.

Ben Fritz: Tell me about your job. Is it overseeing anything and everything that Liongsate does digitally?

Curt Marvis: Basically I got this job with a piece of paper and I drew “digital media” in the middle in a circle and drew arrows out to theatrical, television, home entertainment, even music – we have a music group, which a lot of people don’t realize – corporate development, business development, channel business and then investor/financial community. And I listed in each of those all the different things that I could imagine were happening in those different departments that I knew within Lionsgate didn’t really have a lot of glue or communication between the groups. To use the overused term: Synergies between the various groups.

So I basically came in to Jon Feltheimer, the CEO, and said, “Look, if I came in here, this is what I would” – Because I had been at CinemaNow and I had reached a point where I was… They couldn’t pay me any more money. I could get stock that at that point was looking like it wasn’t necessarily going to be worth a lot of money. I started the company and I didn’t have the fire in my belly to keep going. So as an entrepreneur there was a point at which I said I’ve got to get in something new. So I came here and drew that out for him and said, “Here’s the things I think we need to be looking at in home entertainment, here’s a list of 20 things, etc.” He said, “Exactly, that’s what we want somebody to do” and by the end of the moment it was, “When do you start?”

So effectively what my job is is interfacing with all those groups on a multitude of challenges, problems, opportunities that exist within each one of those departments. What I’m least involved in really is theatrical and that’s because the one thing that I don’t do within the company is deal with the theatrical marketing or the homevideo marketing. I don’t go into the theatrical marketing people and say, “Hey, I think you should do pop-up ads on Yahoo Movies.”

BF: So it’s not the marketing, it’s the distribution?

CM: Basically you could say, if it’s not revenue-generating, I’m probably not involved in it. So in the home entertainment group, for example, I get involved in everything from shifting windows, pricing issues, iTunes stuff, everything moving from the packaged goods business to the digital world. In the television world we just made an announcement today about a format we licensed from Spain called “Instantly Rich” that we’re going to be taking out to the networks. It’s driven by SMS. It’s a show that I brought into the company from our relationship with Zed.

 We also are doing things with “Weed” and “Mad Men.” And also we work with the TV Guide Network (which Lionsgate just acquired) and TVGuide.com in terms of cross-platform programming for television.

On the music side, mainly I’m dealing with getting those tracks out with ringtones and other things.

Then on the corporate channel side, because of Epix, which is the movie service we’re launching with Viacom, Paramount, and MGM. We have FearNet which is our all-horror VOD service. We have a large stake in Break.com. All of those businesses have their own management teams. I’m not in charge of those businesses by any means. But I’m an interface in the company.