NBC’s Seismic, Shifting TV Economics
March 26, 2008 12:39 PM
I was more than surprised to see that NBC Universal chieftain Jeff Zucker told the Los Angeles Times that its USA Network is “probably the single most important entity within the entire portfolio.”
That’s a wow moment. According to this article, USA, cable’s highest-rated network, posted profits of $700 million last year, compared to NBC, which posted profits of about $300 million.
Who could have predicted a cable network would ever surpass a well-established broadcast network?
The economics of a cable network’s dual revenue streams—fees from distributors that carry their shows plus the additional pop of national advertising sales—are making a major impact. I wouldn’t be surprised to soon read that other popular cable nets are surpassing other broadcast networks.
That’s a stunning fact, especially when you toss in the fact that USA also has eclipsed The CW broadcast network in viewership for the first time this quarter.
More startling, perhaps, is that NBC is selling two of its owned-and-operated television stations, WTVJ-TV in Miami and WVIT-TV in Hartford, Conn.
Not that long ago, broadcast O&Os were the cash cows for large media companies, often spinning off profits margins of 50%.
More evidence, I say, that the mass-market broadcast model is officially dead.