The $14 billion Vivendi Universal deal opens a new world for Jeff Zucker. As the company finds ways for the studio to fuel its various networks, the deal catapults him into cable's big leagues with control of top-ranked USA Network and Sci Fi Channel. With Universal Television, NBC gets what all of its broadcast rivals have: a substantial TV-production operation and library. Zucker and Universal Studios President Ron Meyer sat down with
Deputy Editor John M. Higgins to talk about how they'll weave USA and Sci Fi into NBC and how they plan to avoid mistakes made by other media giants.
NBC's track record with other TV properties is mixed. MSNBC, CNBC declining, Pax…
Zucker: That's totally unfair. Quite frankly, Bravo has been a big success, and Telemundo has had a huge turnaround. CNBC has actually been a huge asset for this company. Clearly, we've struggled with MSNBC, there's no two ways around that. Things have improved there a little bit under [President/GM] Rick Kaplan's new leadership. We've actually had a lot of success, and it's one of the reasons we have a lot of confidence going forward.
So what's the interplay among Sci Fi, USA, and NBC?
Zucker: Clearly, NBC and USA have the most overlap. Sci Fi is more of a specific niche. You will see overlap between NBC and USA, and you may see some joint development. Jeff Gaspin is going to oversee the development of movies and miniseries and reality for both networks.
Clearly, our ability to promote both USA and Sci Fi on NBC with on-air promotions or perhaps with exposing some of the programs the way we did with Queer Eyeon the TV network offers real opportunities. These are going to be our goals and challenges in the year ahead, to make the most use of the power of the NBC TV network.
Bravo improved right out of the gate. But that's easier to do with a network scoring 0.2 Nielsen households than with a 2.0 network like USA.
Zucker: That's a very valid point. USA is the No. 1 cable network, and Sci Fi has also had a tremendous year. What we can do is try to help continue to grow those networks. I'm not trying to pretend that we can double the size of the audience at either USA or Sci Fi. But if we can help at the margins, help expose their programs, and help with promotion, we can continue to grow those networks in a very satisfying way.
So will the promotion be occasional or something you do all the time?
Zucker: We'll have to feel our way through what is right and when. We're going to have a huge master grid of what the priorities will be at any one time. And the priority may be at Bravo, USA, or Sci Fi. It may be NBC and the launch of the new fall season, or the launch of the new John McEnroe show in CNBC prime time. Clearly, this is something we've proven we have expertise at and we're pretty good at. Balancing all of that I see as one of my main jobs, making choices and priorities.
What lessons do you take from ABC and CBS as far as what they did and didn't integrate?
Zucker: Certainly, our experience with both Bravo and Telemundo gives us great confidence here. Bravo is a fully integrated part of the NBC Entertainment Unit. That's one of the reasons it has had a lot of success.
USA and Sci Fi are going to be fully integrated into our television group and will receive the same amount of attention as anyone else will. That's why it has worked: When we say we're going to cross-promote something or put it on NBC, it happens. We don't have different captains fighting for different things like the other networks have. The ability to merge cable and network properties under one umbrella is unique to NBC.
We are set up differently, and that's why it works. I know there are a lot of questions at the other places as to why it hasn't worked as well. The reason it hasn't worked as well is we have one person and one team responsible for it.
It's hard to argue with how it has worked at Viacom. The company has kept CBS and MTV Networks fairly isolated and has been pretty successful. At ABC, the one criticism is that it tried to integrate too much.
Zucker: At ABC, I don't think that's really the case. I don't think there is any question that Viacom has had a lot of success, and they're probably the exception. But the fact is, Viacom has one person and one team overseeing all of the cable networks, reporting to [MTV's Networks'] Tom Freston. That's worked really well. There has been less integration between the television network and the cable channels, but that's because most of the viewers of their cable channels are still in school and most of the viewers of their television network are in nursing homes.
What about the TV-production operations. You say you're going to buy from all customers. So what does having Universal Television studios bring to you?
Zucker: Well, the TV-production arm is now the third-biggest producer of television behind only Warner Bros. and Fox. We're not in this for a volume game, and we don't want to produce just for the sake of producing. But the fact is that both of those entities, NBC and Universal, have been very successful on their own. The combination will now have something like 17 programs on the air they're producing—including the Law & Orderfranchise, Las Vegas, Crossing Jordan,and Will & Grace—and obviously cable programs as well.
We're not going to make the mistake ABC made with deciding only to buy from Touchstone. They've corrected that, but the benefit we have is we got to see that mistake.
We're not going to cut other suppliers off at all. Our most important new show next season is coming to us from Warner Bros., and I hope that continues.
Ron, NBC has been fairly flexible supplying cable operators with news product for video-on-demand services. What they really want is earlier windows for theatrical movies.
Meyer: We're going to all be forced to move the windows closer together, and I don't think it's a bad thing. It's too early to really give a definitive answer on it. But, as VOD becomes more of a business, I think that the windows will start getting closer. I would be surprised if it's a year, but I think it'll be a couple of years.
And as the DVD business has gotten bigger on the theatrical side, do you worry more about the windows on VOD and PPV side?
Meyer: No, I think we have to find a way to make it all balance together, and we all have a vested interest in it. We just need to find a balance so we don't cannibalize each other's business.
One expectation is, now that you have USA as a major cable outlet, will you bid for the major sports?
Zucker: It's not that we don't want to be in major sports. It's just that we aren't going to make stupid deals. And our strategy has been borne out. We've remained solidly No. 1 without those sports, and our bottom line has improved dramatically as a result of not being in them. We would all love to be in football, either on cable or the network side, and I'm sure it's something we'll look at. But we won't do anything silly.
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