When Warner Bros. Discovery CEO David Zaslav wanted to make a big splash at the company’s front last spring, he used words designed to dazzle an audience of ad buyers.
The newly merged company, he declared, would now stand “shoulder to shoulder” with the broadcast networks in terms of scale and reach. Three decades after Fox became the fourth largest network, Zaslav said, WBD “makes number five.”
Today’s news from NBCUniversal suggests that not everyone is as excited as Zaslav to be part of the broadcast club. A person familiar with the NBCU conversations confirmed to Deadline that executives are considering a plan to potentially cut an hour of primetime programming each night and give the 10 pm block back to affiliates. The Wall Street Journal This was the first report of that discussion.
No final determination has been made and the earliest a move will be 2023.
The news follows a similarly intense outlook for The CW as it is mostly owned by Nexstar Media Group. Nexstar executives told investors last week that the company will try to turn a profit on CW by 2025. “It’s no secret that the CW is unprofitable,” said CFO Lee Ann Gliha, “but that’s not typical for a fully distributed broadcaster. or cable network. In fact, according to SNL Kagan data, no other broadcast network has consistently run at a loss.
Tom Carter, Nexstar’s president and COO, said the company would be financially rigorous “unlike other broadcast network owners” and promised “lower unscripted costs” and divestment from the company. Riverdale The network’s signature scripted lineup.
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Cost is a concern for all broadcast network owners, especially as they look to fulfill their streaming ambitions. NBCU’s Peacock, which launched two years ago, is doubling spending on content to $3 billion this year, rising to $5 billion in the coming years. If NBCU scaled back to primetime, given the secular decline in pay-TV bundles and linear ratings, it could save money previously invested in original shows intended for broadcast.
Rapid cord-cutting and the explosion of streaming options have robbed broadcast networks of much of their mojo outside of sports and non-scripted programming over the past decade. As media companies restructure to reflect a blended focus on streaming, cable and broadcast, it no longer makes sense to have the lead dog pulling the sled.
“Networks are at an inflection point in terms of spending,” said one broadcast veteran. “Live sports have emerged as a key driver going forward and their high prices are putting pressure on the cost of the rest of the lineup. The question is whether affiliates will like fewer hours of primetime network programming.
“We’ve said from the beginning since we launched Peacock that we’re taking a different approach than everyone else in the streaming business,” NBCU CEO Jeff Schell said on Comcast’s first-quarter earnings call last April. “We don’t really look at Peacock as a separate, distinct business. We think it’s an extension of our existing TV business and that’s how we manage it. That’s how we built our business. How we program it. That way we sell ads both linearly and in Mayur.”
The NBC affiliate, headed by Eric Meyerowitz, EVP and group head of Hearst Television, has been an uneasy group in recent years. Since the company paid in Peacock, it has renewed its longstanding relationship with the NFL, including a $2 billion-a-year contract for a decade. NBCUniversal also agreed to be one of three companies to spend a record $7.5 billion on Big Ten games, including some exclusive games for the Peacocks. Both of those mega football deals come into effect next year, meaning retransmission consent fees are likely to rise. At times, even in an environment of diminished ratings, NBCU’s moves have met with resistance. In January 2020, when the company announced that it would allow Peacock Premium customers to gain access Tonight’s show Jimmy Fallon and co late at night As Seth Meyers started at 8 p.m., associates grumbled. Due to the Covid hangover, the plan has not been officially implemented yet.
Meyerowitz, through a spokeswoman, declined to comment on the potential impact on the NBC station when contacted by Deadline.
Disney’s late plans suggest that ABC could be a “logical player” for a lower primetime load, a senior media executive said, given plans by other networks. “They appear all-in on Disney+, ESPN+ and FX/Hulu.” A watershed move along those lines was the mainstay of re-routing Dancing with the stars on Disney+ after 30 seasons on ABC.
Insiders indicate that conversations at Paramount Global about any changes to the CBS lineup have not yet escalated.
An ABC representative did not respond to Deadline’s request for comment on the company’s approach to primetime.
As for how advertisers will process the changes in the legacy broadcast landscape, Brian Wieser, global president of business intelligence at major media agency GroupM, sees no particular cause for alarm. A large portion of the TV ad business, which has shrunk from a peak north of $70 billion several years ago, has shifted to streaming and is well positioned to continue. Peacock is now a billion-dollar-a-year advertising business, a plateau recently passed by Paramount’s Pluto TV and Hulu. Disney+ and Netflix plan to introduce advertising in the coming months, and HBO Max added a cheaper advertising category last year.
“That voice Like it’s a big deal, and some people are going to have a reaction to it,” Weisser said of NBC’s internal discussions. In reality, however, such a move would represent a redistribution at the margin. “What really matters to marketers is: Is there a continued investment in ad-supported programming? The answer is clearly yes.”
Citing numerous examples of NBCU-esque moves in the media business of late, including Warner Bros. Discovery, Wieser added, “Traditional networks have been defunding to fund streaming over the years.”