NBC Universal president and CEO Jeff Zucker on Monday said the media and entertainment industry is continuing to make slow progress in monetizing content in the digital space.
He also said his team has underinvested in the NBC network, but has begun reversing that trend as it looks to improve NBC’s fortunes.
“We have underinvested in development [at NBC Entertainment] over the last few years,” he said. “That has been a mistake.” He expressed hope for a turnaround in the coming years and said that would be an important goal with or without a sale of NBCU.
Zucker closed out the first day of the 37th annual UBS Global Media & Communications Conference, which Comcast chairman and CEO Brian Roberts had opened, to a full room.
One investor asked for an update to Zucker’s famous comment a few years ago that for every analog dollar, media companies are making only digital pennies, which he had updated to dimes instead of pennies last year.
“We are making progress,” Zucker said, but added the industry isn’t quite at the level of digital quarters yet. “I’ll give you a quarter, but I’ll need a little change,” he said. The industry is doing better every 6-12 months. “It’s just not where it needs to be,” he concluded.
After Comcast executives earlier in the day said the system of local TV affiliates won’t go away, one investor reminded Zucker that he had previously suggested there may be no more affiliates in five years.
“The affiliate system has served us incredibly well [but] has been under assault these last few years” as the digital revolution has taken its toll, he said. He signaled that he might have to extend the time horizon he had mentioned in his previous comment.
Asked later by reporters about the future of the Jay Leno Show, Zucker said, “We are not going make any quick decisions,” even though his team will continue to look at the situation.
Zucker spent much of his on-stage appearance at the UBS conference touting the opportunities of the enlarged NBCU that last week’s deal with Comcast would create.
“We will be a better company because of this move,” Zucker vowed. “It gives us a bigger chessboard to play with.”
He did not, however, provide specifics beyond once again hinting at cross-promotional opportunities, getting more out of the combined sports networks and the ability to try new business models in the digital age.
Speaking of sports, he said: “Nobody should think this is another ESPN.” Zucker echoed earlier comments from Comcast COO Steve Burke, to whom he will report, when asked if the combined NBC-Comcast networks can take on Disney’s sports juggernaut.
ESPN is “best in class,” but capturing more money in the attractive sports business is still an upside opportunity for the enlarged NBCU, Zucker said.
He also gave his studio business a vote of confidence. While acknowledging the need to turn around Universal Pictures, which “had a bad year” because it spent too much on films that underperformed, he highlighted that the studio had its best and most profitable two years in 2007 and 2008. Overall, he predicted it will return to a strong performance.
Zucker also said his General Electric bosses have been “great stewards,” but he is excited to work for a majority shareholder that is “100 percent focused on media.”
Confronted with rumors that he may not stick around as CEO under Comcast’s leadership, Zucker said: “They have asked me to stay on as CEO of the company…Yes, they have asked me. Yes, I have accepted. And yes, I am looking forward to it.”
Zucker also faced the question of whether content and distribution can mesh well under the same roof in the wake of failed past media mergers. Just because content and distribution haven’t worked together in certain cases, it doesn’t mean a combination can’t work if managed correctly, he said.
He didn’t answer if the Comcast-led NBCU will be the best-positioned media company beyond saying it will be “very well positioned.”
Asked about NBCU’s focus in recent years on building its cable channel business, Zucker said the cable network is a “superior” model, but the firm hasn’t gotten full credit given the first three letters of its name, which forever tie the firm to broadcast TV. The company overall wouldn’t have grown as nicely as it has if his team had not made the transformation and grown the cable side of the business, he added.
Zucker drew some laughs when he congratulated UBS media and entertainment banking head Aryeh Bourkoff for helping to keep the Comcast deal under wraps for most of the year. UBS was a co-advisor to Comcast in the deal that had over the past two months become the industry’s worst-kept secret.