NBC Universal CEO Steve Burke told analysts Wednesday that smaller networks at large programming companies could be under pressure as those content providers continue to focus on their bigger brands.
Speaking on a conference call with analysts to discuss parent Comcast’s second quarter results, Burke remembered the cable operator’s initial purchase of NBCU, and how it said that ultimately it would look to reduce the number of overall channels at the company. Today, that is becoming reality at NBCU – it rebranded its Style Network as Esquire Network and shuttered its G4 channel in 2013 – and with other content companies as well.
“We and most other large media companies are concentrating on their big brands,” Burke said on the call. “We had a network called G4 and a network called Style, neither one currently exists. I think you will see more of that with us and others as the discussions with MVPDs get more and more contentious. You want to make sure that your big networks are fully supported and you’re more willing to reallocate. Normally when you do those reallocations they’re not all that negative for the content owner because you can take some of the programming and fees and ad sales and consolidate them on some of your bigger networks”
Burke said the focus on its larger brands like broadcaster NBC and cable channels like USA Network, Syfy, Bravo and others makes the programming bundle more compelling.
“The good news for us is if you have NBC, you really need to be in a bundle, if you have USA it needs to be in a bundle, if you have Syfy or Bravo or E! those are big substantial networks that are in the bundle,” Burke said. “We make most of our money in those big channels. And we’ve trimmed and I think you’ll see us and others continue to trim some of the more marginal channels. There are just too many channels. People are spending too much programming channels that are not fully distributed. You’d much rather put your money and have Mr. Robot on USA and The Voice and Blindspot on NBC and really go with your strong networks.
Burke continued that it is an ongoing process, and NBCU sees more to be done.
“I think there is more to do,” Burke said. “I don’t think it is going to have a material impact on the way our profitability looks in terms of cable channels one way or the other – it might be slightly positive. I think it will evolve itself over the next number of years. We’ll continue to invest what we need to invest in the big guys and try to trim some of the smaller ones.”
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