Make no mistake, NBC U needs a remake and, my irritation at the overused 2.0 designation aside, this is a major one that continues a shift to de-emphasizing its broadcast network NBC as the center of the universe. It’s not a complete slash-fest either; as is the case at many other media companies, some resources are being shifted to growth areas like online, which is expected to contribute revenues of more than $1 billion by 2009. Announced this morning by Bob Wright, vice-chairman of GE and chairman and CEO of NBCU, the sweeping plan includes:
— Slicing costs by $750 million by the end of 2008.
— Reducing the workforce by 700 positions, about 5 percent, by 2008.
— Consolidating news production on east and west coasts. “New digital distribution opportunities and synergies will be created by improvements in how information is gathered, shared and distributed across multiple news and information platforms.” This will be on the network and local levels and includes Telemundo. MSNBC wil be moved out of Secaucus, NJ and into Rockefeller Center and NBC’s other NJ facility.
— The TV Group will “maximize its ability to generate revenues across all platforms – including new digital distribution outlets – through a business strategy that reduces NBCU’s dependence on traditional content distribution methods and advertising models.” So look for even more of an emphasis than we’ve had in recent months.
— As reported by WSJ, NBC will abandon high-cost dramas and comedies in the 8 p.m. slot although it is not giving the slot back to affiliates.
Jeff Zucker, CEO, NBC Universal Television Group and sounding a bit like NBCU chairman “2.0” (even though his chances of following Wright are not quite assured): “We have to recognize that the changes of the next five years will dwarf the changes of the last fifty.” Release.
WSJ: Not spelled out in the announcement but in this report … Wright told the Journal the moves should help NBCU return to double-digit growth as early as next year: “As we reprioritize ourselves toward digital, we’ve got to be as efficient in our current businesses as possible. We can’t have new digital expenses and the same analog expenses.” he said they will invest $150 million in new digital projects through 2008.
— Zucker told the Journal advertiser interest isn’t high enough to justify spending on scripted shows.
— The initial layoffs will come from the news divisions; NBCU spends about $1.5 billion annually on news gathering.
— Zucker also told the Journal the company is using the BBC restructuring as a model: If we’re going to improve our profit and position ourselves for growth in a digital world, we’ve got to change and we’ve got to do it now.”
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