Getting NBCU on the Wright Track

Nov 8, 2004  •  Post A Comment

Robert “Bob” Wright is chairman and CEO of NBC Universal, a company he helped create in May 2004 by engineering the merger of NBC and Vivendi Universal Entertainment. It was a highlight of a career in broadcasting that began in 1986, when he first became chairman of NBC. He has overseen a transformation of the network into a global media player in broadcast and cable TV. Mr. Wright, who is also vice chairman of General Electric, was interviewed in New York by TelevisionWeek Editor Alex Ben Block and Business Editor Jay Sherman. The interview was edited for length and content.

TelevisionWeek: So far this season, NBC’s ratings appear to be a disappointment. They are down from last year. What’s going on now and what’s the future direction?

Bob Wright: You have to look at NBC Universal. It’s all about content. It’s movies, it’s television programming, it’s cable programming, it’s international distribution, it’s producing outside the United States and in. Prime time on the network is a big hunk of it-it’s very important-but it’s balanced off by lots of other activities as well. And even at NBC Network, prime time is balanced by the morning program, the `Today’ show and late-night, which are extraordinarily strong performers. We always want prime time to be a leader, if not the leader. We enjoyed so much success in the 1990s with a series of programs, but we knew it just can’t continue on forever. And bringing in replacements at exactly the right moment in time is proving to be difficult for everyone.

While we’re doing OK relative to what we’re trying to rebuild ourselves as this season, we have seen two, three programs on ABC come on, along with the continuation of the `CSI’ franchise, which CBS relies on so much-it’s been proven to be extraordinary, a phenomenon. The procedural aspect of that seems [to have audiences] willing to show up for anywhere from three to six times a week, which is quite something.

Sunday night with `Desperate Housewives’ and `Extreme Makeover,’ and Wednesday night with `Lost,’ more power to [ABC]. I mean, I wish they were all our shows, but it is great for broadcast television.

There is a uniqueness to this method of audience aggregation and delivery. It is part of the affiliate system and it is part of history and associations and expectations, and I think it’s terrific for the business. And in the case of `Desperate Housewives,’ that is a show that is very produceable. It is a show that looks like it has Lorimar [creator of `Dallas’] written all over it. You can see that’s an old friend, not something that is a concoction of program ideas that are extraordinarily hard to do. It is a bit of the audience embracing an understandable and enjoyable concept. Perhaps you can say the same thing about `CSI.’ That takes some of the pressure off of us, of having to find ideas that are so far out there that they might attract some particular aspect of the audience.

We have to get back and look at these successes and reorient ourselves. That is kind of what you do.

TVWeek: We can easily come up with a scenario in January where CBS, riding the final episodes of `Everybody Loves Raymond,’ and Fox, riding `American Idol,’ and ABC riding its success, leaves NBC fighting for fourth place. That would be very different from what you’ve faced in the past. If that happened, would you shake things up?

Mr. Wright: We have a lot of very good programming on the shelf or near completion that’s going to go on in the spring that will definitely add to what we have already. ABC on the other hand won’t have football, which is a key component to their overall prime-time ratings. And CBS will have what it has, which looks pretty strong, but is the same show. I think we’ll be in better shape as the year goes on. We had the same discussion last year at this time. We started out last year, there was a lot of woe, and we recovered very strongly as the year went on. So I am optimistic we’re going to do the same thing with shows that we have and with shows that you haven’t seen yet.

In addition, we have `The Contender,’ which we held back to get away from the disaster of the Fox boxing show and which we’re very big on. It’s a Mark Burnett show. So we have a lot more material that you haven’t seen. I think it’ll do pretty well with that.

But I think the more important issue is that [NBC Entertainment President] Kevin Reilly is now the man, this is his deal. He’s been with us for about a year, but most of last year was really working with material that he did not develop. But now it’s his. He’s a strong developer of programming, has a point of view and I think he’ll be very effective. So we’ve got to give him a chance to get in here and get going. We’ll be fine.

TVWeek: You put a ton of money into `Joey’ in terms of promotion during the Olympics. While it’s a modest success, it’s not a blockbuster success.

Mr. Wright: No. In the world we live in, `Joey’s’ a big success. In the world we live in, on expectations that `Joey’ would be `Friends’ on Day 1 and continue to look like `Friends’ and act like `Friends’ is probably not realistic. `Joey’ started out very strong. It has no lead-in. It comes at 8 o’clock. It has to develop its own lead-in, develop its own energy, and I think the writers and producers just have to find the right mix to feel comfortable that they can continue to grow that show. We like the show very much; we’re strong supporters. It’s going to be around for quite a bit of time and we probably put it in a very challenging role.

TVWeek: CNNfn will soon cease to exist. This would appear to be good news for CNBC.

