CARLSBAD, Calif.--NBC Universal's chief executive said the changing economics of television means that networks have to change the way programming is done.
There's room for hits and there's room for inexpensive programming, Jeff Zucker said Thursday, speaking at the D: All Things D conference.
"What's gone is the middle," Zucker said. "You cannot sustain just average programming."
That also means shows have less time to mature, he said. Zucker noted that "Seinfeld" would probably not make it in today's environment, noting it did just so-so in an initial four-episode summer run.
"That doesn't happen anymore," he said. "It would be gone."
Zucker said that doesn't mean the era of hit shows is over. "There can still be hits in network television," Zucker said. "They don't last as long."
Asked about the fact his network is in third place, Zucker said that's obviously not where he wants to be. "We haven't done a good enough job of creating programs that people want to watch," Zucker said.
Broadcast is more challenging than cable, he said, because it only has advertising as a revenue stream. Another change, Zucker said, is that broadcast networks used to show episodes multiple times. Now the reruns are on Hulu and other places.
"We're at our core a cable company," Zucker said. Sixty percent of its cash comes from cable, he said. "The cable model is just a better model."
As for the economy, he said, "There is some light at the end of the tunnel."
Asked about Hulu, Zucker said it is ahead of plan and should be cash-flow positive soon. "The first 18 months was getting it up and not getting laughed at," Zucker said. "The goal over the next 18 months would be increased monetization." Hulu is a Web video service from NBC Universal and Fox Entertainment Group.
Zucker was also asked about his well-publicized spat with iTunes.
"We've always loved Steve," he said, referring to Apple CEO Steve Jobs. "It wasn't personal." But Zucker said NBC didn't agree that a library copy of the "Rockford Files" should sell at same rate as a new episode of "Battlestar Galactica." "The pricing wasn't fair."
"About a year later, Steve decided he was open to tiered pricing," Zucker said. He noted that 15 percent of NBC content sells at $2.99, the price consumers pay for HD content on iTunes.
Zucker said that iTunes, Hulu, and other digital businesses are small individually for NBC. "You do have to have 10 businesses like this that make up for the one you've lost."
He has said that the industry is replacing analog dollars with digital pennies. "I was just trying to be honest. I don't regret it at all because it was the truth."
"What I have said is we are now up to digital dimes. I think that's progress...We still have a 90-cent gap. Hopefully I can come back and in a year or two we will be at digital quarters. The more people understand where we are, the better," he said.
Zucker was asked whether he would put his shows on Facebook. "We'll put our shows anywhere, frankly. We want to be paid for it. That's what will allow us to keep producing shows like "The Office" and "30 Rock." If we can't get paid for them, we can't afford that cost structure."
As for teaming up with rivals on Hulu, Zucker said he wasn't worried about antitrust issues. "Half the day we spend bashing each others' heads in. Half the day we spend in business together."
Zucker said it is important for the industry to embrace technology so as not to end up where the music industry did. "I don't think you can put the genie back in the bottle." He said that if the company tried to air its content only on its network, people would find more ways to pirate the shows.
"You can't stop progress," he said.
Asked about Hulu's efforts to keep its service off TV sets, Zucker said: "Right now we are committed to Hulu being an online experience. That's where our vision is today. That will continue."
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