• by Wayne Friedman , January 30, 2008

Las Vegas, NV -- NBC Universal's Jeff Zucker has made it clear during the last several months that the TV business needs to change in major ways--and not just because of the effects of the writers' strike. But one thing won't change: how its networks get the bulk of its advertising dollars.

"When we talk about the upfront, we mean two things: One is this glitzy presentation that we do at Radio City Music Hall. The other is the way we sell advertising inventory," said Zucker, president/CEO of NBC Universal, during the National Association of Television Program Executives meeting. "Let me be clear--the way that we sell inventory in that upfront selling period is not going to change."

NBC has been considering the idea of eliminating the presentation recently. If the big upfront show does disappear, NBC will look to have more intimate one-on-one agency meetings, perhaps with about a half dozen media agencies. But Zucker notes that the crux of the buying process for those agencies won't change. "No one makes those buying decisions until they see those schedules and those shows," he said.

Critics have said that without a big presentation, NBC will miss out on an opportunity to talk en masse to marketers--especially for a network that landed in fourth place over the last two seasons. They say having an upfront presentation brings needed press and industry buzz.

Zucker disagreed, and cited recent evidence. "There was no winter press tour this year with the nation's television critics, and even without that press coverage, we at NBC are enjoying the best winter performance of our new and returning shows in many years."

Still, Zucker didn't rule out a possible new type of upfront presentation, riffing off its recent out-of-home upfront presentation in New York. "We may try to do something like that; it may bring together all aspects of the company. But not in the traditional ways of doing it," he said.

While eliminating the upfront presentation will save money, cutting its current development process for TV shows will save much more. Overall, Zucker says the networks collectively spend $500 million on pilots in a given year--sometimes as much as $10 million on each individual pilot. He said there was little evidence these pilots result in a better success rate than by having a show go straight to series.

TV analysts have complained that NBC, and other networks--as a result of the writers' strike and other financial concerns--will now heavily run cheap reality shows. But Zucker said NBC wasn't abandoning scripted shows for reality, since scripted programming is of major value as marketers pay higher CPMs on average.

Concerning local TV, NBC has made recent moves, with new local digital and out-of-home initiatives, to bulk up its local TV business --so much so that it has eliminated a division with TV in the title. "At NBC Universal, we don't even have an NBC television stations business anymore--even though we own NBC stations. Our group is now called NBC Local Media. Broadcast TV is only a part of what local media is about."

Discussing new forms of content competition--user-generated video content and other new media platforms, for example--Zucker said: "We have to do a better job of finding that material. I'm not sure we are doing a good enough job yet."

Calling for a total revamping of federal rules, Zucker believes the Federal Communications Commission needs to change outdated regulations, especially where cable networks have one set of rules and broadcast networks another. "Something that airs on channel 3 in New York on cable has very different rules than what airs on channel 2 and channel 4. It doesn't make any sense. The rules they chose to enforce because of the political whims of the day seem very outdated."

Zucker also addressed the perennial question about whether General Electric was thinking about selling NBC. "As things have improved with NBC Universal and NBC prime time, those questions have subsided. It's all about performance. If we perform, the question goes away. If we don't perform, they should sell us."