Arguing with Zeff Zucker

by Paul William Tenny

NewTeeVee has lots of sound bites from NBC's Jeff Zucker's talk at the Harvard Business School a couple of days ago. For whatever reason, it seems like the main qualification to be a CEO is the completely inability to adapt to changing markets, with an irrepressible urge to hang onto the past as long as humanly possible, regardless of the consequences.

Zucker fits that mold quite well, based on some of the crap coming out of this guys mouth. He's still mad at Apple for rebuking NBC's attempt to raise the price of TV shows (only for NBC to start streaming them for free), apparently doesn't know net neutrality is, and wants everyone to believe that the writers strike was a lose/lose situation -- which of course isn't true. None of it is, actually, so let's just look at this point by point, shall we?
On the role of broadcast news:

"We live in a blogosphere world, and we live in the world where news and the definition of news is very different than it was 5 years ago, let alone 10 or 15 years ago. I don't imagine there's many people in this room who watch the 6:30 news...The definition of NBC news is really changing and becoming MSNBC and"

The definition of news has only changed because the standards we demand for excellence  in journalism have sunk so low that you'd have to be puking in the gutter to even notice that they were there. It has been noted that the mainstream media's idea of what journalism and news is, is writing down what people say, kicking their feet up, and calling it a day. No investigations, fact checking, or holding peoples feet to the fire when they give an answer to a question that nobody asked, or refuse to answer tough questions at all. That's very different certainly than what it was ten years ago, but certainly no different really than much of the past seven years.

Indeed, pawning off primary news to 24 hour cable channels that are on averaged watched by less than one or two million people is precisely what this ridiculous anti-journalism government has allowed the networks to do. If MSNBC and are what are to become of our cherished news sources, then I think it's high time NBC, CBS, FOX, and ABC either surrendered their broadcast licenses, or start paying for the right to use the public airwaves. In this country, they get to spectrum for free that would otherwise cost potentially hundreds of billions of dollars -- for free -- with the caveat that they cover news in the interest of the public, from which they are getting a free ride.

If they want to move all news operations to cable and the web, that's just fine by me. NBC: your check for $100,000,000,000 will be due by the end of the week.

On the writers' strike:

"The writers' strike was unfortunate, it lasted too long for everyone I think. I don't think there's any winners when something like that happens. At the same time I think it gave many of us an opportunity to reflect on how we run our business and to question whether there were changes that were long overdue. Hollywood is a town that's built on inertia and there were a lot of mansions built on that system

I find Zucker's choice of words in that first sentence mildly enlightening. "It lasted too long for everyone" would intimate that there was an acceptable length of time for a strike to last, a length of time during which certain financial losses and other collateral damage was acceptable. I don't know any writer that thinks a strike is ever good, or that the negative ramifications are ever acceptable on any level.

It seems certain that billion dollar conglomerates on the other hand deal in those terms on a daily basis, and were perfectly comfortable causing incredible damage to the L.A. economy and people's lives for a predetermined length of time, purely as a gambit.

The notion that there weren't any winners is also fairly detached from reality. The writers won, and unquestionably so, by getting virtually everything at the top of their list of demands. The AMPTP companies lost hundreds of millions in ad revenue and drove away a significant number of viewers in the process that probably won't come back, which is precisely what happened in the (88?) strike. It also remains to be seen if NBC and the other networks and studios will have truly changed their ways.

"Some of the changes we are instituting is that there's going to be less overall deals with writers, we're not going to put all that money upfront onto holding onto those writers, we're going to let the market determine it.

Perhaps this is something that Fox could do, but not NBC. Zucker's company is in far too a precarious position to allow top talent like Tim Kring walk off with his next brilliant idea when they could lock him up for the foreseeable future. I'm not even sure that it's workable, even if NBC put serious effort into pissing off writers when they need the best ones they can get their hands on right now. Zucker said that "a number of competitors have now stepped up and say that they're going to do the same thing" but if anything, competitors are going to do exactly the opposite to gain an advantage, otherwise it wouldn't really be competition.

