NBC leads a different upfront charge
NEW YORK -- Meet the Press host Tim Russert doesn't play a comic straight man, at least not intentionally. But he found himself thrust into that role last week when he passed Kitt — the talking car from NBC's upcoming revival of the action drama series Knight Rider.
"I will race you anywhere, any time, Mr. Russert," the car's robotic voice told the newsman, who gamely smiled. "You don't frighten me. Shouldn't you be interviewing a politico or something? And by the way, they told me that I'd get (MSNBC's Chris) Matthews. How did I get you?"
That awkward interchange wasn't quite what NBC Universal CEO Jeff Zucker had in mind in February when he decided to scrap NBC's annual Radio City Music Hall show to present its fall prime-time schedule to advertisers.
He intended to make an important point by putting a tent over the Rockefeller Center skating rink on May 12 and herding ad buyers through what the company called the NBC Universal Experience — an extravagant collection of exhibits promoting the company's broadcast TV, cable, digital media, movie and theme park assets.
Zucker wants to change the way the General Electric-owned ge media giant and other broadcasters do business as they enter the frenzied weeks when networks typically sell about 75% of their ad time for the prime-time season that begins in September.
Specifically, he wants to scrap the idea that broadcast TV matters only in a September-to-May season. He also wants advertisers to cut deals to slap messages on multiple NBCU properties, not just NBC's prime-time shows.
"The world has changed," he says. "Our competition is not just broadcast networks — it's cable networks and video games and online social sites. If we're going to wring our hands over the fact that we want the days of the three broadcast networks to come back, then we will get left behind."
The NBC Universal Experience represents a departure from the industry norm: Networks typically invite advertisers to presentations in which executives introduce their prime-time shows for the fall and trot out stars to mingle with the buyers at extravagant parties with abundant supplies of liquor and shrimp.
NBC kept the party and the stars. But the No. 4 network also was eager to promote its efforts to address the technology-fueled change that has swept the industry — and gave USA TODAY a rare opportunity to accompany Zucker as he made his sales pitches to executives, clients and anybody else who'd listen at this vital annual rite.
The early, or "upfront," sales provide security for everyone: Advertisers know how much air time they can count on, and how much they'll have to pay, as they plan to introduce new products or promote existing ones. And they give networks an idea of how much cash they can expect — and how popular their shows must be for them to collect it.
It's hard to say whether Zucker's changes are driven by boldness, desperation or a little of both. Whatever his motivation, it's one that others in the industry might share.
ABC dis, CBS cbs, Fox nws, NBC and The CW collectively lost 3.4 million viewers in the season that just ended; NBC's audience fell 9%.
That's one reason the networks could see as much as a 14% drop compared with the $8.9 billion that advertisers committed last year in the upfront sales period — which begins in mid-May and ends by July 4 — Merrill Lynch analyst Jessica Reif Cohen forecasts.
Her gloomiest scenario projects a 13% drop in NBC's upfront sales, to $1.57 billion, while her cheeriest one anticipates a 1% slip to $1.78 billion.
The November-to-February strike by Hollywood screen writers compounded the damage. It dried up the supply of new scripted sitcoms and dramas. In addition, it derailed network plans to produce sample episodes — known as pilots — of new series that advertisers usually want to see before they buy air time.
Zucker saw that as an opportunity to change sales practices that now seem archaic. Instead of waiting until May, NBC introduced its new shows to advertisers in meetings in early April. In contrast to the upfronts, the network calls its presentations "InFronts."
ABC late-night host Jimmy Kimmel joked at his network's show for advertisers that NBC chose the name "InFront" because "they'll be just in front of The CW"— the broadcast network that attracts fewer viewers than NBC's USA Network cable channel.
Meanwhile, instead of producing pilots for all of NBC's new series, it asked ad buyers to evaluate some of them on the basis of several scripts. That saves money. Since the networks produce pilots around the same time, they often engage in bidding wars to land top actors, writers and directors.
But the change means that advertisers can't see whether there's chemistry between key characters, or if jokes that look funny on paper generate laughs when they come out of an actor's mouth.
