Bruce Long describes his challenge in two words: pipelines and content.

For the last three years, National Lampoon Inc. has built distribution pipelines for its time-tested style of edgy humor. Now the company's new president must fill those pipes with laughter-inducing content.

Long, who became president on July 13, previously worked as a consultant at the company with the title of chief strategic officer, following a five-year stint at Technicolor. He now oversees National Lampoon's feature film productions, its TV network, a comedy event circuit for the college market, a Web site and a publishing division.

But according to Long, the future of the company rides on digital distribution initiatives like the firm's new broadband network called TogaTV. The company's core audience of mostly male 18- to 24-year-olds has no fear of new technology.

"Obviously, we're in many different distribution mediums and the challenge is for us to pass through the early adopter stage until the mass audience begins to reach out through digital mediums," Long said. "The comedy brand of the National Lampoon is the ideal driver to break open that new market."

Not laughing
Cracking the digital barrier looms as an ambitious goal for a company whose stock price has dropped 67 percent in the last 12 months. It currently trades on the American Stock Exchange in the $1.30 per share range. During the last four quarters, the company reported income of $3.7 million.

Investors have found little humor in the company's performance, although Long notes that trade volume is on the uptick.

"Over the next few years management has a significant opportunity to transform National Lampoon from what was until recently a passive holder of a powerful brand into an aggressive media company," wrote Eric Wold of Merriman, Curhan Ford & Co., the only investment analyst to follow the company. "Should management be successful at this, we have no doubt that the market valuation will be much more reflective of that potential."

In his June analysis, Wold downgraded the company to neutral from buy, but he still sees significant long-term potential for the stock. "NLN has been experiencing some growing pains as management strives to morph the company's operating model," he explained in an e-mail.

Long believes that with the pipeline build-out now complete, National Lampoon can focus on producing content, and this final phase of the turnaround will reward investors. "I feel that today our company is well under-valued. In the next 18 months, you'll see a dynamic emerging brand that has a wonderful legacy and heart, but truly understands the market of the future," he said.

Old college try
The transformation of the brand began in 2001 when Daniel Laikin and a group of investors bought what Laikin called a pure licensing company. National Lampoon collected residuals from long-ago successes like "Animal House" and the "Vacation" film franchise, but it had no new products or business operations. Laikin's new management set to work rebuilding the lapsed brand by acquiring an on-campus TV network, now available on more than 600 campuses.

Laikin quotes a two-year-old survey that found National Lampoon had a 96 percent brand recognition rate among college students. Also, for the last 28 years, "Animal House" has been the most-watched movie on college campuses, Laikin said.

The company's new crop of content will begin in traditional media categories like publishing and films. The company plans to release two features in the coming months: "National Lampoon's Pledge This," starring Paris Hilton, and "Van Wilder II," a sequel to the 2002 film produced under a licensing deal.

The company's publishing division has delivered its first book, "The Saddam Dump: Saddam Hussein's Trail Blog." Future titles include "Magazine Rack," a mockery of men's magazines, and "Favorite Cartoons of the 21st Century."

The new film and print ventures reach consumers directly a much easier distribution model than the company's TV and event operations, which make money entirely from advertising. For a humor company, ad dependency creates problems both in the pipelines and in the content.

Because TV and events reach the audience through colleges, the jokes must be edgy enough to satisfy students yet politically safe enough for college administrators. "We're committed to walking that fine line to bring those college students the content they associate, and hopefully will always associate, with the National Lampoon," said Long.

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