Zucker: No Easy Way Through

Oct 23, 2006  •  Post A Comment

NBC Universal Television Group President Jeff Zucker last week made some difficult choices. The company announced $750 million in cost cuts, the elimination of 700 staffers and a move on NBC toward unscripted programming in the 8 p.m. hour, away from more expensive scripted shows.

TelevisionWeek National Editor Michele Greppi spoke with Mr. Zucker the day after the cuts, part of an initiative dubbed NBCU 2.0, were announced. An edited transcript follows.

TVWeek: Is it true, as lore has it in Hollywood, that the inspiration for what would become NBCU 2.0 occurred as you and NBCU Stations Group President Jay Ireland stood on the Burbank campus and watched three different NBC-family TV news trucks peel out to cover the same news event?

Jeff Zucker: [Laugh] No. No. Not even remotely close to being true.

TVWeek: What explains the timing of the NBCU 2.0 announcement? There seemed to be a push to get it out now, even though there seem to be a number of long-lead aspects of the plan. and the plan seems to contain many still-nebulous outlines.

Mr. Zucker: That’s a very fair question. You asked me what the genesis was. The truth is this all began in the summer. You can’t be in this business and not be struck by the rapid changes that are going on across the media industry, whether you’re in television or print or any part of the media industry.

As we went through our three-year budget process this summer, as we do every year, it became clear that the business was only going to get tougher and tougher over the next three years if we didn’t act on it now. We began the review with this summer and the reason we chose now to go public with it and to begin implementing it, even if it’s not 100 percent formed, is because in order to start getting the savings for next year you want as much of it as possible to be in place by Jan. 1.

And, frankly, I think we would all rather have whatever is going to happen this year happen between now and Thanksgiving. You don’t want to be making these tough calls and decisions during the holiday period. That explains the timing. You’ve got to start moving if you want to get full credit for it starting Jan. 1. That’s why now. Between now and Thanksgiving, the things we’ll try to get done by Jan. 1, we’ll do. It won’t all be done, and it’s going to evolve.

TVWeek: How much do you know about what will happen in which areas and when?

Mr. Zucker: There’s been a lot of very good work that’s been done, and we have some ideas. A lot of it is going to take time. I don’t know that we know everything, but there are some pretty specific ideas about what is going to happen.

I think the biggest misnomer that is going on—and I completely understand it—is that when we say news and information people immediately think NBC News, because it’s the highest profile, it’s the most visible and it’s what gets written about the most.

When we talk about news and information, we mean NBC News as only one piece of that. We also mean CNBC, MSNBC, Telemundo, our local television stations, our local Hispanic stations, MSNBNC.com, etc. That’s the way we look at news and information. So it’s going to be spread across all of those units I just named.

TVWeek: Does NBCU 2.0 overlap or supplant TV 2.0, which you announced in July, when you indicated that some $150 million would be spent on preparing the network for the digital era?

Mr. Zucker: TV 2.0 is the TV group’s part. NBCU 2.0 touches every part of the company, including film and theme parks, etc. In terms of the investments, the answer is yes, we’re going to continue to invest.

The best examples I can give you are ones that have happened in the last six weeks. We just spent a lot of money on transforming the “Today” show studio to an HD studio and control room. We just spent a tremendous amount of money and time transforming WNBC to an HD operation. We did the same thing with our sports operation and the NFL. We’re spending a considerable amount of time, money and resources and we’re about to launch in six weeks CNBC.com.

There’s a tremendous amount of investment that is going on right now on continuing to transition the company into the digital era, whether it’s HD, whether it’s online.

TVWeek: Does the intent to develop more unscripted programming for the 8 to 9 p.m. hour, and less expensive dramas and, presumably, sitcoms, automatically lead to lower CPMs for 18- to 49-year-old viewers?

Mr. Zucker: Not in the slightest. Not in the slightest. The fact is we have already evolved very much to this strategy.

We’re not going to get rid of “My Name Is Earl” and “The Office” out of 8 o’clock. … That’s what I think has been completely misconstrued in all the coverage. It is not about getting rid of “Friday Night Lights.” We love “Friday Night Lights.” We want “Friday Night Lights” to be around forever. What we’re saying is it just most likely would be on at 9 o’clock, not 8. That is the whole point. We’re very much in this already.

We have “Deal or No Deal” and “1 vs. 100” already on at 8 o’clock. We’re talking about, to make this grand transformation, as the media has played it, two nights of programming, Tuesday and Wednesday nights.

