NBC Universal Television Group President Jeff Zucker is launching a comprehensive review of his broadcast network, cable channels and stations, saying the company’s current organization is geared for yesterday’s TV technologies.
As digital advances such as on-demand viewing force change on the television business, NBC Universal will analyze operations to ensure the company adapts, Mr. Zucker said via satellite during a July 12 town hall-style meeting, according to employees who participated.
Mr. Zucker’s initiative, which he dubbed TV2.0, follows his push to create Web and mobile accompaniments to all the programming produced by or for the TV group’s divisions. He said that plan, called TV360, is now fully integrated into NBC Universal’s ad sales and has helped generate several hundred million dollars in revenues, employees told TelevisionWeek.
NBCU will invest some $150 million over the next two years in new digital channels and high-definition and dot-com projects, Mr. Zucker said from CNBC headquarters in Englewood, N.J.
The unprecedented strategic review and the new spending puts NBCU among media companies trying to adjust to seismic shifts in viewer habits and advertising spending. Mr. Zucker in last week’s meeting cited a BBC study released in April that warns of a coming “big shock” from digital technologies.A day after Mr. Zucker’s meeting, Dow Jones announced a strategy aimed at tailoring Wall Street Journal content to the media that best serve customers and advertisers.
The success of Mr. Zucker’s initiative may depend on NBCU’s willingness to leave behind existing business structures and embrace new approaches, said Gordon Borrell, president and CEO of Borrell Associates, a research and consulting firm that tracks Web advertising.
“If it’s organized and run by traditional broadcast people with their set prejudices of what broadcast should be, then it’s probably doomed to failure,” he said. “If it’s a separate unit and they’re going after a new audience and they’re not going to try to force the initiative to serve their core product values, then they’ll succeed.”
NBC spokesman Cory Shields described Mr. Zucker’s presentation as part energizer and part “state of the network” speech. The review of the TV group businesses is about meeting “changing consumer demands and taking full advantage of the latest digital technology,” Mr. Shields said.
The network is recovering from fourth-place finishes among networks in the past two prime-time seasons, bouncing up to No. 2 this summer among the 18- to 49-year-old viewers who draw the biggest bucks from advertisers. Mr. Zucker said he would launch the TV2.0 review even if his network was No. 1 in prime time.
The network currently sits atop news programs and late-night slots, and the return in August of National League Football games to NBC for the first time in eight years will probably boost the network’s standing.
NBC Universal’s bright spots include USA Network, which last week was the top-rated cable channel in prime time. CNBC, MSNBC, Sci Fi Channel and Bravo’s hit “Project Runway” are also drawing more viewers.
The TV2.0 review may eventually lead NBCU to expand staffing in some areas and shrink in others, Mr. Zucker said during last week’s meeting.
The initiative “isn’t about layoffs,” Mr. Zucker said, responding to a query during the meeting, according to multiple sources who participated. He said that staffing ultimately might expand in some areas and contract in others.
The network that integrates digital capabilities into all of its products first will gain an advantage over competitors, said Steve Ridge, executive VP of TV consulting firm Frank N. Magid Associates.
“It’s a work in progress for all the networks,” he said. “It comes down to who gets their arms around both the content and the distribution the quickest. I think the race is on in that regard.”