NBC U chief addresses Harvard Business School
NBC Universal chief Jeff Zucker swung by Harvard Business School on Wednesday and, in an unusually unguarded on-stage interview, offered some predictions for the media company’s future, an update on its Hulu joint venture, and some insight into recent deals with companies like Apple. Zucker was the keynote speaker at Harvard’s annual Entertainment & Media Conference.
Zucker expressed concern about the anemic revenues from online video distribution. “The economics around these digital properties are not yet fully formed — that’s five years away,” Zucker said. “We can’t trade today’s analog dollars for digital pennies.”
He seemed chagrined at NBC U’s dealings with Apple. Last year, the Peacock pulled its TV shows from iTunes after a dispute over pricing — the company wanted the flexibility to offer hot shows at slightly higher prices than Apple’s standard, and library content at a discount. Zucker conceded that the other distribution channels that NBC turned to, including Amazon.com’s Unbox service, haven’t been as successful as iTunes, where NBC’s shows were once among the most popular content. But Universal Pictures did pact with Apple last month to rent movies on the iTunes service. “Somehow,” Zucker said, “variable pricing is OK (with Apple) on films, but not on TV.”
Zucker branded Hulu, NBC’s joint venture with Fox, as an early success. Though the site, which offers free full-length TV shows, clips, and a few feature films, is still in beta-testing mode, Zucker said the response from advertisers had been “overwhelming” and “far greater than we expected.” Short video ads precede and pepper all Hulu content.
Asked by an audience member about simultaneous release of new Universal films across various media, Zucker said, “I think eventually that will happen, though I don’t think it’s imminent.” Zucker said Universal has a strong relationship with exhibitors, but reiterated that he thought the scenario was inevitable.
Zucker said he is managing Universal Studios “for (profit) margins,” rather than for box office market share, and suggested that he was happy for the studio to hit doubles and triples, rather than swinging for the fences.
One business school student lobbed Zucker a financially-detailed question about The Weather Channel, now on the block, noting that the digital side of the business may be worth more than the broadcast side. “Obviously, (The Weather Channel) is something we would look at,” Zucker said, before indicating that he wasn’t comfortable with the $5 billion price tag that has been tossed around.
Later in the conference, NBC Universal digital media VP Jessica Schell noted that the company recently decided to increase the size of the Peacock Equity Fund, which invests in new media businesses like Popsugar and WorldWideBiggies, from $250 million to $1 billion.
Zucker is an alum of Harvard University, where he was a year behind NBC late night host Conan O’Brien. Zucker admitted that, during college, he once had O’Brien arrested by the Cambridge police for stealing a historic chair from the office of Harvard’s daily newspaper, which Zucker ran.