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Jeff Zucker Does the Math for 8 O'Clock

And Answers Other Questions About NBCU's Re-org

By Published on .

NEW YORK (AdAge.com) -- NBC Universal is retooling for the digital age, and it needs to find cost savings of $750 million by 2008. Its initiative, which it titled "NBCU 2.0," aims to take advantage of emerging and web-media opportunities. A first step toward that goal was eliminating approximately 700 jobs across the company's news, entertainment and movie divisions. NBC Universal Television Group CEO Jeff Zucker talked to MediaWork's Claire Atkinson following a town-hall-style meeting where he laid out the plans for employees.
Jeff Zucker
Jeff Zucker Credit: AP

MediaWorks: If the 2.0 plan works, what will NBCU look like five years from now?

Jeff Zucker:That's a great question. I think we look like a company that is properly positioned for the digital era.

MediaWorks: How will you be distributing content in ways that you aren't currently?

Mr. Zucker: That is a somewhat impossible question. That's the whole point -- we need to be positioned so that we are ready to distribute things in ways that you can't even envision today. Already we're doing things in ways that four months ago would have been unthinkable. "Heroes," the biggest new show of the year, aired Monday night at 9 p.m. By 2 a.m. it was available at NBC.com with commercials, and at noon the next day at iTunes for people to download for 99 cents without commercials, and it's going to air on the Sci-Fi channel at 7 p.m. Four months ago the immediate exploitation of a show would have been unthinkable.

MediaWorks: How big is social networking going to be in 2007?

Mr. Zucker: Social networking is clearly very much a part of the experience today for consumers and it's something we are working on with each of our own properties. The two best examples are what's going on at Bravo and at iVillage, which was a big, big investment for us this year.

MediaWorks: You have said that NBC won't continue to program dramas and comedies in the 8 p.m. hour. Why the decision to change that genre?

Mr. Zucker: We're going to continue to deliver three hours of quality programming every night. The question is, from a viewer standpoint and from a cost standpoint we need to look closely at what we're doing at 8 p.m. Viewers are clearly telling us something about what they want to watch at 8 p.m. It's no accident that the biggest shows are "Deal or No Deal," "Dancing with the Stars," "Survivor" and "1 Versus 100."

Clearly, "American Idol" will be part of that. It's no accident that those viewers are watching in a major way, and, furthermore, because of the increasing cost of programming and marketing costs that are attendant to all programming these days, we have to make choices.

There's a big difference between a program that costs a million dollars and a one-hour, first-year drama that costs $2.7 million -- and the viewers are going to the one that costs a million bucks. You can't ignore that. We're not going to get out of the scripted business but we're going to take a much closer look at whether it belongs in the 8 p.m. time period. For instance, we're not getting out on Thursday night where "Earl" and "The Office" continue to perform very well for us at 8 p.m. It is just articulating a strategy that we are evolving through, anyway. The fact is "Deal or No Deal," and "1 Versus 100" are airing three nights a week at 8 p.m. so we are basically there, anyway.

MediaWorks: What about "30 Rock" and "20 Good Years"?

Mr. Zucker: They would continue to be on air, they just wouldn't be on at 8 p.m., that's all.

MediaWorks: So when would this begin? You're obviously in development now.

Mr. Zucker: Yes, this is an '07 strategy.

MediaWorks: Cost savings might be directed toward digital operations, to the tune of around $150 million. Can you tell us where those savings would go?

Mr. Zucker: We've made a tremendous amount of investment in converting "Today" show and WNBC to high definition, and so we've committed quite a bit of money to upgrading every one of our online sites. We are investing in that world and that's where we're going to continue to invest our money. We've just launched a syndicated unit, called the National Broadband Co. These are the moves that you'll see more of.

MediaWorks: Have programming costs risen over the last few years?

Mr. Zucker: Of course our programming costs are going up.

MediaWorks: Will you be cutting marketing costs too?

Mr. Zucker: Not really, but you have to acknowledge those costs are going up too.

MediaWorks: What can you tell us about CNBC's plan to run an online subscription business?

Mr. Zucker: We're going to launch that in the next few weeks, but I'll let them make their own announcement.

MediaWorks: MSNBC, how is it going to look different?

Mr. Zucker: Nothing is going to look different, the only thing that's going to be different is the address where people are going to work.

MediaWorks: What's the biggest source of your digital revenue right now?

Mr. Zucker: IVillage and MSNBC.com are major players.

MediaWorks: Some might read this announcement and say the broadcast ad model is broken and it's outmoded.

Mr. Zucker: That would be a complete misreading of the situation. The broadcasting business continues to be very strong, and we believe in it very much, but we also have to be cognizant of the fact that costs are going up and we need to get control of them.
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