Earlier in the week, News Corp's Chase Carey set off a fire storm by his comments at Broadcasting & Cable's OnScreen summit, suggesting that Hulu needed to start charging for the service, perhaps as early as 2010 (Hulu later tried to distance itself from those comments).
Broadcasting & Cable's Ben Grossman interviewed Carey in its cover story, covering a wide range of topics. Here's a snippet:
Your boss says that the broadcast business simply can no longer be supported by ad dollars. So what happens next?
It's not rocket science. It starts with making it a dual revenue business. It doesn't make sense that broadcast is only ad supported. It competes against other channels that are dual revenue businesses that are getting 1, 2, 4 dollars [per sub], while a network like Fox, it sits there with truly the best programming in sports and entertainment, so we need to move that business to a place where we are getting fair value.
Les Moonves has been talking about retrans for a while, and now it seems News Corp. is ready to assume that leadership position.
We are focused on being a leader, and getting fair value for Fox. There has to be a logic behind this. If you believe right is on your side, you have to have conviction to stand behind what is right, and have conviction to get there. The broadcast biz has unique strengths it has to protect. But it's not going to be easy.
With NBC's Jay Leno move scaling back its costs, is that where network models are headed? Can broadcast networks continue to produce 22, or 15, hours of original content every week?
I don't think you can cost-cut your way to success. In many ways, what makes a broadcast network like Fox unique are events. There is no sure-fire way to say, let's just go and create hits. You can't cost-cut your way out of it; for us it is just saying, we have to get the best content out there, and you've gotta get fair value for content. We all say we don't want to trade analog dollars for digital pennies, and then we all go and do that.
nbc might be making a little more money off of leno, but they are becoming a joke in the process…
i wish they would accept that it was a big risk that is not paying off as a whole, in the way that they had hoped…
Love the “don’t think you can cost-cut your way to success” jab.
mark-allen, I would say it’s paying off for them the only way they care about – financially. I don’t see Leno going anywhere in the near future.
I agree that there’s no way to “guarantee a hit”, but at the same time is there anyone who thought “Brothers” would do anything but dismal? There is no reason to continue producing such sacraficial programs just to burn them on Friday nights and Sundays when nobody even knows it’s on.
And I know CSI started on Friday nights, but viewership on the night is not what it used to be on that night.
Murdoch “gets it”. A network needs events and hits and those cost money.
A little off topic for this site, but look at what Paul Pressler did to Disney Parks (late 90′s) and then to GAP (2002-07). Both companies intially profited, but ultimately the companies nderwhelmed and underperformed. Disney has had to spend billions to fix California Adventure which was largely Pressler’s park built on the cheap.
NBC Universal can take a page out of the Company that has the NUMBER 1 Demo Network and Number 2 in viewership the NUMBER 1 Cable News Channel and the NUMBER 2 Sports enterprise
It really doesn’t matter if the Leno Show isn’t paying off in “a whole”. The main objective was to cut costs and make money. It’s doing that. People can take jabs at NBC all they want to, but when those checks clear the NBC execs will be the ones laughing
Back in the ’80′s when NBC was in the dumpster, the joke was that NBC stood for ‘NoBody Cares’. They’ve *hored themselves out, and simply do not care. The revenue will be there. What I predict, is that, if Leno works, these hacks will put Conan on at 9:00 .
of course this is also FOX, which has NEVER had a full network schedule – I realize this is partially because of their initial agreements with their affiliates, but it’s also a form of *cough cough* cost-cutting on the network end to have one less hour of programming to pay for each and every night compared to your competitors.
Is this article serious, Of course it is after all it has Murdoch and his underlings waffling on about squeezing more money out of Americans.
He actually wants to have his cake and eat it as well. What a joke. The TV networks are doing just fine, despite them crying poverty at every available opportunity. They still make millions of dollars of profit. Though once again they are still not happy or satisfied. They also still need to realise that they need to actually programme shows people want to watch in order to increase their revenue. Shows like Idol, NCIS and many others are proof that shows can still get great ratings/demo despite DVRs, Torrents, Internet and Hulu.
So Murdoch, yes please introduce the Cable format of ‘dual revenue’, because rest assured Mr. M, that your revenue would plummet quite considerably. As if people would pay a subscription to Fox. Well only the gullible and considering how many Americans waste money on Cable each year he may succeed after all. At least temporarily, because despite what the majority of the world thinks of them, Americans aren’t that stupid, oh wait…..
Another running theme in Murdoch land is self delusion. I just love how he thinks it’s his right and duty to tax more people out of their money, in a recession, and that somehow they will swallow it all and give Mr. M a pat on the back. I mean they still think Glee, Bones and Fringe are hits. All they are are improvements on last years lacklustre scheduling.
Mike, hunny, please do not use the chessnut that Fridays are a wasteland. If netowrks actually put shows that people want to watch on Fridays then that would increase viewers and revenue dollars.
Fox does cost cut though they only have 2 hours of primetime a night
Mr. Halpert hits a smart note about Fox being a tad disingenuous since they only program two hours a night, but Fox also turns that third hour over to the affiliates. Fox affiliates, therefore, get to make some extra money from their hour long newscasts, which air when more people are watching, while NBC eeks out some extra nickels with Leno while dragging down their affiliates revenues for their newscasts.
So, on the surface, what Fox is doing may seem similar to what NBC is trying, but in reality it’s very, very different.
The idea that you cannot cost-cut your way to success is one that you will hear quite a bit in American boardrooms these days. Right now, there is a philosophical war going on between old school businesses that believe you can do that, and newer, more innovative businesses that believe it’s all about the product.
As for retran fees, that is the war broadcast nets should be fighting, and should have been fighting for years now. I wouldn’t be surprised if one of the very first posts I ever made on this site was on that subject. The playing field has to be leveled, and it will be leveled.
Washington will not let all these nets go down the tubes. One, maybe, but not all. It may be too late for NBC, but if they do fail eventually, watch how that galvanizes Washington into belated action.
What happened in this country were we demonize people who
make profits Rupert Murdoch owns the company so we have no right to tell him what he can or can’t charge it’s our perrogitave whether or not to consume his product. Do you realize how many jobs he offers this country excuse him for having a formula that works
Schmoker: You nailed it.