Mr. Wright: They’ve been a competitor for some time, and part of that landscape. The last three or four years have been difficult from the Nielsen standpoint because the services measure at-home viewing, and a lot of business viewing is done in the office or out-of-the-home market. We have developed other ways to measure that and you don’t readily see that from the standpoint of reporting. Nielsen pops in when there’s a spike in the market. It’s a good indication of when individual investors are in the market. It’s a good indication of a volatile market. We haven’t had that in the last three years. So the Nielsen numbers are lower than you’d like.

The other problem, though, is that in the financial services there’s been a lot of consolidation in the last two or three years. So we have to go through another phase when a lot of our advertisers have consolidated, and there isn’t as much advertising money out there as there has been, say, in the Nineties.

There’s going to be a bit of a shakeout here in the marketplace. The world [has been] kind of stagnant in the last couple of years. The U.S. is doing better than the rest of the world right now. This election will probably have a positive impact on that. It already has. So I’d say we’re in a good position. We will be minus one competitor.

TVWeek: Do you anticipate any changes at CNBC?

Mr. Wright: We tried in prime time to broaden the kind of programming from business. And that’s always been a bit of a struggle. Actually we were kind of better at that about 10 years ago. But there are more channels out there today than there were 10 years ago. So [John] McEnroe and [Dennis] Miller compete at a much broader level of competition, so it’s harder to break through. We have to be very patient and we have to find the right kind of niches to do that.

TVWeek: MSNBC a few years ago was a big part of Microsoft’s plans in television. Now they seem to have gone in other directions. Any update?

Mr. Wright: We have a very good relationship with Microsoft as a whole. We’re a customer of Microsoft; we buy a lot of their products and services. The nature of our partnership was that we would take responsibility to manage and operate the television side and they would do the dot-com side. That is pretty much the way it is. And that’s always been their focus. They’re not programmers in television. Nor have they ever professed to be. Most of their activity on the screen is in games. Not in television programs as we know it. I don’t think they’ve changed tha
t. They’ve put a tremendous effort into MSN. But MSN isn’t television, either. And they put a lot of effort into managing television programming, which is the Media Center. And that is something they are very committed to. But that is a hardware and a software package of management rather than the creation and distribution of programs. Our venture doesn’t really have much to do with Media Center and the hardware-software development issue that they’re involved in.

Maybe we’ll be closer with them on programs, but I think their focus on designing programs is much more in the game area than it is in scripted or unscripted television programs.

TVWeek: MSNBC has also underperformed and faces tough competition. Do you think MSNBC needs to change or be reinvented in some way ?

Mr. Wright: I’m committed to the current direction. Rick Kaplan has brought a lot to the table. I think MSNBC is cleaner, more straightforward, more predictable and very well produced.

We’d obviously like to have a much larger share of the audience than we have today. That’s the net result of Fox being such a strong competitor and growing so rapidly, especially in the last four years. So we have to learn some lessons from that. We have to be able to expand our audience, or capture more of our audience. That’s a traditional ratings story, as you’d have in any part of television.

TVWeek: USA Network has some successes, but it has the problem in this era of being a general-entertainment network, when some of the more focused networks seem to be popping at the moment.

Mr. Wright: I think they’re just on the right program. They have a nice mix of scripted programming, they have some sports, they have some movies. We’re very fortunate to have retained Bonnie Hammer as part of the acquisition. She has overall responsibility for Sci Fi and USA. She’s worked on both over the years. She’s been the head of both over the years, and I couldn’t think of a person we’d more like to have in this role.

She has pretty strong point of view on how USA should appear and where it should be going in terms of direction. And we’re all behind her. USA’s an extremely strong performer. The shows that they developed before we came along have proven to be very effective and they have more of them, and we’re as committed to USA as we possibly could be. Making sure that the audience has a good sense of understanding of what they can expect is certainly something you want to strive for and she’s on that case.

TVWeek: One question mark is the Trio Network. It hasn’t been included in the roundup of networks that NBC Universal has embraced. Can you give us a hint of the future prospects?

Mr. Wright: Trio is just a difficult proposition because it has very modest carriage, and this is a tough time period to add carriage. We are trying to work through the issue of the expectations of Trio and its cost level against the carriage that is really available for it. We’ll reach a conclusion on that sometime in the next couple of months. Our position is to grow these networks and expand them. But we have to be realistic in the world of cable and satellite; is that a challenge we can meet? That’s what it really amounts to.

TVWeek: Paxson Communications is a difficult situation. What’s the update on that?

Mr. Wright: We’re trying to find a bridge to [Chairman] Bud [Paxson]. We’re not a common shareholder. We have a large obligation, and Paxson has a large obligation. We’re trying to find a method to satisfy Bud’s needs and our needs and probably other creditors’ [needs]. We’re working through it. It’s not quickly resolved.

TVWeek: Do you see yourself totally out of Paxson sometime in the next few years?

Mr. Wright: I don’t know. I don’t want to be. One of the difficulties with the regulatory issues is that we weren’t given permission to move ahead with Paxson, and that’s hard to undo. So we may have to look at taking a partner on or doing something of that nature.

