Posts Tagged ‘nbc universal’

Zucker has no grasp of this “new world”

Thursday, 28 February 2008

There is so much to pick out of Jeff Zucker’s comments at HBS Conf, I’m going to have a stab at a bunch of them.

Firstly, in the video he states he is not an expert in all this new world. Well, as the CEO of NBC Universal, I think he really needs to grasp the fundamental economic concepts. Don’t you?

On piracy – “…If you come up with an idea and it gets passed around without you getting paid for it or credit for it or whatever you’re interested in, then you’re the loser. “

People are predominantly pirating because of huge nuisance costs. (sorry to link to my own stuff but here is a previous post on Dan Fawcett at Fox talking about piracy). In summary, people pirate because; they don’t know if they will like something, advertising sucks, distribution windows suck, pirated stuff is easier to move across devices.

On the internet as a distribution platform – “What we know historically is every time there’s a new avenue of distribution, that’s good for the consumer. I think it’s additive to this whole process, I don’t think that cannibalizes what we have.

He’s right, it probably doesn’t today, but the internet is not a distribution platform. If he thinks it is (he talks about ubiquitous content in the video), he will end up spending money like Rosenblum at Warner on marketing. The cost of production is falling. The cost of distribution is zero. There is so much competition, the signal wont be heard through the noise. On the internet the experience demands to be different.

On revenue models – “Embedded ads, product integration, “

Is that the best you can do? You are talking about the most interactive video experience platform ever created and you are going to do what you did in oldteevee?

On cost of streaming – “Frankly there’s one person interested it — there’s streaming costs, you have to cover it — but that’s more than we would have had before that.”

[Mostly] it’s not streaming, it’s progressively downloading [that’s me being picky]. The economics quoted aren’t really important. The marginal cost of adding one download is $0.0025 = free. Again, I think as the CEO he should really understand the fundamental economics of this new world he talks of.

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