Hey Zucker, Did NBC Get Money From Zenith For TVs All Those Years?

from the sour-grapes-and-bad-management dept

Tue, Oct 30th 2007 2:09am — Mike Masnick

It's been really disappointing to watch NBC make pretty much all the wrong moves in the digital entertainment space over the last few years. Recently, it's been getting more and more ridiculous in its bizarre attempts to blame everyone else for its problems -- and I think it's time to pin the problem squarely on NBC boss Jeff Zucker's shoulders. Zucker took over the top spot at NBC earlier this year, and immediately bashed YouTube just as other NBC execs were talking about how useful YouTube was, and how when embraced it was a huge opportunity for the company. Then, NBC execs started blaming ISPs and the government for failing to protect NBC's obsolete business model, even to the point of absolute ridiculousness, when a senior NBC exec had to say with a straight face that file sharing was harming poor corn farmers (despite the fact that corn farmers are doing quite well).

Zucker's latest blame target? Apple. Apparently Apple has "destroyed the music business." That's funny, most people would note that Apple actually helped to save the digital music business after Zucker's friends over at the record labels tried their best to kill it. Besides, Zucker's flat out wrong. As we've seen time and time again, the music business is doing phenomenally well in every single aspect, save CD sales. More music is being created. More music is being heard. More bands are making more money through touring and alternative business models. Businesses that sell complementary products are doing amazingly well as well. Musical instrument sales are apparently up significantly and lots of folks are spending tons of money on equipment to listen to music (sometimes to ridiculous lengths).

And that's the crux of Zucker's second problem with Apple. He's pissed off that the company picked the right business model, while his company picked the failing business model. That is, he's blaming Apple for selling iPods and not giving the entertainment industry a cut of the hardware: "Apple sold millions of dollars worth of hardware off the back of our content, and made a lot of money. They did not want to share in what they were making off the hardware...." In other words, Apple understood the basic economics of content and how that would play out inevitably in the trends facing the industry and NBC was caught clueless.

It's unclear why anyone should then feel pity for NBC. It screwed up, and it's blaming the company that was successful. The fact that Zucker is still lashing out and blaming everyone for his own company's failure -- and then asking the gov't to protect its business model rather than innovate -- suggests that he's the wrong man for the job. NBC should look to hire someone who actually has some sort of forward-looking vision, rather than a backwards looking protectionist who feels everyone else should pay up for his own failures. It shouldn't be a surprise that Zucker was bad news for NBC even before he took over. Last year he was quoted as saying that NBC clearly had a better business model than Google. It's possible that NBC could create a better business model, but the old, failing, obsolete one needs a big, big makeover, and blaming everyone else for your problems isn't a part of that process. I know that there are plenty of folks who work under Zucker who read Techdirt (sometimes they leave angry comments). Why don't you give us a call. We'll help you sort out your strategy.

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Filed Under: jeff zucker
Companies: apple, nbc universal

40 Comments

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Sean, 30 Oct 2007 @ 3:55am

What a dufos
Should I blame all the CEOs for picking the better paying job?
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Anon, 30 Oct 2007 @ 4:13am

A Step further?
Why not go a step further and blame the person who put Zucker in such a state of power that he could screw up THIS badly and THIS many times.
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Sam G., 30 Oct 2007 @ 4:17am

Radical Spark
New on this forum, not sure where to put this, you guys seem up on your tech companies: Radical Spark (www.radicalspark.com) is claiming to have this revolutionary web app, the next big thing, I hear people talking about it at conferences and such, speculating. Any idea what these folks are up to?
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Anon, 30 Oct 2007 @ 4:20am

11
Come on, you have 11 links in this article, and not one to the 'angry comments' left by 'folks who work under Zucker'.

Now that would make an interesting addition to this article.
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Anonymous Coward, 30 Oct 2007 @ 4:24am

Re: Radical Spark
online sales tools = SPAM + bullsh*t
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Anonymous Coward, 30 Oct 2007 @ 5:04am

Re: Radical Spark
Do you really think we are that dumb?
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HatesSpam-a-lot, 30 Oct 2007 @ 5:05am

Re: Radical Spark
Quote: Any idea what these folks are up to?

Probably about to go under if this is their marketing strategy...

On Topic:
Right - on! Zucker and all of his cronies just need to stop whining and figure out there own corner (so to speak) of the market. They have great content just use it. GAWD!
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Deirdre, 30 Oct 2007 @ 5:07am

The Name Sounds Familiar
NBC... I've heard of them... Oh yes, NBC, a member of NAB, who has preached the gospel of free TV for years. Over the air TV, that is. Apparently not "over the wire" TV.

I understand why one is free and one should be paid for.

With OTA, you have to build a million dollar transmitter, like WNBC, to cover a few square miles.