TVWeek: There has been a lot controversy about the deal involving Jay Leno. Some people are already saying that Jay Leno will be on another network when his contract ends at NBC, that this deal was forced on Jay in order to keep Conan.

Mr. Wright: There are five years between now and that point in time-which is a long time-and who knows how the television landscape will hold out. I met with Jay two weeks ago in Los Angeles, which is a month or so after the announcement. I found Jay to be as interesting and exciting and as committed as he’s ever been and as comfortable as I can remember being with him. And I think the reality of it is that Jay is very confident in his own abilities, as we are as well.

Our challenge is to entice Jay to be a major part of NBC on a going-forward basis, whatever that means. If it only means being in that exact time slot, doing that exact show, that’s going to be an issue. But who knows where we’re going to be at that point and who knows where Jay’s comedy could be or what schedule he might feel more comfortable with in five years than he does today. Every one of those is on our agenda. So our goal is to keep Jay Leno here for as long as we possibly can, as long as he wants to be a performer on television.

The other aspect to Jay is that Jay really hated the Letterman situation, and I think Jay always felt he had the appearance of driving out David Letterman and he had a lot of respect for Letterman. He was a competitor, but he had a lot of respect for Letterman. He never liked the way that happened and he never felt it was fair that he should be blamed for that, but he always felt he was.

Jay knows very well, in my opinion, that he could go across the street if he wants in five years if we don’t give him the right opportunity. And that’s my sense. Jay comes out as a gentleman, as a guy who has a wonderful career and wonderful agreement with us. He will be attractive to other people if for whatever reason he wants to continue doing exactly that same thing in five years.

TVWeek: You’ve put a lot of money and effort into Telemundo but results have come slowly. It appears to be more difficult than it looked at first blush.

Mr. Wright: We went into Telemundo on a licensed program basis, where the programming would, by and large, be licensed from other Hispanic producers. We had some initial success but through a combination of circumstances which are just the nature of the world, that did not prove to be a lasting model. We couldn’t get the kinds of programs that we needed or felt we needed to be as competitive as we wanted to be, so we recognized after about a year of our association that we had to produce the programs we needed. And that was a very big challenge.

So we spent a year going from very modest production and some joint ventures into a full-fledged studio. And today we are a major producer of scripted programming. We produce, either alone or with partners in Hialeah [Fla.] or in Mexico City, or in another venture in Colombia, four hours a night now of scripted programming-which nobody does in the United States. And it’s doing very well. And the ratings have improved dramatically. We’re up around 40 percent from where we were before we got there. We have a lot more potential on that path. It’s a different business model. It’s a producer and distributor as opposed to a licensing program, and in the long run it should be a great benefit to us. We are getting the ratings now. We are going to stay with this model. We’re very happy about it. We’ve seen the potential. … Some of the novelas [have] generated 5-plus ratings, and from where we were that’s a big deal.

Univision is still the big horse. We know that. But we have one advantage: We’re producing original programming, and Univision is really just doing reruns of [Mexican production company Grupo Televisa]. All of its ratings come from reruns of Televisa. So we see the programs ahead of time. We know what we are. I always say to [Telemundo President James] McNamara, `How difficult can this be? You get six months’ notice of what it is you’re going to compete against.’

TVWeek: This past election marked Tom Brokaw’s last ro
undup as the primary anchor. Any thoughts on that?

Mr. Wright: Tom is going to be with us in a number of ways as we go forward. Brian [Williams’] job will be to captain `Nightly News’ and to be our captain on major events. But the way the world operates today it’s highly unlikely that they’ll ever have a major event where you’re only going to have one person. And Tom, working in the past with lots of people, from Bryant Gumbel and Jane Pauley and others, always shared those roles, because you just can’t cover everything.

And I fully expect that when we have some global issue … you’ll see Tom somewhere. Brian will be at the desk but Tom will be somewhere, and he will be as outstanding and as important as he has been for us for 38 years.

TVWeek: Speaking of changing of the guard, companies like GE have policies about retirement. You have had a great run at NBC, capped by the VUE acquisition. Would you share with us your thinking about your own career going forward and how long you want to continue to do this work?

Mr. Wright: I’m very happy doing what I’m doing. I have a big challenge in front of me personally to shepherd this integration so it’s as successful as it should be and can be. That’s going to take a bit of time.

We have a lot of things to do. We have new partners, new shareholders with [French conglomerate Vivendi Universal]. They’re very ambitious, which is great to have an investor who’s very ambitious. They want to see us do a lot of things. So we have a lot of opportunities on our plate. We have a lot of day-to-day things.

I don’t look at my own [career] on a personal basis. I’m not on a 20-year plan. As long as I can contribute a lot and I have a lot of interest personally, as long as I’m effective, then I hope to stay here and continue to do it. And we’ll look at each year as it comes.