As part of his affiliation relations duties, NBC TV Network President John Eck has a plan he views as adventageous to both the stations and his network while meeting the challenges of the evolving TV marketplace. NBCU is offering affiliates a long-term agreement (the Gold option) that makes the network and the affiliate full partners not only in broadcasting as they are today, but also in local online media and mobile DTV with NBC representing them in retrans negotiations. If that caveat is not to their liking, they can opt for shorter-term Silver or Bronze deals.
NBC TV Network President John Eck wants the NBC affiliates to go for the gold.
The gold, in this case, is a long-term agreement that makes the network and the affiliate full partners not only in broadcasting as they are today, but also in local online media and mobile DTV.
There’s just one catch. To be gold — to be full partners — affiliates must allow NBC to represent them in retransmission consent negotiations with cable and satellite operators and share the retrans revenue with the network.
The affiliates can opt out of the retrans piece, settling for what NBC calls bronze or silver relationships, but at the cost of a long-term agreement.
Eck wears many hats at NBC Universal. As president of the NBC TV Network and Media Works, he is responsible for NBC affiliate relations and operations; IT, studio operations for all of NBC TV properties; film and TV production and post-production operations; environmental health and safety; and crisis management.
In this interview with TVNewsCheck Editor Harry A. Jessell, Eck speaks as network affiliate chief of his hopes for re-aggregating the fractionalized NBC audience by binding the network to its affiliates more closely, at more levels, than ever before.
An edited transcript:
At the May affiliates meeting, NBC outlined three levels of relationships it would like to have with the stations going forward — gold, silver and bronze. Can you elaborate on that? What’s involved with each of those tiers?
Bronze is basically what we have today: linear over-the-air broadcasting with inventory splits. We offered the chance to work together, looking at the 5 p.m. to 7 p.m. time period and exploring the use of NBC Universal’s broader capabilities.
The silver package would add in a number of different digital opportunities — Internet, wireless and video on demand. There would be inventory splits on those platforms, too, and promotion commitments and a different financial equation.
Then, with the gold package, we would work together on all of those things: linear plus digital plus partnerships with cable, satellite and telcos so that we’re in alignment on all platforms in all ways for distribution.
I get the bronze level. Can you give me an example of how on the silver level you would work with the affiliates on the Web?
Right now, our affiliates don’t get any inventory on NBC.com or Hulu. We are offering that or a revenue share. What we’re offering is the chance to align our interests so that when the affiliates promote The Office on Thursday night at 9 o’clock, they’re benefiting from all of its runs as a part of the NBC ecosystem. We are offering to make them our true partner in all forms, not just in the original airing on the broadcast network, but in all subsequent opportunities for the consumer to use our content.
Now what about the local Web sites?
Well, as a part of our silver package, we will also offer what we call NBClocal.com, which is more of a culture-and-life-style and mood-of-the-city Web site branded around NBC. It would be about what the city is talking about, what the people are thinking about. We’re offering that as a revenue-sharing opportunity in exchange for cross promotion. We’re happy to have the conversation about consolidating technology for all the NBC affiliates. We can do that. We can add a lot of value, but it’s hard to do.
So there would be an NBClocal in each market where an affiliate wanted to participate — NBCCharlotte, NBCNashville, NBCPhoenix, etc.
Yes. If you go to NBCnewyork.com, take a look at the Web site. You’ll get a sense of what I’m talking about. Our ambition is to have NBCindianapolis.com and similar sites in other markets. We would curate the sites centrally and then split inventory. What we want to do is re-aggregate the NBC audience as it fractionalizes on all these platforms. We think it is in our interest and in the affiliates’ interest.
What about multicasting? NBC has been offering Universal Sports as a multicasting network. Where does that fit in?
The more interesting play with multicast is mobile, but it may not play out for a few years.
So you’re more bullish on using the extra bits for a few mobile DTV channels than extra broadcast programming channels.
Well, at least one for sure. If we could offer NBC to a consumer in a train or a bus, moving through a city, or a consumer in the backseat of a car, that’s a good thing. If we can get the Today Show to the mobile consumer, our nightly news to the mobile consumer, that’s a good thing.
What’s the business model for mobile DTV? Is it simply for each NBC O&O and affiliate to simulcast their regular broadcast channel?
That’s the only way I can think about it right now. We haven’t done basic research to know whether that is something the consumer wants You know, do they want The Office to run at 9 o‘clock on Thursday night on their cell phone? But my basic operating premise is that franchises like Today, Tonight, the Jay Leno show, SNL, sports, all of those would greatly benefit from reaching the on-the-go consumer.
The affiliates I talk to all seem to be talking about simulcasting, too. One of the questions that comes up is will they have to have the networks’ permission to simulcast the network programming.
It has to be granted.
So that’s part of the negotiation.
That’s part of the silver package. We invited all affiliates — whether our agreement is expiring this year or several years down the road — to talk about how we could modify the existing arrangements so that we could participate on more platforms together.
At an affiliate meeting in May 2008, you said you expected a share of the broadcasters’ retransmission consent fees. Where does that stand now?
You’re describing our gold package which is what we think really aligns all of our interests. We would have the affiliates’ proxy to work out a distribution relationship with cable, satellite and telco. We have way too much in common to work separately with each of the cable operators. If we can align our interests with cable satellite and telco over the long haul, we will be far better than if we go independently.
So you want to represent the affiliates in retrans agreements and split the take essentially.
Yes. That’s right.
How is that being received?
My sense of the feedback is that it has been extraordinarily positive. Last year, we threw it out there. I think that it was so new and so undersold that it was just not well understood. A year goes by and you talk about retrans and the future of broadcasting and the future or television. Now, there’s much more of an open mind about seeing that our interests are more aligned than apart. I really truly believe that we could come up with a formula that protects their interests, protects our interests and keeps us strategically aligned for a long time.
NBC put one big concern of the affiliates to rest at the May meeting. [NBUU CEO] Jeff Zucker made a strong, unequivocal statement that NBC has no intention of bypassing the affiliates by going direct to cable.
Jeff really means that, but there has to be a willingness and a commitment to cooperate in the spirit of this gold package. That was a very important element of what we were trying to articulate that day.
But by offering three tiers of relationships, don’t you expect to get affiliate participating in three different ways?
That’s what we laid out there.
So they have options.
They have options, but recognize that if you’re going to be a bronze, you’re affiliation arrangement is going to be much shorter term. We’d be willing to go long, long for a gold package. For a bronze package, we might not be able to go that long.
How do the affiliates feel about Leno these days?
I had many people tell me that his appearance was the highlight of all of the affiliate meetings they have ever been to — and how we articulated the vision and the tactical plans for Leno. We sought the input of all of the affiliates through [Post-Newsweek Stations President] Alan Frank and through Brian Lawlor from Scripps. We had anticipated most of their needs and we did almost everything that they wanted us to do. I think that the communications plans were very well received and the research that we did was supportive and said that this has a serious chance to work. We think there is a series of things we can do on a daily basis to earn the audience that will lead in to their late news.
What happens if Leno flops? Do you have a plan B?
We always have contingency plans, but, as we’ve gotten closer and closer to it, we feel better and better about it.
If it doesn’t work, would you consider giving the time back to the affiliates?
It’s not even on the table. It’s going to work.