Lunchtime Briefing: Plucking the Peacock
After I filed my story last night, I kept thinking about NBC Universal's big news yesterday.
The company, which is owned by General Electric and includes the NBC TV network, Universal Studios, cable channels such as Sci-Fi and some theme parks, announced a $750 million budget cut and said it would slash 700 jobs, or 5 percent of its workforce, by the end of 2008.
The company said it needed to make the cuts to stay competitive in and be ready for the digital age.
In today's story, I wrote: "... the company must still foot the bill for its non-digital properties as it transitions into the digital world, much like dragging a huge and expensive anchor behind as it tries to sprint ahead."
The more I thought about it last night, the more I thought the anchor metaphor didn't quite convey the whole idea.
Yes, all traditional media companies--NBC Universal, CBS, ABC and so on--have realized they can no longer count on viewers sitting down at an appointed time the networks set to watch their shows. They must move into the on-demand era, and that means digital delivery--on the Internet, via mobile devices, whatever.
But the anchor metaphor might suggest, incorrectly, that NBC is getting out of the TV business.
That is not the case.
If I were looking for a metaphor--and I always am--I might say that NBC's announcement is the equivalent of trying to buy a second house in an up-and-coming neighborhood while maintaining the grand old house you've had for years. Your old house is full of servants, staff and amenities, and you've huge parties there weekend after weekend. Very Gatsby-like.
But now, fewer folks are coming to your parties and the neighborhood has gotten run down a little.
In order to afford this new house in the growing neighborhood where the cool kids hang out, you've got to scale things back a bit at the old house--let some staff go, have fewer parties.
The anchor metaphor did have the benefit of being shorter.
Network television is not going away. In fact, many critics think that we're in the golden age of television drama, if you look at shows such as the "CSI:" series, "Lost," "Heroes" and so on. For all the glory of YouTube and the like, I don't see anything on them that rivals the production quality, writing and acting of primetime network drama. People still want quality.
All these new digital distribution channels--the Internet, mobile devices--still need content. And networks create content. For a look at how the cost-cutting will affect what you actually see on TV, check out Lisa de Moraes's column today.
Elsewhere today, check out Sara Goo's story on Google's most recent quarterly earnings. It's almost like Monopoly money, the amounts they're talking.
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