We are so close to this already, the viewer is not going to know the difference. We’re not going to be developing less or anything like that. It’s just shifting around where we go. So the answer to your question of are we going to get lower CPMs is, I don’t think so. The fact is the CPM that’s attendant to shows like “The Apprentice,” “American Idol,” “Survivor,” and these programs that air at 8 o’clock, is no less than any other.

TVWeek: You’ve said there will be an increased focus on the growing Hispanic market, yet there are reports that Telemundo will take among the biggest hits in the downsizing. Are those reports true? And if so, how do you square what would seem to be a contradiction?

Mr. Zucker: I would not say that Telemundo is taking any more disproportionate a hit than anybody else.

TVWeek: There are reports about Spanish-language local news operations being shuttered.

Mr. Zucker: The local news in the biggest Hispanic markets, be that Miami, Los Angeles, Chicago or New York, is not changing one iota. What is changing is that we’ve already been regionalizing the news coverage on our Telemundo stations in Texas. We’ve already been doing that. We’re going to move to that model in some of the smaller Hispanic markets in the Southwest and California, not Los Angeles.

But what I would say is that is just a more economic way—those smaller markets just cannot support the size of the operations that are in place there now. That in no way lessens our commitment to news on our Telemundo stations. We’ve probably made as much investment in Telemundo as we have anywhere in the company and will continue to do so.

The best examples of that are we are now producing ourselves all of our own novelas. We have moved to a model where we are not licensing any of our novelas anymore. We’re picking up the cost of all of our prime-time programming. We just opened a television studio in Mexico. We just opened a news bureau in Mexico City. We’ve just completed buying three Hispanic television stations in the last 18 months, so I think our commitment to Telemundo is pretty phenomenal.

TVWeek: You were the golden child out of NBC News, but you have labeled it a no-growth or low-growth business. How much does it hurt to say that?

Mr. Zucker: NBC News is closer to my heart than anything. There’s nothing that means more to me than protecting the great brands of NBC News. My point is it’s less about being no-growth—there’s going to be growth in news, it’s just going in other places. It’s online. It’s wireles
s. My job is to be honest about what’s going on.

If we’re not all acknowledging the changes going on in the news industry, whether that’s at NBC News or The New York Times Co., or Tribune, or Belo, or Gannett—and it’s television stations and print [products]. We’re all going through this. I would like to think I’m the best friend of NBC News in making sure that the great brands get protected as we work through this transition in the new media world.

No one cares more deeply about NBC News and is committed to making sure that NBC News remains the gold standard. At the same time, there has to be a recognition that we are in the middle of a real evolutionary process right now in the news industry. I think we all know the migration of the news consumer to other places has triggered many painful issues around the industry.

TVWeek: There were some NBCU staffers who watched Thursday’s town hall meeting about the future—their futures, as well as the company’s—and who came away feeling as if they’d just listened to Bush, Cheney and Rumsfeld talk about how well the Iraq war is going. How will the company deal with such morale problems related to the elimination of some 700 jobs over the next two years?

Mr. Zucker: I actually would completely say that what we were there to be was honest about what’s going on. I don’t see how you can come away from a discussion—where you acknowledge that things are changing, times are tough, and as a result you’re going to take some very tough steps to try to ensure all our viability—and believe that’s anything close to being in denial. If anything, we’ve been completely open about what’s going on and where we’re going.

Obviously these are always tough times, and we have to know we are going to go through a difficult year here. Hopefully you come out of it on the other end stronger and better for it. There’s no easy way to get through this, and that’s exactly what we said yesterday. I’ve been at NBC for 20 years, so I’ve been through this a few times.

In 2001 the company cut 10 percent of its workforce. Today we’re looking at 5 percent of the workforce. That doesn’t make it any easier on anyone.

TVWeek: How would you respond to the feeling of competitors that NBCU 2.0 is not about the future they all face but instead is about business problems NBCU created for itself?

Mr. Zucker: It’s really unfortunate. Every media company is going through the same thing. Disney lays off 650 people and shutters its film label. AOL lays off 6,500 people and changes its AOL model. We’re all grappling with our own issues, and no one is immune.

TVWeek: If you were still Jeff Zucker, executive producer of “Today,” how might your feelings about NBCU and the 2.0 plan differ from your feelings as the CEO of the NBC Universal Television Group and aspiring NBCU chairman?

Mr. Zucker: When I was at the “Today” show, I was there when we had to go through two headcount reductions. I lived through this. Sometimes you have to look at these unfortunate situations as an opportunity to reinvent yourselves as well. I hope each of our units look to come out of this even stronger.