NBC Universal (NYSE: GE) CEO Jeff Zucker, in a Q&A with Ellen Pollock, executive editor, BusinessWeek, opened the McGraw-Hill Media Summit by taking on Comedy Central’s Jon Stewart, who on the Daily Show last week took CNBC and one of its main stars, Mad Money host Jim Cramer, to task for not doing more to be in front of the economic collapse.
Apart from taking on Jon Stewart, Zucker also touched on why Hulu pulled its content from CBS’ TV.com video site, the changing model of TV in general and progress the company has made on the digital front. How much progress? Well, Zucker updated his conference line about analog dollars being turned into digital pennies as TV programming migrates online, saying that now, the network is able to wring “digital dimes” out of its web video. Still, he was naturally short on specifics in terms of how many digital dimes NBCU has been counting. More after the jump.
Zucker: “I think Jon Stewart was incredibly unfair to CNBC and to the business media in general. Everybody wants to find a scapegoat. I’m upset that my 401(k) isn’t what it was. But to suggest that CNBC is responsible is absurd. Last year, Jim Cramer was out in front during two days in particular, when he went after Ben Bernanke. He told viewers six months ago to go to cash now. It’s like holding BusinessWeek responsible for Nov. 2007 for suggesting that AIG was the best stock to buy. You can’t look at any singular call that CNBC or Jim Cramer makes. I’m incredibly proud of what we’ve done.”
– We’re a cable company: CNBC is enjoying its highest ratings ever, Zucker noted, so Stewart’s comments aren’t likely to dent the network’s viewership. As he has in the past, Zucker downplayed the broadcasting business, which has been suffering lately. “About 60 percent of our operating profit comes from cable. We’re mostly a cable company now, you wouldn’t know it by the name, but it’s true. We have two core competencies: news and information, and cable. That’s why the purchase of Oxygen was so important. Oxygen fit perfectly into that thinking, plus it helped offer a focus for female viewers and advertisers who want to reach them. The option for cross-channel promotion makes Oxygen a plus for us.”
– Questioning the model: After talking up the strength of NBC News, Zucker was asked about moving Jay Leno to the 10 p.m. slot. “We’re going through tremendous changes. I’m sure BusinessWeek is constantly trying to decide how much to put online and how much to put in print. Newspapers didn’t ask themselves about the changes, neither did Detroit. We all wish we could put our heads down and wish it were 1987. But technology has changed the way people watch video. NBC primetime has had a difficult time the past three or four years. Sometimes, you see the world more clearly when you’re flat on your back. We’ve had the same model for 50 years. We have to question that, especially in this economy.”
– From primetime to all-time: As for Leno and Conan, NBCU wanted to have its cake and eat it too. “We wanted to show a commitment to both. This is the third or fourth time we’ve looked at moving the time of the Tonight Show. Technology and viewer habits have made this make sense. We expect to do well, but we don’t expect to do as well with the primetime dramas. But what does being number one in primetime mean anymore? What matters is how many people are watching on iTunes, how many are downloading on iTunes. I don’t want to say ratings don’t matter. It’s just that they are not the only gauge anymore.”
– Online video dust-up: Yes, Hulu can make money, Zucker said, and it is “well ahead of plan.” As for where it is at this moment, “we don’t talk about finances right now.” Asked about the dust-up between Hulu and TV.com, it has to do with how it was configurated after the CNET purchase. They broke certain agreements, but I’m hopeful that will be resolved soon. Speaking of dust-ups, turning to NBCU’s conflict and subsequent rapprochement with Apple (NSDQ: AAPL) over iTunes, Pollock asked if it was all about flexible pricing, Zucker said, “Yes, that was it. It was about whether or not we lose control of pricing our content. You can’t price old and new content the same $1.99. It’s a losing proposition.”
– No digital dollars: One of Zucker’s oft-repeated catchphrases on the conference circuit has been his line about about trading analogue dollars for digital pennies. There’s been some progress this year, but he’s not certain there will ever be a dollar-for-dollar tradeoff between traditional and online. “We’re at digital dimes now. We’ve made progress. But it’s not just about revenues. It’s about costs. Look, these are scary times and this is all about the changing model.”
– Upfronts look down: There’s some paralysis on the part of advertisers right now. Zucker expects it to move slowly, and says some of the broadcast networks won’t sell as much ad inventory during the upfront. The cable upfront, however, will be strong, he insisted. As for whether parent General Electric will keep NBCU in the fold, Zucker says he has no indications that there are plans to jettison the media company, and he expects that the two will be together for many years to come. But he also noted that “nothing lasts forever.”