I Want My (Web) MTV

Mika Salmi's band of adrenaline-drunk buddies were all thinking the same thing: "Now what, Mika?" On a thrill-seeking sojourn from MTV Networks—where he oversees the cable programmer's sprawling digital realm—Salmi had escorted eight of his Silicon Valley compatriots into the remote Canadian backcountry for some extreme skiing. While soaring off a frighteningly steep slope, Salmi had lost one of his skis midair, and it disappeared into the deep powder. Without the ski, how could he possibly guide them back to civilization? The group worried as they fruitlessly searched for the equipment. But Salmi had been in scarier predicaments before—alone, no less—on mountain treks and while surfing. He'd always come through unscathed, and would again this day. "On one ski, he proceeded to ski about eight kilometers [five miles] down the mountain—and better than any of us on two skis," recalls Richard Barton, a longtime friend of Mika Salmi, is founder of Expedia.com and currently CEO of Zillow.com. "He's a tenacious guy who's always pushing the edge. He picks himself up and moves on and gets it done."

It's that flair for adventure and inventiveness that captured the attention of top executives of Viacom's MTV Networks, who in 2006 tapped Salmi to become the company's Internet czar. Worse than losing a ski in the snow, MTV Networks had lost its footing in the midst of a paradigm shift in media and entertainment. The arrival of broadband video was changing the nature of entertainment, but MTV Networks, which includes, among other channels, VH1, Comedy Central, Nickelodeon and the flagship MTV outlet, had suddenly found itself lagging. It was a humiliating predicament. MTV Networks, which for years had been the arbiter of youth culture, seemed to be squandering its birthright: even as its core audience was embracing the Internet as the next entertainment medium, MTV could not shake its old-media image. But under the guidance of Salmi, 42, a Web video pioneer who got his start in the 1990s before most people knew what streaming media and digital downloads were, MTV Networks is now beginning to take hefty bytes of the Internet business.

MTV and its sibling brands now have more than 300 sites, including some 30 media-rich broadband sites that boast video, music and lots of interactivity. And they have captured an impressive amount of traffic: Nickelodeon alone logged 1.4 billion video streams last year. MTV Networks' Internet sites attracted 90 million unique visitors worldwide in December 2007, up from 76 million the previous year, according to comScore. But the digital empire Salmi is helping to expand and turbocharge goes way beyond streaming video. MTV is now a leading creator of online virtual worlds like Neopets.com, where users' avatars can interact with virtual pets, and Pimp My Ride (named after the popular MTV show), where avatars can customize cars. MTV has also become a major player in videogaming, which is now the hottest category in all entertainment. It owns the leading casual-games site, AddictingGames.com, where simple card games, puzzles and the like can be played free of charge, and has one of the industry's hottest games—the cultural phenom Rock Band: for those of you who are videogame Luddites, Rock Band lets you and up to three friends become a "virtual" band, using video controllers that look like instruments to play along with songs you download from the Internet. Introduced in November by MTV-owned game developer Harmonix, which also created the hit Guitar Hero, Rock Band has sold a remarkable 1.8 million units, as well as 6 million downloaded songs. Fueled by Rock Band, Viacom Media Networks posted $1.1 billion in worldwide "ancillary" revenues in 2007, a figure that includes royalties earned from MTV-owned videogames.

The strategy encompasses more than just the online sites of the branded cable networks. Sites are spawning for actual shows, such as TheDailyShow.com and SouthParkStudios.com, which launched just last week. Still other sites are wholly unrelated to television shows and branded networks, but simply address the interests of the core audience. Nor do you have to go exclusively to MTV Networks' sites to access their content: a rapidly growing number of third-party sites, including Yahoo and iTunes, offer MTV content under syndication deals (that longtime staple of old media). Users themselves can even distribute MTV clips, with MTV-provided tools that let them embed video into e-mails, on their Facebook or MySpace page, or on blogs. The company also distributes MTV and affiliated brands through 80 mobile carriers worldwide. "Freeing the content so that it is accessible from more than just your own site is critical—with Viacom a leader in that respect among its peers," says media analyst Richard Greenfield of Pali Capital, who calls the approach "a key to Viacom's growing success." For Salmi, it's all about capturing eyes in a world of media fragmentation. "We need to make sure our content is everywhere our audiences are … to keep our brands relevant," he says.

Advertisers have embraced MTV's method, because it allows them to reach keenly targeted demographic groups. "It's a clear indication that they are looking at the business from a consumer's perspective," says James Kiernan, digital director for MediaVest, which placed client P&G's Secret deodorant brand in Virtual Laguna, a site based on MTV's hit show "Laguna Beach," to reach young women.

For his part, Salmi merely sees the strategy as a logical next step in MTV's ongoing evolution. MTV "has reinvented itself so many times," he says, noting the flagship channel's shift from music videos to reality series, and its splintering into offshoot channels like MTV2 and mtvU. Whether it's evolution or revolution, Salmi's boss appreciates the results. "It was a television-led company," says Judy McGrath, MTV's CEO. "He took the pieces and made them add up to something greater." From a financial standpoint—the measure that really counts—"we had a fantastic year," McGrath says.