NBC Restructuring, Looking For Fewer And Better Light Bulbs

by Wayne Friedman, Oct 19, 2006, 1:45 PM

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As it does with its light bulbs, General Electric wants better brightness and efficiency from NBC. The network is now focusing first on effectiveness, hoping illumination comes soon afterward.

Thus GE's NBC Universal Television Group has finally gotten around to focusing on layoffs--of perhaps as many as 700 NBC employees. In 2001, with NBC still No. 1, the network cut almost 600 jobs. Now that it's in fourth place--though some programming conditions are improving--sizable layoffs will be a lot easier to understand, like throwing a light switch.

An obvious problem area is NBC's news operations-- targeting its still-in-last-place cable network MSNBC. But that's not all. Jeff Zucker, chief executive of NBC Universal Television Group, has said that scripted programming is too expensive, and not enough advertisers are interested. So for scripted shows, expect cheaper deals--or no deals.

NBC Universal Chairman Bob Wright said the company instead would move increasingly toward digital media as a way to restore the company to double-digit growth next year. GE's earnings showed NBC profitability sinking 10% in the last couple of quarters--though the company promised better profits in the fourth quarter.

It's kind of sad--somewhat. NBC looks to be gaining some footing--last year with "My Name is Earl" and "The Office," and this season with "Heroes." You would think things would be looking up.

Nope. GE always expects its business to be first or second in its respective categories. NBC is in fourth.

Many of these moves centered around GE's famed "Six Sigma" strategy--which sounds like a futurist NBC show--or for NBC-ers, more like a work detail "the Others" on ABC's "Lost" have dreamed up.

According to the tenets of Six Sigma, success depends on two things: customer satisfaction and process capability. First, simply ask the customer what he wants and fine-tune your process to efficiently deliver it. This way you increase revenue through customer loyalty and product quality. Second, decrease costs by eliminating the hidden factory problems (no doubt scripted programming and bloated news operations).

Early on, GE's former CEO Jack Welch, being a hard-nosed businessman, only focused on the latter tactic. Afterward, however, he realized customers should have a specific say in things.

NBC has gone back to Welch's former approach--decreasing costs first. NBC, the network of the 90s, should figure out what the consumer wants first.

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