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Snapchat still appeals to media companies looking to find young audiences for their content, but it can be hard to make money there. Publishers that have editions on Snapchat’s 3-year-old Discover section have complained about the difficulty selling ads there; CNN pulled the plug on its news show, “The Update,” last year after four months.

Top partner NBCUniversal (also a Snap investor) won’t discuss profitability, but said it’s making “real money” on the app, including tens of millions from its Olympics-related content and more than a million dollars from E!’s “The Rundown,” its first show. Aside from the fact that NBCU sells the ads itself, a key to its results is that it develops the shows centrally from the NBCU Digital Content Lab, a group that NBCU formed a year ago to fuel its broad partnership with the app. The lab, which ranges from 12 to 30 people depending on production needs, develops Discover content based on existing NBCU shows and original concepts and is an outlier among Snapchat partners in taking this centralized approach.

In September 2016, NBCU launched its first original Discover show, “The Rundown,” a lighthearted take on big pop culture stories. It wanted to do more, but realized that hiring Snapchat teams for each individual network would easily run up to 100 people.

“We realized it really is a different skill set than to produce a TV show, so we realized we should build out a studio,” said Maggie Suniewick, president of NBCU Digital Enterprises, who manages NBCU’s digital partnerships and investments.

Bryce Kristensen, a vp at E! who had been handling its relationships with social platforms, was named head of the lab. He hired a staff of development managers, editors and producers who were specialists in taking the DNA and raw material from E!, Oxygen, Bravo, NBC News and the like and translating them into the specific kind of content Snapchat wanted, with the right tone, pacing and graphics. (“You only have one shot with this audience,” Kristensen said.) A dedicated NBCU partnerships sales team sells ads for the content that the lab produces.

Having the ability to draft off existing brands and their video and photo output makes producing these shows efficient. At the lower end, episodes of “The Rundown” cost a thrifty $10,000 each; at 4 million views per episode in March, that’s under a penny a view. “If we didn’t have this group, these Snapchat shows would cost a lot more,” said John Najarian, evp and gm of E news and digital, who oversees Kristensen’s team. (A couple shows like “The Voice on Snapchat” and “The Rundown” have their own staffs, but the lab still advises on them.)

As it built its relationship with Snapchat, NBCU also saw the lab as a way to limit the number of people Snapchat dealt with from the media company.

The lab is part of an expansive relationship between NBCU and Snapchat. In 2016, NBCU was the first media partner to make a Snapchat “show,” the app’s attempt at a TV-like format for Discover. The result, “The Voice on Snapchat,” an adaptation of the NBC singing competition “The Voice,” was nominated for an Emmy. In 2017, NBCU invested $500 million in Snap as part of its initial public offering. In the fall of that year, NBCU and Snap announced they would co-create a digital studio in Santa Monica, California, separate from Kristensen’s team, to make more original Snapchat shows. Today, NBCU is Snapchat’s biggest producer of shows.

NBCU saw that audiences are leaving TV in droves, so it bet big on Snapchat, said Nick Cicero, CEO of Delmondo, which provides Snapchat analytics to Discover publishers. But media companies have gone from viewing social media as a place to promote their existing content to using it to launch entirely new programming, where the costs are lower.

“If we were going to launch the next ‘Friends,’ maybe it could be on Snapchat; ‘Stay Tuned’ could be their next cable franchise,” he said.

Like any platform, Snap’s relationship with publishers has its ups and downs. Some say Snapchat’s curated approach is good for established publishers. But the relationship has been strained, as some publishers say it’s hard to make money on their content there and Snapchat’s recent redesign has negatively affected their traffic.

NBCU insists that it values its relationship with Snapchat, but it doesn’t just want to churn out shows based on existing series and just for Snapchat; it also wants to incubate brand-new shows that start on places like Instagram, Facebook and YouTube, and could make their way to TV one day.

Today, roughly two-thirds of the lab’s output is tied to existing shows in the NBCU portfolio. The goal is to shift that balance in favor of more original concepts, like “The Rundown”; “Face Forward,” a beauty makeover show; and the forthcoming “How Far Will You Go,” which could be described as game show-meets-“Jackass: The Movie.” The World Cup this summer, with its global, bilingual appeal, will be the ideal showcase for this expansive approach; NBCU will produce World Cup shows that run across Instagram, Snapchat and Facebook.

“The ultimate plan is, we’re creating new IP,” Suniewick said. “Snap is unique, but with shows that make sense, we’ll expand to other platforms as well.” “‘Comedians in Cars [Getting Coffee]’ started as a digital show,” Kristensen said hopefully. “Maybe we could start something that a network would want.”

The post How NBCU’s specialized unit makes shows for Snapchat and beyond appeared first on Digiday.