The CEO of NBCUniversal said he was surprised by last week’s announcements that rivals HBO and CBS were jumping into the Internet TV business.
On Comcast’s earnings call with analysts Thursday, Steve Burke, who runs NBCU, was asked if he’d gotten a heads up on last week’s news that HBO planned an over-the-top service next year and CBS’ launch of a $6.99 all access product that includes live streaming of its stations' programming.
With CBS, Burke said he was surprised “because they’ve been such a defender of retransmission consent and the traditional ecosystem and been so successful in the broadcast business.”
As for HBO, “I think it’s going to be such a challenge for them not to cannibalize what is already a really, really good business,” Burke said. “That having been said, we’re so early on in the transition to more Internet television that I think you’re going to see a lot of surprising things and it’s surprising to me that we’re making hundreds of millions of dollars from Hulu and Netflix and Amazon, businesses that we didn’t even think about five years ago.”
Burke told the analysts “I think we all ought to be prepared to be surprised every once in a while, but also put everything in perspective and really look at what people’s real motivations are and the challenges.”
Earlier in the call, Comcast execs said they thought HBO and CBS’ moves were designed to strengthen their business within the current TV ecosystem, rather than trying to circumvent it.
“I don’t think distributing directly to consumers via the Internet is an easy thing to do, and I think it’s a voyage that if you’re successful like Netflix, can be a way to create a lot of value. But it’s not an easy thing to do,” Burke added.
With cable networks ratings falling, Burke was asked about changes that might be coming to NBCU’s stable of channels. Like Time Warner’s Turner Broadcasting, which laid out plans at its investor’s day last week, part of the formula is to ramp up original programming and mixing in sports with entertainment.
“If you take USA for example, we’re going to be investing more in original programming. We’re not going to put a number on that because a lot of that is show dependent, but investing in original programming,” Burke said.
“We’re changing the lens on that programming. If you went back five years or so, USA was in the business of creating blue-sky procedurals and we’re much more interested in serialized, slightly edgier content. I think you could see us taking some of our existing sports that are on other channels and putting them on USA,” Burke said. “So there will be a whole variety of changes and hopefully those changes result in a hit and our ability to outperform the rest of the sector."
Burke added that the cable network environment is getting tougher. “I do think that the point we’re trying to make is that the sector is unlikely to have ratings performance over the next five or 10 years that’s as good as it was over the last five or 10 simply because it’s more competitive and there’s more technological change out there,” he said.
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