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NBCU-News Corp.: Chernin, Zucker Talk

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After all the chatter, speculation and months of reporting, finally the top execs involved are on the record. The conference call with News Corp (NSDQ: NWS). COO Peter Chernin and NBCU (NYSE: GE) CEO Jeff Zucker from the Fox lot is underway. Chernin started by explaining that when the two first met about a possible venture months ago, the mission was to meet the needs of the different stakeholders — consumers, content providers, advertisers. The result, he said, is “a genuine Web 2.0 orientation to distribution of content.”
Zucker: Within hours of word getting out yesterday they had five charter advertisers and two more came in this morning. (One is Royal Carribean.) There will be a separate ad sales force for Newco.
YouTube: Chernin: “This is obviously not a YouTube killer. It it were .. we’d obviously have a standalone site … We’re obviously willing to meet with anybody” who meets business and copyright requirements. They have already talked to Google (NSDQ: GOOG) (CEO Eric Schmidt) this morning.
Zucker: “We are open for business with everyone.”
The two pointed out that you can’t have ubiquitous distribution — the key to this — without being willing to talk with everyone.
Asked about comparisons to Disney’s Go and effort to have synergy, Zucker reminded the questioner it’s a different internet environment now. Chernin pointed out that Go and AOL (NYSE: AOL) were both walled gardens (I don’t recall Go as walled) and this is ubiquitous distribution.
Windowing: Zucker: “Several hours after it clears Hawaii it’s up.” Chernin: Next day. Zucker said that so far additional distribution has not cannibalized from the networks and has increased programming.
American Idol: Chernin said American Idol is not on the table for the new venture; Fox doesn’t control the web rights.
Chernin: “We believe this will be a state-of-the-art revenue split.”
Chernin: Both NBC and Fox are committed with making this content exclusive to our distributors with the exceptions of our own sites.
Branding: It will have Newco single branding where ever it lives.
Content for sale: Most movies will be electronic sell-thru as will some TV. Zucker said anything on iTunes will be available for EST.
No favoritism: Chernin and Zucker said all the content providers will be treated the same. Zucker said the company will have independent management. Chernin: “You’re not going to see us push NBC or Fox ahead of anyone else.”
Why now? Zucker: “It couldn’t have fallen apart because it didn’t exist.” They said what really brought it together — as reported earlier — was the distribution partners.
Chernin:”It would be a mistake to assume it was a reaction to Viacom (NYSE: VIA) lawsuit.”
Equity partners: Chernin said not a lot of thought has gone into adding equity partners and that they’re “comfortable” as it but would contemplate it.
Mantra: We’re hearing it a lot now and will hear again in various forms: Chernin: “On day one it will be the largest distribution platform on the web.”
International: Zucker said the company wanted to get its domestic launch right first.
Contributions: Both companies will contribute some technology. Zucker: “The NBBC will provide technology to the new company and some leadership and personnel as we get up and running.” News Corp.’s FIM will provide IGN’s Direct2Drive for electronic sell-thru and personnel.
Acquisitions: They said it was premature to talk about possible acquisitions. As they build the user experience, whether they rent, buy or build various aspects will depend on what is most efficient.
Audio: You can download the MP3 or listen to the call here: [protected-iframe id=”2dcf6138a2cf55b86ce53e9179dbf0b9-33319749-33104822″ info=”” width=”145″ height=”60″]

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