With WWW, somebody else pays for the server, fiber and all the distribution to cover the world.

Wait, I guess I don't understand after all.
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Moogle, 30 Oct 2007 @ 5:17am

Re: Radical Spark
Apparently what RadicalSpork doesn't do is offer lessons in not sounding like a badly rehearsed plant job. No one's actually talking about them but you, eh? :)

As for TFA, I'm sure NBC HAD a better business model, but it sounds like time to diversify. Hmm... They'd probably end up buying and mismanaging a popular startup. Were these companies this naive before they were giants, and just happened upon the newest thing by luck? Or did someone/somebusiness with money just ride a good purchase to the top?
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Wisconsingod, 30 Oct 2007 @ 5:51am

Edit yor artikles
Come on Techdirt.... "Besides, Zucker's flat our wrong"... that must of hurt!
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Laughing with Mike, 30 Oct 2007 @ 5:53am

So Apple made money unfairly by selling iPods that could display NBC's content? So I guess you could argue Zenith, Hitachi, Sony, etc. all profited unfairly by making TV's, DVD players, & VCR's but you don't see Zucker railing at those companies.
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comboman, 30 Oct 2007 @ 5:59am

Re: Radical Spark
Somebody please mow the astroturf.
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Wes, 30 Oct 2007 @ 6:03am

Big Media
I wish these silly people would fundamentally accept the economics of time. While they sit and cry that Tom, Joe and Harry downloaded the whole internet, they fail to realize that a person can realistically only enjoy one form of media at a time. So even if someone downloads all 400 episodes of Seinfeld, they can only realistically watch one of the programs at at time.

If I were in charge of big media my goal would be to increase the average media consumed per week.

I think they should move to a pay per view/listen model and solve all the entertainment industries woes.
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Danny, 30 Oct 2007 @ 6:11am

Of course Zucker is blaming everyone else for NBC's failures. In today's world (especially the corporate world) no one is at fault for their own failures. And I'm with comment #11. If Zucker believed his own nonsense he'd be leading the charge against manufacturers of every content display device in creation but since all those other manufaturers didn't rock the boat they are not being targeted.

Funny thing is when I search it on google its only gives three results.

1.The site itself (which I refuse to go to).

2.The comment in this post.

3.A comment in another tech blog (whose topic was about competing against Google).
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Chuck Norris' Enemy (deceased), 30 Oct 2007 @ 6:32am

Re: 11
Well, why don't you add them in a post? Lazy!
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Danny, 30 Oct 2007 @ 6:37am

Re:

Funny thing is when I search it on google its only gives three results.

1.The site itself (which I refuse to go to).

2.The comment in this post.

3.A comment in another tech blog (whose topic was about competing against Google).

Ooops. By "it" I meant that silly www.radicalspark.com spam post.
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Chuck Norris' Enemy (deceased), 30 Oct 2007 @ 6:39am

"Musical instrument sales are apparently up significantly..."

Mike, I don't think you can count Guitar Hero equipment as musical instruments. =}

At least, even if Zucker gets the boot, he will still get paid $350M at the end of the year.
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Joe, 30 Oct 2007 @ 6:47am

Re: The Name Sounds Familiar
That about sums it up perfectly. Except that the reason the content is free over the air is because it is ad supported, granted why they blame apple for making hardware and why they expect a piece of their business makes no sense to me.

Yes they may ask to get paid for their content, but honestly wouldn't it generate more buzz to sell the online content on the cheap to get the masses watching the broadcast on a LARGE TELEVISION instead of a small ipod?

I know DVR is killing broadcast, but shouldn't that just be a wake up call that maybe they should start offering all their content on demand and offering advertisers a more "targeted" opportunity to hit exactly who they want w/ % SOV in the marketplace similar to how online adds are purchased?

If they start there maybe they can get started on where TV is actually going and survive the holocaust of the upfront. It won't die this year but once TV is on demand and no one watches the ads to the majority of the US population(5 years)it won't be far off until they can't meet any gauarantees made for negotiations.

Then the mass broadcast will be the "bonus" weight and the on demand product sponsorships or whatever it is will be the paid for advertising.
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Joe, 30 Oct 2007 @ 6:49am

Re: Big Media
Hey i enjoyed multiple media at a time, until i got engaged. Now I can only enjoy one media at a time for short periods of time :-(.

Before that though i was online chatting, playing video games and watching TV and ignoring most of the advertised content.
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DCX2, 30 Oct 2007 @ 7:03am

Hm...
Without VCRs or iPods, consumers would have had greater difficulty consuming content. Perhaps Apple should be paid royalties by the recording industry? After all, without an easy way to consume content, the content itself is less valuable. They're riding on the success of innovation without giving anything to the innovators...
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Dutch, 30 Oct 2007 @ 7:38am

bravo
Terrific article. It sounds like Zucker would fit in perfect at the RIAA and not C-level where a "forward-looking vision" is required (would any company fall under this category?).