If even three of the networks stand up and say no more to overall deals for writers in television (but apparently not film?) then the fourth is going to pull in all that free agent talent and lock them in until hell freezes over, and then just steamroll the other three. That's what happens in a free market, that's what happens every single time. Baseball owners say every year that they aren't going to hand out long-term expensive contracts to mediocre players every single year, and every year they fight each other over who can give out the longest, most expensive contract in the history of the game.

It happens every year, and television is simply no different. It also smacks of punitive, adolescent punishment for the strike, to be frank. All it does is anger NBC's top talent while putting them in a position of weakness in competing for that talent.

On Warner Bros. TV President Bruce Rosenblum's comments about studios evading networks to go straight to viewers online:

"I don't think that that's gonna happen any time soon. There's still nothing that aggregates an audience like network television, broadcast television, if you're an advertiser, and you want to reach a large number of people...If Warner Bros. wants to bypass the networks, they're never going to be able to produce a program of the quality of ER or Friends. Digital distribution is opening up tremendous new avenues for everyone, but I don't think it replaces the broadcast networks, the cable networks.

This seems to be the prevailing view and if not just because change takes time, at least for now, Zucker is right. If a studio that doesn't have an incestuous relationship with a network (very few these days) via having the same corporate parent wants to break out of the system, they'll need to produce some pretty magical content, although E.R. and Friends are terrible examples. Think more along the lines of CSI. I don't think serial dramas or well-traveled formula shows are going to do the trick, and the only reason I say CSI after just saying that is because for whatever reason, CSI has incredible appeal across a wide age and geographical demographic.

There are also significant technological hurdles to having that many people regularly watching shows online. In all likelihood, I think you'll need to see an extreme level of convergence before you'll see an "online" show tackle a top performing network show. Essentially, you'll have to be plugging an ethernet cable into the back of your flat-panel TV, and not think of *that* as any different than screwing in a piece of coax. Really what you're talking about at that point is replacing satellite, cable, and over-the-air broadcast with the Internet as the physical distribution network for television entertainment.

It won't really ever be about 21 million people launching in order to get their latest fix of House. We're so far off from having that kind of an experience that we'll both be too old to watch TV by the time it happens.

On net neutrality:

"I think piracy of intellectual property is a huge concern. If you come up with an idea and it gets passed around without you getting paid for it or credit for it or whatever you're interested in, then you're the loser. I do think that's it incumbent upon the leaders in this country in this area to stand up and protect intellectual property."

Either Jeff Zucker or NewTeeVee doesn't know what net neutrality is, because I'm pretty sure the lead-in for that one doesn't say "On piracy." That's just fine with me though, because I'm not the least bit interested in what Jeff Zucker or NBC thinks about regulating the Internet at an engineering level.

On Apple iTunes:

"I got into a pretty public fight with Steve Jobs about our TV. We were the market share leader at iTunes, we had 35 percent of the market share at the iTunes store. What we said to Steve and his team was that we wanted there to be some variable pricing. There's no example in the world of where the retailer sets the price -- there's no example, except at Apple. We're very conscious of what happened in the music industry."

It seemed pretty obvious that by variable, NBC really meant higher. I think that's pretty silly since right now, all TV show episodes on iTunes and Amazon are overpriced. $1.99 per episode would round out to $43.78 for a season, in many cases quite a premium over what the season would cost on DVD. And lets not forget that online TV eps and music are not adjusted for true market value after initial introduction. I recently bought the third season of Stargate SG-1 for $15 including shipping, but I bought it on iTunes, I'd be paying almost $23 more.

If Zucker really wanted to up the cost of these shows, I think Apple was right to balk. From what I've heard, Apple actually wants to charge less for music and TV shows, and I agree. Now if NBC wants free reign to gouge people, they should be and as they have demonstrated are free to do so. But then what sense does it make to go and give that content away free by streaming it?

As for being "very conscious of what happened in the music industry", the studios made all of the same mistakes. They fought digital sales, rejected new business models, wrapped everything up in DRM (which the music labels are now all abandoning in droves) and still don't "get it." These companies are monoliths determined to hold on to the past at all costs.
in Digital Media, Feature, Streaming Video, Television


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