NBC Uni leaning on digital


NBC Universal expects to realize $300 million-$400 million in digital revenue this year and $1 billion by 2009, NBC Universal Television Group CEO Jeff Zucker told Wall Street analysts Monday.

Among key drivers of digital growth will be download-to-own and wireless offerings, he said here at the annual Credit Suisse Media and Telecom Week conference in a well-attended and well-received appearance as Wall Street folks came out to watch the man many expect to be the next CEO of NBC Uni.

About a third of this year's figure will come from iVillage.com, Zucker said. But his team also has been positively surprised by the traffic created by TV show streams on NBC.com, which comes as a strong indication that the turnaround in NBC's primetime fortunes is well under way, Zucker said.

"It has been significant," he said. "We are collapsing windows in TV," and this has helped bolster the fortunes of new series like the Emmy-winning "The Office," rather than cannibalizing NBC's traditional audience.

Asked about the expected departure sooner or later of NBC Uni chairman and CEO Bob Wright, Zucker wouldn't comment beyond saying: "We have a lot of talented executives. So, we'll be well-positioned."

Zucker's appearance came on the same day NBC Universal confirmed a reorganization of responsibilities among senior managers in its TV group and the appointment of General Electric veteran Michael Pilot as president NBC Uni ad sales. Pilot replaces Keith Turner, whose resignation was announced last week (HR 12/4).

During Monday's conference, Credit Suisse analyst William Drewry, who questioned Zucker onstage, told the audience he had confidence that he was already speaking to Wright's successor.

Zucker told investors that NBC Uni continues to "feel very fortunate to be part of GE," which controls 80% of the company. Zucker said that though GE chairman and CEO Jeff Immelt would have to speak in detail about his views for NBC Uni's role within GE, he predicted that the media conglomerate would be "a major piece of (GE's) future."

As examples of how GE helps NBC Uni, he later told reporters that it got the NFL and Olympics rights partly because of GE's willingness to be patient and supportive.

Asked about Vivendi SA, which holds 20% of NBC Uni, Zucker said the firms have had "a very good relationship." Although he declined to speak for Vivendi on when it plans to start selling its stake, he said he expects the French conglomerate to stay involved with NBC Uni "for quite some time."

Zucker also told investors not to expect big deals in the near future. "You won't see us do any more major acquisitions" after spending big on Telemundo, Bravo, Vivendi's entertainment assets and more in recent years. "We are now focusing on execution," Zucker said.

Next year, cable networks and Telemundo will drive NBC Uni's performance, while TV stations will face tough comparisons with this year's political advertising and the Olympics, Zucker said.

He predicted that his firm's cable entertainment group and CNBC will be up in the double-digit percentage range again next year, and Telemundo is finally in a position to fulfill its promises. "Next year is the year for Telemundo," Zucker said, citing competitor Univision Communications' distractions from its sales process and recent audience and advertising share gains.

With a 23% Spanish-language TV audience share, Telemundo gets about 30% of the ads and expects to further grow that, he said.

Zucker also said MSNBC's goal next year is to overtake CNN in primetime in key demos.

On NBC, Zucker reiterated that the network is not exiting scripted programming but simply looking to reduce costs by looking for a better mix of scripted and more affordable content.

He called the NFL and the new hit show "Heroes" cornerstones of the NBC turnaround. He later told reporters that the NFL will make "a slight profit" for the company when taking a broad look by including TV stations and the like.

NBC Universal's three main goals "all revolve around content," he said. First, the company wants to focus on making what he called traditional or "content here" as strong as possible. "The turnaround of NBC primetime is in place," Zucker said, but "more needs to be done."

Second, NBC Uni is looking for further international expansion. "We see a real growth opportunity internationally in the coming years," he said.

Finally, NBC Uni is pushing "content everywhere" in the digital world, Zucker said.

In terms of NBC's primetime, he said it "has been the biggest factor in our performance" in the past couple of years, even though the rest of the NBC Uni TV operations have done well. But season-to-date, the primetime schedule is up double-digits in the ratings year-over-year, he added. "We still have a long way to go, but I feel good," Zucker said.

In addition to Pilot's appointment, NBC Uni on Monday confirmed that NBC Universal TV Stations chief Jay Ireland will take on oversight of Telemundo Network, after last month's departure of Randy Falco, former president and chief operating officer of NBC Universal TV Group and now AOL chairman and CEO (HR 11/16). Telemundo president Don Browne will report to Ireland. NBC's affiliate relations department, led by executive vp John Damiano, and NBC Network Operations, headed by John DeWald, also will report to Ireland.

Ireland and NBC West Coast president Marc Graboff will now also oversee NBC's domestic syndication activities, headed by NBC Domestic TV Distribution president Barry Wallach. Wallach had reported to David Zaslav, who left his post as president NBC Uni Cable and Domestic TV and New Media Distribution last month to become CEO of Discovery Communications (HR 11/17).

John Eck, NBC Uni's chief information officer, and Bruce Campbell, exec vp business development, had reported to Falco but now will report to Wright.
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