After reading so many Techdirt articles, I truly understand why this country "needs" so many lawyers.
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An0nym0use C0ward, 30 Oct 2007 @ 7:58am

Re: Big Media
No thank you Wes, a pay per view/listen model will not get my dollar. I buy my CD/DVDs and listen/watch them many times I want with no additional fees.

NBC needs to can that idiot before he sinks the ship with no hope of salvage.
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JustMatt, 30 Oct 2007 @ 8:38am

Re: Poorly done astroturf
It looks like the damn thing doesn't even exist yet!

http://www.google.com/search?hl=en&q=radicalspark&btnG=Google+Search
collection of online sales tools to ignite your sales! Coming in January 2008.

Hey, doofus, you might want to hold off on spamming until AFTER you launch the domain. Especially since these comments making fun of you are now at number 3 on Google. The more people link to this discussion the more difficult it will be to hide them. Bravo on your cunning plan.

Also, lots of chuckles in the WHOIS lookups for the domains surrounding RadialSpork (now there's a visual,sounds like a Ninja Master weapon to me).
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JustMatt, 30 Oct 2007 @ 8:42am

Re: Doofus (again)
Oh! Look at the number 8 hit (still first page) on Google! ROTFL. Hey Doofus, in the future you might want to pick a domain name that wasn't previously expired. Your domain name seems to be linked to a large number of pr0n terms at King Nic.
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Wes, 30 Oct 2007 @ 8:44am

hmm
The question is... how many times have you listend to your favorite cd?

If it only cost you 2cents to listen/watch each time, lets assume 15$ for the disk and 10 tracks.(same can be said for video, lets assume 10cents to watch an episode)

You'd have to listen to each track 75 times for you to see any benefit of actually owning the content.

Not sure about you but I'd rather experiment with new material for another measely 2cents then rehash the same old boring Disk or episode.
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James, 30 Oct 2007 @ 8:56am

Re: Radical Spark
So, I bit and went to the website.... Only to be informed that your wonderful product is not available yet. Pretty whack.

as far as NBC, the only good thing they have going for them is Heroes!!!
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Anonymous Coward, 30 Oct 2007 @ 9:31am

Re: Radical Spark
yeah i know exactly what they are up to. In a few months we will se an unholy amount of spam mail infiltrate our email accounts and then www.radicalspark.com will die off never to be heard from again.
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PaulG, 30 Oct 2007 @ 9:43am

Traditionally
This is the same brilliant network that also cancelled Star Trek in the late 60's and as Captain John Belushi Kirk once said on SNL "There is intelligent life all over the galaxy, except at one Earth television network..."

I guess things haven't changed much some 37 years later.
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another mike, 30 Oct 2007 @ 10:59am

one more time
Everyone say it with me now, as long as people can carry a tune in a bucket, the music industry is doing fine. If you think your job is to sell shiny plastic discs, you're in the recording industry, and you're screwed.
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John Duncan Yoyo, 30 Oct 2007 @ 11:43am

Can we say Hulu.com
It is no wonder Zucker has his undies in a bunch.

Zucker took NBC content from iTunes so that NBC could market it with FOX as a partner on their own pay service called hulu.com. It was announced that hulu would go live in October. No sign yet of hulu on 30 October and FOX is now distributing their shows through iTunes.

No wonder he sounds down trodden. He was betrayed.
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Chris, 30 Oct 2007 @ 12:14pm

Re: Re: The Name Sounds Familiar
Just FYI, I know people without video iPods (or those who don't know enough about them to convert their videos to put them on the device) usually think you watch the video on the iPod, but that's not really true. I mean, I do that once in a while I guess, maybe at the DMV or something, but generally you don't watch the video on the iPod screen, you plug it into a TV from the line out. That's what cool about them, you can carry dozens of movies/TV shows in your pocket and watch it on pretty much any TV anywhere instead of having a bunch of DVDs to drag around. Anyways, I just brought this up to say that your point about selling TV shows cheap on iTunes to get people to watch it on regular TV isn't really right. When you buy it from iTunes (or get it from p2p) you can watch it wherever you want, whenever you want and commercial free.
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Shun, 30 Oct 2007 @ 1:19pm

Does this have anything to do with the Singularity
Hey, Radical Spark...I paid you to blog about my product Mushy Bland Peas. Get back on it!

Moving on...is anyone surprised that this old media mogul just doesn't get it? Oh, and the same people laughing at Zucker are probably the same folks who laughed at Google Ads. Google, selling ads? For profit? Huh? Yeah, right. That includes me. To this day, I believe that "No one can make money off the internet" although there have been a surprising number of success stories.

