SCOUTING NEW TURF WITH NBC, MICROSOFT: ONE ON ONE: WRIGHT INTO CABLE, UPFRONT;WRIGHT SEES HEALTHY UPFRONT, FEW RIVALS FOR NEW CABLE NET

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NBC's on top of the world right now-No. 1 in prime-time TV and about to launch, with Microsoft Corp., a 24-hour cable news service called MSNBC. The architect of the company's business plan for the last decade has been NBC President Robert Wright, 53, who was interviewed by Media Editor Chuck Ross.

How do you assess the looming competition-Rupert Murdoch, ABC-for MSNBC?

Robert Wright: There is no obvious reason for ABC to want to do this. They are going to lose a lot of money. I can think of four or five different services that [Walt] Disney [Co.] and ABC could launch that would be a fraction of the cost of a competitive news service in this environment at the level we're talking about.

I would forecast that ... when they get a hard look at the depth of this loss, they'll decide there are other, more attractive outlets for them for programming-no matter what they're saying now and no matter what people feel.

AA: What type of outlets?

Mr. Wright: They are an entertainment company. ... We are not an entertainment company in the sense that we don't have libraries like that.

Our primary focus in producing is news and information. We're going with our strength. ... If I had 3,500 films in a library, we would probably be offering an entertainment service by now. It would quite frankly be a good deal cheaper and have a much sooner break even than a news and information service.

AA: If it doesn't make sense for ABC to do a news channel, financially, why does it make sense for NBC?

Mr. Wright: It is the guts of what we have. And Microsoft brings a lot to the table.

AA: Are affiliates going to be offered equity?

Mr. Wright: There is an opportunity to do that, but I don't think very many affiliates will be pursuing that.

It's expensive, and I think most of them will feel they can get more direct benefits by using their funds and their resources on-air and have an association with the signal locally. That's probably got a faster, more direct return, and a more direct local benefit for them.

AA: How are you going to get the local affiliate to participate with local commercials?

Mr. Wright: The affiliate has to have a connection to the cable operator's headend so they can feed the local piece into the signal. The signal will come into the cable operator's headend and the affili-ate has to put his feed in.

AA: Is that feasible in a market like Los Angeles, where there are more than 30 cable operators?

Mr. Wright: Most larger markets have their own interconnects for the purposes of dealing with their own advertising issues, so I would think those would be adequate for this purpose. And most NBC affiliates have established some kind of a hard-wire linkage to the key cable operator's headends.

So from their standpoint this probably isn't an issue, unless the capacity they have is not sufficient to feed both their signal and another feed. That's a case-by-case issue.

AA: When will MSNBC be launched?

Mr. Wright: The first or second week in July.

AA: We're just about at the upfront selling period for the 1996-97 TV season. Are estimates correct that price increases won't be as much as last year?

Mr. Wright: There's every reason for every advertiser to say that. Last year was an exceptional year, although the market is pretty strong right now.

There is every reason to believe it will be a healthy upfront. I would be very, very surprised if it wasn't extremely strong.

AA: As strong as last year?

Mr. Wright: It doesn't have to be.

AA: NBC has been in the No. 1 prime-time position before, but fell from the top spot. Did you stay too long with your hits the last time?

Mr. Wright: Well, the real reason we slid is that we weren't able to develop new shows that the audience fell in love with fast enough. And we weren't able to get the new shows on the air when the aging hits were still hits. When we started to develop new shows, we didn't have the platforms to promote them.

AA: What's the weakness in your schedule now?

Mr. Wright: Saturday is our most difficult program challenge. ... CBS currently is having the best success on Saturday, and I doubt seriously if they are making any money.

It's a very difficult evening. The HUTs [households using TVs] are low and the competition is fierce. There is an awful lot of pay cable watched and an awful lot of home video.

So it requires a breakthrough thought process here of some type. We are trying to come up with that .*.*. between now and the time we announce the schedule. That's clearly the biggest fundamental challenge.

AA: What other holes are you trying to fill in the schedule?

