• by Diane Mermigas , September 30, 2009

Diane Mermigas talks with the NBCU head about the role of conglomerates at the end of hegemony

Jeff Zucker, CEO and president of NBC Universal, has been trying to turn digital dimes into digital dollars for years. Currently he's delivering TV programs online through Hulu, transforming NBC TV stations into hyper local Web destinations, and selling TV advertising based on the Internet's automated, targeted model.

Still, Zucker concedes he's barely scratched the surface of where the media industry - and traditional businesses such as television and film - will go over the next few years.

How will people consume media differently five to 10 years from now?
Zucker: We'll still be consuming a tremendous amount of media; we'll just have a tremendous amount of control over how and when we get it. The other major change will be in mobility. It will be the underlying foundation.

Will that make a la carte or on-demand control of content a primary business model?
Zucker: There will still be editors and programmers. There will always be people who want someone to put content together for them. So, I don't think we will have a completely a la carte world. But for those consumers who want a la carte choices, it will be much more possible and prevalent.

Is there anything today, even in the most nascent stage, that represents a sure revenue source?
Zucker: Advertising and interactivity - anything using digital tech to better serve advertisers and consumers will allow us to find models that will work. We just need to harness that technology. We haven't completely figured it out yet. Subscription models, clearly, are also something we need to focus on. Those are the keys going forward.

How central will micropayments and e-commerce be?
Zucker: Micropayments and targeted zip codes, street address numbers, and targeted advertising are all going to be important in the years to come, and technology is going to make all of it possible. The same technology that splinters the audiences will make it possible for us to create viable business models. Micropayments will certainly be a big part of that. In five years, we will be playing with a much bigger basket of options than today.

How are you preparing for that?
Zucker: We're trying a number of things through our sales organization. We're doing business with Google and Microsoft. We're doing a lot of experimenting on the television sales side that we're hoping will pay off in the next couple of years. That's where our greatest experimentation has been. We've also been very out-front on the mobile side, which is also very nascent. We're especially trying a lot of things on the mobile side in both news and entertainment. We're going to be very well-positioned.

Why do you think mobile will be so important?
Zucker: Mobile is going to be adopted 24/7. Smart phones are something people cannot live without. Consuming video on mobile devices is already happening in a big way in Asia, and that technology will grow so it can happen here. We are making the right investments in mobile now, so that when it does take off here, we will be in good shape.

What portion of your revenues will come from advertising versus payments five to 10 years from now?
Zucker: I don't know that it will be that much different in terms of the percentage breakdown five years from now. It might be different types of advertising and different ways we sell it, but the breakdown overall will still probably be about 50-50 for the entire company.

What will television be?
Zucker: Great content will always be the key. Consumers will have a number of ways to access that content. But I think television will continue to play an integral role in people's lives.

Who will control media, and how will it be structured differently?
Zucker: I think that artists and creators will still be providing professionally produced content. There will still be editors and programmers making decisions about what gets done when, and consumers will have more control than they do today over exactly how they access all that content.

Will media conglomerates continue to exist as central hubs?
Zucker: Scale will still matter, and size will still matter, so I think you will still have conglomerates rolling out big parts of media and aggregating across many industry segments.

What will be the next big disruptor for media?
Zucker: Obviously, if we knew what it was, we would try to get out in front of it. Sometimes you don't know what the next disruptive force will be until it becomes disruptive.

What do you think has been the single biggest disruptive force in media so far?
Zucker: The digital video recorder. I think that really changed television consumption. That was the first technology that changed the television landscape.

Do you think the media industry can keep up with the pace of rapid change?
Zucker: The biggest mistake we can make is to continue the old ways of doing business. You've got to make new models even if it means disrupting old ones. You can't cross your fingers in the hope you can put technology back in the bottle. It just doesn't work that way. So, can we keep pace with rapid change? I think we have to, and if we don't, we're dead.

What might be the best example of that kind of innovation at NBCU that will pay off over the next five years?
Zucker: We have got to get even better at the way we innovate in the sale of television advertising. We need to get better at the way we harness and mine technology to make our content available online.

How will you - and other major media companies - change the way you measure your reach and target penetration in order to reset values?
Zucker: Just selling billions of dollars of television advertising on outdated modes of research is obviously not viable going forward. We're going to have to use technology that aggregates so we know where our media is being consumed all the way up and down the line, and to more effectively bring together targeted consumers and advertisers. Privacy will be less of an issue, or a different kind of issue, five to 10 years from now, because consumers would rather give up a little personal information in order to be connected to more relevant advertising and content.

Everyday, more and more consumers are comfortable sharing information about themselves with their networks in order to personalize experiences that cater to their interests. But at the same time, we have to protect the privacy of those folks.

What's the role of social networks and search?
Zucker: Social networks and search will continue to drive the personalization of media. Despite the tremendous impact they have already had, they will be even more integrated into what we do and into how people consume media.

Will prime-time still be relevant in a fragmented media world?
Zucker: Prime-time television will continue to exist. I think it will be more big events and live events. I think it will be more news and information, but I also think it will continue to be entertainment as well. You'll share the experience more with your friends. You will interact more with it, and it will transfer across all devices and platforms.

What development has most surprised you?
Zucker: The speed of change. Traditionally, the consumer has changed very incrementally. But what we are seeing now is very rapid change. The acceptance of online video is a very real change in play. So, I think the speed at which things are changing is very surprising.

The most exciting change ahead will be the realization that there is no end or limit to the way consumers and media will continue to evolve. And that will be uncomfortable for many of us who are used to traditional business models, and we're going to have to adapt.

One of the areas of most profound change has come in journalism and news. Is it possible that as the blogging phenomenon develops, news will return to some of its traditional roots in search of resetting some authoritative standard?
Zucker: It is an incredibly important question. We live in a world today where everybody's a journalist - or they think they are journalists - but the blogosphere is very different. As journalists, we are used to asking questions and then writing our stories. In the blogosphere, people write their blogs and ask questions later. It gives everyone a chance to contribute, but it is dangerous because there is no context, and there is no value put on the truth. Someone recently said - and I agree with this - that it is easy to be first and expensive to be right.

What do you think NBCU will look like in five to 10 years?
Zucker: I think that, at our core, we will still be a content company, but some of the ways we distribute content will be different than today.

Does that mean you probably won't need to own theme parks or television stations?
Zucker: I am not going to go there. But I'll say this: You don't have to stand pat with the hand you've been dealt.