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Peacock gets wired

Nov 12, 2001  •  Post A Comment

For many years, Tom Rogers-working closely with Bob Wright-was the architect of NBC’s cable TV strategy. Mr. Rogers, now chairman and CEO of Primedia, recently was interviewed by Electronic Media editor Chuck Ross about those heady days.
Tom Rogers: The first major piece of business we did when I got to NBC was spend a lot of time with Ted Turner. This would have been 1987. He was looking for a strategic partner and some financing to help him out of the bind he was in relative to his cable operator owners. We had extensive conversations about merging NBC News with CNN both on the domestic and international fronts.
EM: But there was a problem over control, right?
Mr. Rogers: That’s right. There was a lot of concern about being able to control our destiny and [joining forces with] Turner was not as clean a path to controlling our destiny and owning services directly in our own right. So we passed. If we had done that, it probably would have changed very much the course that NBC took. Unfortunately, our initial course was one that was marred by a lot of distrust on the part of a cable industry about a broadcast player getting into the cable business.
EM: So then you made a deal with John Malone and TCI for Tempo, which you used to create CNBC.
Mr. Rogers: With our TCI deal we got CNBC to 18 [million] to 20 million subscribers, which had put a lot pressure on the major cable financial news service at the time, FNN. They were having some real difficulties, and the added pressure of having another financial news service out there with 20 million subs put them into a position where they went into bankruptcy.
EM: Ironically, Dow Jones, which is a partner in CNBC, at that time partnered with Westinghouse to try to get FNN.
Mr. Rogers: They decided to bid against us in that bankruptcy. The bidding went up to $155 million.
EM: How high were you guys prepared to go?
Mr. Rogers: We never got to that issue. But once we were in it, we knew we were out to win it.
EM: Next came America’s Talking.
Mr. Rogers: Two years later and retransmission consent was going, and we said we were gonna look for some kind of currency for an additional channel, and that channel that we asked for was one that had a pretty broad mandate of talk and news and information that we called America’s Talking. Again, we got to about 20 million subs, and then we took a look at it and said, `Why not compete with CNN?’ The concern of many cable operators was that CNN was extremely valuable, but being the only satellite news service out there, the cable operators felt vulnerable that there was no competition. [GE chief] Jack Welch had some of us come up with a joint proposal for Microsoft for news on the Internet. Then Jack suggested that we explore doing general news as well on cable, so Bob and I and Andy Lack pitched Bill Gates on the notion of a news channel tied to Internet service. One of our thoughts was ultimately we’d see a video-on-demand environment down the road when things truly got interactive and that this new service would be a huge selling point for NBC relative to other news organizations, particularly CNN.
EM: I take it Bob Wright was a big help to you in formulating strategy? Before coming to NBC he headed up Cox cable for a few years.
Mr. Rogers: Bob always was very focused on the cable model. That made everybody focus on it in the organization. One of the attractions, of course, is that the cable model was so superior in terms of getting sub fees and not being totally reliant on just ad revenues like the broadcast model. Nowadays, I think there’s an entirely different culture at NBC than when I started there in the mid- to late 1980s. People at NBC now have grown up with cable at the heart of the company. And I give Bob an enormous amount of credit for our strategy of making sure you use the core assets of your company when we diversified into cable. You saw that with what we did with the news operations and CNBC and MSNBC, and you saw that when we leveraged our TV station carriage rights in retransmission to build cable distribution.