Saturday, May 24, 2008

NBC-U's New Upfront Approach

[Y]ou can buy mobile, you can buy digital, you can buy cable … you can buy Olympics, you can buy football — you can buy the Super Bowl — you can buy, you can buy integrations into our films, you can buy integrations into our theme parks.

--Jeff Zucker, NBC Universal CEO

In David Lieberman, "NBC Leads a Different Upfront Charge," USA Today, May 23, 2008

Zucker's comments reflect the changes taking place in American television, and he's trying to change advertisers' perception of his company during the still-important upfront. That's the summer period during which the big networks typically sell 75% of their ad time for the coming television season that begins in Septemer. Executives of the major networks are trying to show advertisers that, like so much of the rest of the media, they can provide them with audiences that they want with efficient prices across a gamut of platforms. In Zucker's case, the aim is to draw attention not only to the range of new exhibition points for NBC shows--such as to the areas of NBC Universal that actually generate more growth and profit than the flagship NBC network. The USA Today article notes that "NBC, the network, contributes less than 10% of NBCU's revenue. And Zucker says that NBC's prime-time shows — the series that attract so much attention — account for 25% of the network's revenue, but 5% of operating profit. By contrast, cable networks — which include USA Network, Bravo, MSNBC, CNBC and Oxygen — account for 25% of NBCU's revenue and 50% of profit. About 5% of NBCU's sales come from digital properties." As Zucker says, "The world has changed. Our competition is not just broadcast networks--it's cable and video games and online sites."

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