The Hollywood Reporter had an article about NBC Universal, a unit of General Electric (NYSE: GE). It seems that the powers-that-be at NBC are bullish on cable television, to the degree that they believe it warrants its own structure. To that end, execs have decided to separate cable production from the broadcast network. NBC Universal Cable Studio, to be overseen by Bonnie Hammer (who now sports the title of president, cable entertainment and cable studio), will take care of content decisions at popular channels such as USA and the Sci Fi Channel (memo to Hammer: I am a huge fan of Doctor Who, don't ever cancel it).
A move like this might be understandable. The action on television these days definitely can be found on the cable outlets. How can you not like their model? The programming tends to be cheaper, there are reality shows everywhere, and content can be repeated to an ad nauseam degree a lot easier than it can be on a major network. Consider Viacom's (NYSE: VIA) MTV and VH1 -- if I miss that Celebrity Fit show on Thursdays, I have a good chance of catching it on some other evening. In fact, I'm sure we've all noticed that networks are starting to behave like cable outlets these days -- there's a good reason for it. Cable is important economic drivers for all media companies, including Disney (NYSE: DIS), News Corp. (NYSE: NWS), and Time Warner (NYSE: TWX). Plus, they are great incubators for ideas that can spread to other platforms.
At the same time, though, I would hope this strategy doesn't inhibit synergy between the broadacast network and the cable assets. A split, to me at least, would seem to mean that this negative aspect might be in the cards. Plus, will costs rise as a result? Was a unified television studio structure so bad? There are always politics at work in these kinds of situations. As the Reporter article mentioned, this new production paradigm testifies to the influence of the cable networks, and it obviously shows that Hammer's executive brand equity is on the rise.
I'm a GE shareholder, and I like the NBC Universal asset. I want it to be a major driver going forward -- I think it will be -- but I hope NBC will always ensure that efficient synergies are top priority. Hopefully this move won't add to the cost structure.
Disclosure: I own shares of Disney and General Electric; positions can change at any time.
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Reader Comments (Page 1 of 1)
3-26-2008 @ 11:05AM
Joyce L Williams said...
you know, no one's going to blem users of the market to advance at this kellogg stage of the game. the moratorium advancement is to stay hold at a steady gain and sell at a bottom fair staged momentum. i say the momentum is right after the fair manipulation plays into high gear at the stoplight. initiative once, and stalmate last.