Well, it’s been quite a week for NBC/Universal, a subsidiary of General Electric. Let’s review, shall we? Universal Music Group, fresh from their deal with YouTube to allow users to upload UMG music videos, announced they were going to sue Grouper and Bolt for allowing the same thing. The following day, at the behest of GE, NBC announced a series of drastic cost cutting measures, aiming to save $750 million dollars at the perennial underdog network. This last one, clearly the culmination of months of bad mojo at 30 Rock.

The bellweather, the red flag, the smoke signal that I’ve been using is Bob Wright, NBC chairman. He’s been giving a lot of interviews lately, saying increasingly weird and desperate things. I had never given Bob Wright any thought, and suddenly he’s become “crazy old Bob Wright.” This man has seen the writing on the wall, and the moving finger pointed at him. He’s not going down without a fight.

As I predicted a few months ago, the big networks are going to be scaling down to something a little more like their basic cable brethren. It is inevitable. Networks are losing market share to basic cable, DVD, video games, even READING. And smaller viewership numbers means lower ad revenues, which means less money coming in, which means well, what?

NBC is making three pretty obvious moves, and I think we’ll see those duplicated eventually at CBS and ABC and Fox. The first one is closing down remote offices. A Secaucus New Jersey studio which housed CNBC is being moved to a couple of vacant floors on the NBC Building in Manhattan. Secondly, NBC is going to more tightly pool their field reporters. File a story for the Today show, and you’re also filing for Scarborough Country. And finally, of course, more reality shows and less scripted shows.

NBC is losing money right now, and GE doesn’t like that. But the other networks will be losing money of their own soon, so don’t laugh at NBC. As for Universal Music Group, well the music business has been in a little tailspin of its own, and they they think that the way out is to more rigidly enforce copyright. I happen to disagree with that, but they have to do something to change the strategy they’re using, because it doesn’t work any more.

Does this mean the demise of NBC? It would be the first time a major national network left the field since Dumont in the fifties, but I bet the idea was on the table at GE. After all, the only profitable part of NBC is the news division, and that’s represented extensively on basic cable. But GE is not a sudden-moves kind of company. They’ve just made this change, and there is a two-year goal attached to it. NBC the network will be around at least that long, and probably a lot longer. If they can streamline operations enough to get back into the black, I bet GE will keep it going even if it’s clearing the narrowest of profits. So SNL will keep going, and so will the 20 or so shows NBC has about SNL. Just remember, that a future without NBC is still entirely thinkable.

I guess to sum up, we can say that network TV is going to take a prestige hit. The shows will look cheaper and have less star power, with more reliance on talented unknowns. It’s still a great business to get into, but the boom years are over, baby. If you’re creative, and you have a mortgage, maybe you ought to look into advertising instead.

This entry was posted on Wednesday, October 25th, 2006 at 2:32 pm and is filed under General, Music, Television. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.