Zucker: 'It's about less waste'

Keynote outlines sweeping changes to NBC Uni biz plan

NBC Universal is looking to shake up the way it does business, particularly with its pilot development and upfront presentations, president and CEO Jeff Zucker said Tuesday.

In his keynote speech at NATPE's opening session, Zucker said NBC will order more projects straight to series and greenlight five or six pilots a year, sign fewer development deals and likely forgo its glitzy upfront presentation in May in favor of meeting with advertisers one-on-one.

"We must acknowledge that a significant part of the industry is under pressure and needs to change," Zucker told a packed ballroom at the Mandalay Bay. "We've needed to do this for a few years, but there was no real sense of urgency."

He said factors including the state of the economy and the writers strike have speeded up the time frame in which NBC is making these changes.

"Broadcasters can no longer spend hundreds of millions of dollars every year on pilots that don't see the light of day or on upfront presentations or on deals that don't pay off," Zucker said. "And we can't ignore international opportunities, video-on-demand or the Web."

He said pilots are "stand-alone mini-movies" that cost as much as $10 million each to make and "are not even close to what the series will look and feel like." To that end, NBC will order fewer pilots and start ordering more projects straight to series — "those that our executives really believe in" — similar to the model for reality shows.

He noted that NBC Universal's cable network USA ordered five pilots during the past two years, four of which made it to series and two of which became the top-rated new cable shows of 2006 ("Psych") and 2007 ("Burn Notice"). Yet none of the new scripted series that have debuted on the broadcast networks so far this season can be considered successful, and only two in the previous season — NBC's "Heroes" and ABC's "Brother & Sisters" — were hits, he said.

"It's not about making less programs; it's about making less waste," Zucker said. "We're not going to do worse that the figures I cited for the last two years."

He added that NBC is not looking to get out of the scripted business, noting that too much "downstream revenue" — from syndication, video, etc. — would be lost, and said that the new strategy falls in line with NBC Entertainment chiefs Ben Silverman and Marc Graboff's way of thinking.

In a Q&A with The Hollywood Reporter editor Elizabeth Guider after his speech, Zucker added that NBC is moving toward a year-round programming schedule, where series greenlights and premieres take place throughout the calendar year and not just based on a September-May season.

Asked by Guider about NBC's competitors, Zucker admitted that the Peacock will be "on its own" doing this at first but its success would be followed by other networks.

"This system has been around for 20, 30, 40 years and needs to evolve," he said. "We're willing to make chances and learn from our mistakes as we go."

Noting that viewers have more platforms in which to view content, Zucker added that it's a "huge mistake that too many people want to perpetuate the old ways of doing business" and noted that NBC is making it a priority to reach viewers in as many ways as it can, citing NBC Universal's online video site Hulu, a joint venture with News Corp.

Other priorities for NBC Universal include developing shows that work in foreign territories, aggregating new viewers in new distribution platforms, increasing advertising inventory through multicast distribution and working with advertisers on new ways to engage consumers as well as developing new advertising models.

NBC previously has indicated that it might do away with its annual glitzy upfront presentation to advertisers, and Zucker said Tuesday that it's not a done deal but close. Instead, the idea is to take a page from many cable networks' books and visit with advertising agencies and advertisers "in person to explain the rationale behind our schedule and shows." He said an official announcement is imminent.

As for any development deals to be handed out, Zucker said there's no specific number he has in mind but noted that many are signed out of fear that competition would beat NBC to it, and "most turn out to be inefficient."

"We can't just keep chasing someone because our competitors are; we've got to drive our own business," he said.

Zucker also called for changes in the FCC's regulatory policy, saying there should be a comprehensive and careful review that takes into account today's broadcast environment.

"The rules they choose to enforce based on the political whims of the day seem outdated," he said.

Another concern for NBC Universal is the analog-to-digital switch in February 2009.

"The thing I'm worried about most is making sure that we do not end up changing analog dollars for digital pennies," he said. "We have to figure out how to get through those years and come out successful on the other end when our digital business are completely mature, which they (now) are not."

Before the session, NATPE president and CEO Rick Feldman paid tribute to Merv Griffin and CBS Television Distribution chief Roger King, both of whom died last year.

"They were two giants of the business, with larger-than-life personalities, who changed the industry in their respective fields," he said. "We are deeply indebted to their significant contribution both to NATPE and the TV business as a whole."