NBC’s Cuts Will Alter the Look of Prime Time
Prime time isn’t as prime as it used to be.
NBC Universal’s announcement Thursday that it will restructure to save $750 million over two years marks a retreat in prime time, the lucrative three-hour programming block from 8 to 11 p.m. that has long been the petri dish for U.S. pop culture.
Instead of using the 8 p.m. time slot to showcase its most popular scripted shows -- such as “The Cosby Show” in the 1980s and “Friends” in the 1990s -- the NBC network will fill the hour with game shows and other lower-cost fare.
As the cost of new scripted shows has soared, viewers this season have not been impressed with the new offerings. Networks have been disappointed with the results, particularly with several shows that premiered at 8 p.m.
“The audience just isn’t there,” Bob Wright, chairman of NBC Universal, said in an interview. “We have some of our best stuff at 8 o’clock, and it’s struggling.”
Wright said NBC’s game show “Deal or No Deal,” CBS’ durable “Survivor” and ABC’s “Dancing With the Stars” have built solid followings at 8 p.m. And most reality or game shows like those are a fraction of the cost of scripted programs.
Doing away with scripted programming at 8 p.m. would deal a blow to the thousands of actors, writers, producers and talent agents who have long enjoyed the fat paychecks that come from feeding the broadcast networks’ voracious appetite for new dramas and sitcoms.
NBC’s shift means the network probably will spend millions less next spring when ordering pilot episodes for the fall season. The network has fewer holes to fill at 9 p.m. and 10 p.m. because those slots are primarily occupied by proven shows.
Broadcasters have been gradually scaling back the number of hours they program with expensive shows. Saturday has become a night of reruns. NBC rival Fox has dominated in the ratings by filling only two prime-time hours on most nights.
Prominent Hollywood producers said NBC’s move was not all that surprising.
“You’re seeing this season a lot of expensive shows failing right out of the gate. And that’s money they’re not going to get back,” said Greg Garcia, creator of “My Name Is Earl,” an NBC comedy.
David Nevins, president of Imagine Television, which produces “Friday Night Lights” for NBC, said, “I’ll take a little less shelf space for more focus. For a network, launching too many shows at once tends to kill off all of your ducklings.”
At NBC Universal, the cost cutting will go beyond the broadcast network’s prime-time programming, which has suffered through two dismal seasons in fourth place and has become a drag on the earnings of parent General Electric Co. Every division of the once-proud peacock will be trimmed, from NBC’s news-gathering operations to the Universal film studio. Division heads have been asked to identify personnel to cut and areas to streamline to boost profit.
The planned layoffs total 5% of NBC Universal’s full-time workforce of 15,000.
NBC Universal’s approximately 700 job cuts follow those of other media titans that are struggling to remain relevant as more people turn to the Internet for their news and entertainment. Over the last year, Time Warner Inc. has eliminated more than 6,000 positions. In July, Walt Disney Co. said it would pare 650 people from its film studio.
NBC executives said the bulk of the cuts would come from the TV unit, which makes up two-thirds of the company’s workforce. The news division could be hardest hit because it is the company’s most labor-intense operation and includes NBC network news, local TV station news, Spanish-language network Telemundo and cable channels MSNBC and CNBC.
“We’ve been looking across to the company to see where we might have some overlap,” said Jeff Zucker, chief executive of NBC Universal Television Group. “It turns out there is a lot.”
At Universal Pictures, plans include consolidating marketing operations for theatrical and home entertainment releases. That makes sense, Wright said, particularly now that studios are releasing movie DVDs several weeks, rather than several months, after the box-office opening. Wright said the studio planned to release about the same number of movies, or in the case of Universal Pictures, 14 to 18 films a year.
“We hope to be a little smarter about how we release them,” Wright said, adding that there would be no “draconian cuts” in the company’s Los Angeles operations.
Although NBC Universal plans to restructure its core units, it expects to reinvest much of the savings in digital opportunities and other high-growth areas. Wright estimated that the company’s revenue from digital forms of entertainment should reach $1 billion by 2009.
“This is all about trying to keep up with the Internet,” said Brad Adgate, research director for ad-buying firm Horizon Media. “These companies are trying to hold on to their share of the ad dollars.”
But several advertisers and academics questioned the wisdom of NBC setting aside a third of its prime-time schedule for reality shows that, like scripted programs, are hit or miss. They said NBC’s real problem was that it hadn’t found a sitcom that could perform like “Friends” did.
Advertisers and TV producers pointed out that networks have had much success over the years at 8 p.m. This fall, CBS successfully launched “Jericho,” a scripted show about the aftermath of a nuclear blast, and ABC found a beauty in “Ugly Betty.”
“I just think it’s a shame to give up a time slot that’s yielded so many hits over the last 20 or 30 years,” said Josh Berman, creator of “Vanished,” which has struggled to find an audience on Fox. “So many hit shows that have gone to reap hundreds of millions of dollars have originated in the 8 or 8:30 time slot.”
Advertisers said the impetus seemed all about boosting the bottom line.
“Short term, it might provide an economic benefit because reality shows are less expensive, but it might not pay off in the end,” said Jason Maltby, coexecutive director for national broadcast at ad-buying firm Mindshare.
Sam Armando, director of broadcast research for media buying firm Starcom USA, agreed. He said he was puzzled by the move since there were still as many people watching TV today as there were five years ago.
“We buy programs -- not time periods,” Armando said. “It all comes down to the content of the shows, and the audience that they deliver.”
Some NBC Universal executives privately regard the company’s restructuring plan -- dubbed NBCU 2.0 -- as an effort by Zucker to lay out a forward-looking plan that will impress GE, whose chief executive, Jeffrey Immelt, is weighing who will eventually succeed 63-year-old Wright. Zucker, the former “Today” executive producer, soared up the corporate ladder, but during his tenure NBC’s prime-time fortunes have plummeted.
Zucker dismissed such speculation. “This is not about me,” he said. “This is about doing my job to make sure that we are well positioned for the future. We will see greater changes in the media industry in the next five years than we have seen in the last 50 years.”
Staff writers Matea Gold and Lorenza Munoz contributed to this report.
(BEGIN TEXT OF INFOBOX)
NBC Universal has seen a decline in earnings every quarter this year from the same period the year before.
NBC Universal profit (In millions)
Source: Company reports
Key elements of NBC Universal’s plan:
Cut about 700 jobs, 5% of its full-time workforce
* Replace scripted programming in the 8 to 9 p.m. time slot with less-expensive game and reality shows
* Reduce administrative and operating costs by $750 million by the end of 2008
* Create a centralized news facility in Burbank for the NBC and Spanish-language Telemundo broadcast networks, plus local stations KNBC, KVEA and KWHY
* Move MSNBC, now based in Secaucus, N.J., into NBC facilities in Manhattan and Englewood Cliffs, N.J.
Los Angeles Times