Mr. Wright: In every night there are things you want to do. Fundamentally, what we are looking for are new breakout shows, whether dramas or comedies. We have wonderful places to put them now where they can be seen and actively promoted.

That's a fun thing to do. When you don't have any hits, that's not a lot of fun.

AA: You have a deal with Procter & Gamble Co. and Paramount that gives NBC a first look at programming developed by their joint venture. We heard that NBC passed on the deal at first, but changed its mind when Disney bought ABC. Take us through the deal.

Mr. Wright: It's early in the cycle. There hasn't been very much done that can determine how successful it will be.

Paramount was interested in spreading out its risk on network TV production to conserve its cash, and P&G was interested in extending its interest in TV production as a way of potentially getting more reach for its advertising. Our issue was wanting to be in business with people that we felt we could be in business with for a long time.

So everybody had a real different view as to why they got into this. We really didn't need the money.

But we did feel that we've enjoyed great success with Paramount for a long time; this is something they wanted to do, and since we've had so much success with them we felt it was a good opportunity for us to invest in programming that realistically we will be very proud to air.

It's three different interests and we'll see in two to three years how well we've done.

AA: We had heard that one of the things important to NBC was P&G's commitment to advertising on your international properties. Was that a part of what made the deal happen?

Mr. Wright: P&G's commitment to be involved in advertising in Asia and Europe was certainly very helpful to get this deal signed. But it didn't drive it.

A discussion was ongoing with P&G apart from it.

It seemed like a good idea to include them both at the same time, and we were able to do that.

AA: Michael Jordan, the chairman-CEO of Westinghouse, the new owner of CBS, said in a speech recently he wants that network to deal more directly with advertisers. Is that something NBC would like to do?

Mr. Wright: We would always like to do that. The difficulty is that the TV advertisers rely quite heavily on ad agencies to help them develop and implement their marketing plans. People often think that the agency is somehow a block, and if we can get rid of the agency we'd be much better off dealing directly with the advertiser. I don't believe that's the case.

The reality is that if you try and deal with an advertiser directly, you're going to end up dealing with an agency because the planning, the account people, a lot of the promotion ideas are agency driven and implemented.

A number of years ago we set up a large organization to try and deal with advertisers directly, and coordinate with agencies. It proved to be not as effective as I had thought because, in the end, we were making trips to the advertisers with the agencies.

I don't think you can bypass the agencies. If you feel you have a message to deliver to the client, and you don't feel you are getting through with the agency, then you should deliver it. But that's a rare situation.

AA: Where are the networks now with the discussions on program ratings?

Mr. Wright: The object is to provide young parents with an opportunity to be more informed about what programs young children are watching in their absence. Unfortunately, there are a number of people who talk about ratings whose real agenda is that they want to have certain programs not be aired and certain other programs to be aired in their place.

They are not really interested in ratings. They are interested in having programs taken off, changed and replaced with programs "I" like. And they are not even focused on the children's issue. That is not a crowd we are attempting to deal with here, because that essentially is censorship. ... If, in the end ... there is a demand that we block out shows for adults and so forth, then I think we are going to end up in court for years.

AA: Are you concerned that advertisers will just stay out of certain rated shows and stop judging shows on an episode-by-episode basis?

Mr. Wright: I don't see that as much of an issue. The [program] ratings system, in fact, will make it easier for advertisers to be comfortable with network television. If anything, they will have a national support system in the ratings structure.

AA: Neil Braun, president of NBC TV Network, has been a vocal critic of Nielsen and has asked Statistical Research Inc. for a business plan for a competing service. Where are you now with that situation?

Mr. Wright: There is a high level of dissatisfaction with Nielsen's ability to respond quickly and thoroughly to programmers' concerns...When you're a monopoly you have to learn to field all of those concerns....They are breaking up Dun & Bradstreet; they are going to have this new company that will be showcasing Nielsen.

I hope that will make the new corporation more ready to try to react positively to... the concerns.

In the meantime, we don't think we have any choice but to support the development of alternative technology.

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