On the bright side, it appears that technology will one day pass us all by, and we old geezers will be scratching our heads wondering, "Gee, how does this stuff work?" While 2-year olds will own the world.

Sounds fine to me.
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An0nem0use C0ward, 30 Oct 2007 @ 2:18pm

Re: hmm
"The question is... how many times have you listend to your favorite cd?"
Over the years quite a few times. Put all my music on open source media server to stream when on the computer. I buy on release week and get the disc for $9.99 anyway. Just remember once everyone is locked into the pay-per-view/listen , the cost of each view/listen will go up, and up, and up. Once they have you, you are screwed... I pick up DVDs after they have been out a while, does not take long to drop from that stupid high price down to something reasonable($9.99 or less/sometimes $3.98/$4.99). A few are purchased on release week for $13.99/14.99 if it is one that will be watched over and over a lot.
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Jake (profile), 30 Oct 2007 @ 2:37pm

Where exactly do the radicals park and why should i care?
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Max Powers at http://ConsumerFight.com, 30 Oct 2007 @ 3:43pm

keep your eyes to the sky
I think if I keep looking up in the sky it wont be long before I see a Golden Parachute floating down from the NBC jet before it crashes and burns.
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Tom, 30 Oct 2007 @ 5:07pm

Maybe that's why Zenith went bankrupt and was boug
But hey, why pick on consumer electronics companies like Apple (no Computer) who enjoy reasonable but not terrific margins? Instead, why not go after revenue sharing deals from those highly profitable semiconductor companies that make the chips and memory that are inside the players?The labels and studios could start deciding whose chipsets they will support. Or heck, why not go after the embedded OS guys like WindRiver? Better yet, Seagate and the other drive makers. After all, it is the sand peddlers, storage companies and embedded OS guys that are destroying the historical physical distribution margins for the labels and studios.
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Jaron, 31 Oct 2007 @ 12:51pm

David Vs. Goliath
Zucker probably sees himself in a David Vs. Goliath situation, where David will smite the terrible content stealers and vanquish the enemy.

What he apparently doesn't realize is that he isn't David. YouTube and the iPod are our stone to the forehead of the Goliath mega-media outlets of this common age.

We're winning!
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IronChef, 31 Oct 2007 @ 11:32pm

Jeff Zucker...

I've tried, Oh God I've tried... but a previous post sums it all up-

http://techdirt.com/articles/20070615/123323.shtml#c185

You can still do it... Just pick up the phone and call Steve.
http://techdirt.com/articles/20071021/135730.shtml#c49
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eufreka, 1 Nov 2007 @ 1:14pm

You ask: "Hey Zucker, Did NBC Get Money From Zenith For TVs All Those Years?"

But of course, you fail to point out that Zenith was NOT reselling NBC's shows; nor were they remitting royalties for each NBC show watched on a Zenith TV...in fact, the "business model" as you so quaintly discuss it was and STILL IS very different!

More to the point, when the customer BOUGHT a Zenith TV, he was then FREE to do with it/watch with it whatever he wanted. In fact, the customer could even receive NEW CHANNELS (and thus content) that didn't even exist at the time of purchase...and Zenith got nothing extra and had no control over the hardware OR THE CONTENT DISPLAYED ON IT after it left the factory.

So things are just a teeny, tiny bit different.

What is so surprising is that you are upset that NBC is doing the only LOGICAL and appropriate thing a content PRODUCER can do...disintermediate the proprietary middleman.

So, is it better or worse for the CONSUMER if NBC controls it's own content/sets it own pricing/enables MULTIPLE delivery methods and eliminates an EXCLUSIVE content agreement that forces consumers to purchase a PROPRIETARY device to view it? Waiting for your answer.

A final thought: Which is the better business to be in: Content Producer or Proprietary Content Delivery Mechanism.

The only times it sucks to be a Content Producer is when (1) you produce undesirable content or (2) you get stuck in a proprietary delivery mechanism you don't control.

The only time it DOESN'T suck to be a Proprietary Content Delivery Mechanism is when you lock up some stupid (but Desirable) Content Producer in an exclusive agreement...

And now that the Zune2 will (possibly) simplify moving NBC shows directly from home recording to portable viewing...
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IronChef, 2 Nov 2007 @ 10:21am

Historically speaking...
You'll be interested in reading the histories of NBC, ABC, CBS's history.

Even Dumont. They all made television sets, and then started in the content business to move TVs.

So yes, there was money. But now customers want to buy content on a one-off basis.

Apple, and YouTube level the field, and there is no need to maintain a model that includes margin-eroding advertising procurement activities.
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