General Electric's (NYSE: GE) NBC is really feeling the heat of the recession. NBC Universal CEO Jeff Zucker thinks that reducing the number of primetime hours on the network should be considered a viable option for controlling costs and for adjusting to the current media landscape that seems to favor cable networks over traditional broadcasting entities like Disney's (NYSE: DIS) ABC and CBS (NYSE: CBS). He also speculates that reducing the actual number of days that the network programs may be necessary at some point.
I find all this very amusing. I think what Zucker is essentially saying is that NBC needs to think more like a cable network. I would agree, and have argued for this before. Let's face it, the broadcast networks are dinosaurs in many ways. They just can't compete in a world where cable channels are popular and are constantly repeating cheaply produced shows to keep costs at a sane level. Take Viacom's (NYSE: VIA) MTV as an example. How many times have there been marathons of The Real World? Likewise, if you come in late on an episode of Celebrity Rehab, you know you'll have other opportunities to catch the whole thing at another time. Not only is that time-shifting model convenient, it saves money, too.
This is how NBC should think. Sure, it'd be a culture shock, but what if hits like Heroes and 30 Rock were repeated a few times in a single week? That presents a problem, of course. The talent and production companies behind those shows would demand extra compensation. Well, that's where Zucker should come in. He needs to go to the Hollywood community and tell them that things just aren't working out these days for the network. Zucker has to be staunch and let everyone know what a bind NBC is in and that, for everyone's sake, license fees should better reflect the current reality. The networks have experimented with repeating shows during the week, but not to the extent I'd like to see. I mean, really, does Saturday Night Live only have to be seen on Saturday Night?
You see, the networks don't have much leverage unless escalating costs for scripted programming can be brought down. That's why Zucker is throwing his hands up and talking about radical changes. None of this would be at the table if Hollywood wasn't so arrogant. You think there was greed in the subprime-mortgage market? Try reviewing deals in Tinsel Town. Zucker must remember that being on NBC is a valuable thing, and that exposure there can allow talent to pursue other lucrative opportunities.
In the end, though, the deal makers in Hollywood will continue to make life miserable for Zucker. I wish him the best of luck. He's going to need it, because while the major networks will always be with us, their business models are becoming more of an anachronism every day.
Disclosure: I own Disney, GE; positions can change at any time.
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Reader Comments (Page 1 of 1)
12-09-2008 @ 1:31PM
Kent said...
I'm not familiar with Jeff Zucker but the name rings a bell. Then I realized the sirname is the same as David Zucker's - creator of "Airplane", the "Naked Gun" series and finally the best spoof comedy ever made, "Top Secret" with Val Kilmer. Recent production was "American Carol" for you new-comers. The two gentlemen are not related.
12-09-2008 @ 5:07PM
tattletale said...
I may be stupid but, I feel from the info the revenue to NBC is coming from the cable services....right? Then worry about the simple boring regular NBC channel...we are not in the days of General Sarnoff nor Pat Weaver....use some sense and if necessary survey the public for their ideas.