Zucker says that "advertisers have told us that they were far more excited about the prospect of being able to read four to six scripts. What happens so often is that the subsequent episodes don't represent what the pilot looks like."
He also could cut costs, and increase the odds of turning a new series into a hit, by introducing them outside of September and October.
There'll be some changes made
The notion of a broadcast season goes back decades: Networks liked to grab viewers as their lives return to normal after their summer vacations — and as auto companies, who are big TV advertisers, roll out their new models.
That's changed, though, as companies increasingly introduce cars and trucks other times in the year, especially the spring.
Meanwhile, viewers — who now typically receive more than 100 channels— often feel overwhelmed by the barrage of new shows in the fall.
"With all of the viewing options available today, it often takes a full season or more for viewers to even become aware of a new show, much less start watching it," Magna Global analyst Steve Sternberg wrote in a report this month.
This fall, NBC will bring back three of this season's freshman series —Chuck, Lipstick Jungle and Life — none of which was a full-fledged hit.
It's no wonder that Zucker is eager to have advertisers look beyond NBC's struggling prime-time shows. "NBC Universal is about much more than NBC," he says.
NBCU generated $15.4 billion in revenue in 2007 — down 4.8% vs. 2006, a year when the network benefited from the Winter Olympics — with operating profit of $3.1 billion, up 6.4%.
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.
Zucker was eager to remind advertisers that "you 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 Hulu.com, you can buy integrations into our films, you can buy integrations into our theme parks."
CBS made a similar pitch to advertisers to consider package deals with its TV, radio, digital, billboard and publishing assets.
The rhythms of the TV business change slowly, though, even as advertisers warm to growing options.
"Individual shows, program quality and anticipated ratings all still drive deals," says Steve Calder, chief media officer for ad-buying company MediaHub from Mullen.
That's the kind of thinking Zucker hoped to change in February when he decided to construct the NBC Universal Experience.
"I'm sure there'll be parts of it that will work, and parts that won't work," he says. "But there won't be four others like it."
The change provided comic fodder for NBC late night host Conan O'Brien, who delivered a brief monologue for the crowd.
"When I first started with this company 15 years ago, the NBC upfronts were held in prestigious Avery Hall (in Lincoln Center)," he told advertisers at the event. "Then they moved to historic Radio City Music Hall, a beautiful majestic palace. Now, we're all standing in a soggy tent outside the NBC Store. I hope to see you at next year's upfronts at a falafel stand on 49th Street."
Zucker says the event cost under $5 million, in line with the network's previous shows. "This is not about saving money. … This is for you to get a sense of who we are and what's available. There's no deal-making. There's no pitching. This is who we are."
Good-looking folks
Judging from the Felliniesque blend of the serious and the absurd at the NBC Universal Experience, the company is a tangle of contradictions — except when it comes to models.
Advertisers mingled with some of the briefcase models from Deal or No Deal, models from Oxygen's The Janice Dickinson Modeling Agency, models pretending to be contestants on NBC's American Gladiators. The gathering also featured sportscaster John Madden autographing footballs, live CNBC broadcasts with Maria Bartiromo, displays of cellphones, and clips from upcoming films, including Mamma Mia!
Zucker seemed most comfortable sharing the spotlight with his stars. He joshed with 30 Rock's Tina Fey, accepted cheers from the cast of Heroes, and joined celebrities including Lipstick Jungle's Brooke Shields and Law & Order's Sam Waterston in front of a phalanx of photographers on the red carpet.
That's not the kind of environment that the Florida-born Harvard graduate imagined he'd oversee in a career largely spent in journalism. "It's show business," he says. "That's what this is."
That being the case, he had reason to be pleased by some of the reviews of the NBC Experience.
"It's not the cold, huge 5,000-person event at Radio City Music Hall," Andy Donchin, national broadcast director at media-buying agency Carat, says. "You could interact and ask questions."
Reif Cohen says that while, "I can't say that I 100% 'got it,' it was different. I really made an effort to see it because there was a unique factor. People will remember it."
Contributing: Laura Petrecca