Broadcom and Gotcha Launch Media Firm

Angling for the hearts and wallets of “Generation Y,” Southern California’s hottest computer-chip maker and one of its oldest surfwear companies said Sunday they have formed a new-media company combining “Jetsons”-style technology and extreme sports.

Broadband Interactive Group--Big for short--combines Broadcom Corp.’s technology with upstart media ventures spun off from Gotcha International. They include three magazines, a Web site and an extreme-sports show on Fox Sports West.

Terms of the deal were not disclosed. Big, like Broadcom and Gotcha, will be based in Irvine.

Broadcom’s newest chips can blend Internet access seamlessly with television broadcasts. But consumers have been slow to log onto the Internet via television, both because of the sluggish rollout of service by cable companies and a lack of interactive programming.

Big is aiming for the “creation of next-generation interactive content,” said Broadcom Chief Executive Henry Nicholas. In doing so, Broadcom hopes to convince consumers to sign up for Internet service, cable companies to speed up the sale of such services and digital set-up box makers to buy Broadcom chips.

Built around so-called extreme sports such as surfing and snowboarding, the programming could offer, for example, live Internet coverage of motocross, instant televised sports replays and statistics on demand or the ability to book a trip to Tahiti with a mouse click while you watch a surfing contest in the South Pacific.

“We’ve identified an opportunity to create a new-media powerhouse,” he said.

The action-driven 10-to-24-year-olds who represent Big’s target audience already are Internet-savvy, said Matt Jacobsen, Big’s chief executive. The company plans to develop information and entertainment aimed at other demographic groups as well.

Nicholas believes that such new-media ventures will change society even more than the introduction of radio or television. He says the day will soon come when companies like Big will be able to use electronic commerce to advertise and sell products directly to consumers via their television.

So far, the sophisticated Broadcom chips capable of handling this new-wave blend of Internet and TV are in tens of thousands of set-top boxes in consumers’ homes. Through Big, Broadcom hopes to get those numbers to multiply as quickly as possible.

“Rather than have the industry wait two or three years for there to be 5 million or 10 million of the boxes in homes, we’re developing the content now,” Nicholas said. “What we want to see is in the tens of millions.”

He hopes to follow the same path the cable industry traversed in its infancy, when TCI’s John Malone bought a major stake in Turner Broadcasting, enabling the growth of Ted Turner’s empire. Programs on those systems gave viewers reason to demand the cable boxes that Nicholas now wants to replace with his digital devices.

Nicholas hatched the idea for Big with Gotcha International owner Marvin Winkler, who also is his next-door neighbor.

Winkler formed Gotcha’s fledgling media business over the past year, buying three giveaway magazines focused on board sports and producing the “Surf the Planet” television show for Fox. Those operations, along with the company’s new sponsorship of one of surfing’s biggest contests, are tied into the Gotcha.com Web site.

Broadcom, Gotcha, Winkler, Nicholas and Broadcom co-founder Henry Samueli will own stakes in Big, which initially will employ 50 people and grow to about 100, Nicholas said.

Winkler, Samueli and Nicholas also are investors in the proposed Gotcha Glacier, an indoor snowboarding and surfing park they hope to build next to Edison Field in Anaheim. The $105-million project would provide more extreme-sports fodder for Big’s new-media programming. Winkler, the Glacier’s chief promoter, hopes to raise $100 million in a bond sale this fall to fund the facility, which would be the first of its kind in the U.S.

Nicholas had tried to assemble a group of investors to buy baseball’s Angels and hockey’s Mighty Ducks from the Walt Disney Co., hoping to get still more interactive programming from the teams. But any deal with Disney is on the back burner, he said.

The idea of investing in content providers is hardly new for technology-driven companies. Semiconductor behemoth Intel Corp. has poured millions into various entertainment ventures, betting on everything from interactive TV to computer games with film-like graphics to drive sales of its chips.

Big CEO Jacobsen, a former executive at Rupert Murdoch’s News Corp., said Big plans to grow by acquiring other new-media ventures as well as starting new ones.

Winkler said Big has had discussions with “Ally McBeal” creator David E. Kelley, who has expressed interest in producing TV shows with interactive features. Big also is expected to expand its programming on Fox.

Big’s executives hope that staging events, sponsoring athletes and giving enthusiasts a forum in chat rooms and magazine columns will keep the company close to the fickle fancies and anticommercialism of the extreme-sports crowd.

Broadcom’s Rise

How the company’s stock has fared since it was first offered in April 1998. Weekly closes and latest:

Friday: $112.50

Source: Bridge News