NBC Eyes Big Ideas: VOD, DTV Multicast

A broadcast network of nothing but Universal Studios movies? A Dick Wolf crime channel? Both are possibilities that Bob Wright sees in the new NBC Universal.

The NBC chairman wants to exploit the Universal programming in every way he can, including broadcasting it over NBC's digital TV stations and offering it as video-on-demand via cable.

With those DTV stations, NBC Universal could multicast five standard-definition channels during the day: the NBC network, a movie channel filled with product from the Universal film library, a "sneak peek" channel of previews and behind-the-scenes looks at NBC's shows, a local channel of news and traffic, and a local "alert channel" for weather, health and safety. At night, the local channels would go dark so that the stations could broadcast NBC in HDTV. (The HDTV signal consumes more bandwidth than SD signals.)

Key to Wright's multicasting strategy is an FCC rule mandating that cable operators carry everything broadcast over digital stations. "Digital must-carry is very important," he said in an interview. "This country has the best free universal television system in the world. To do anything to weaken that is a terrible mistake."

He knows he will get a fight from cable operators. They see it as a turf war for their own TV real estate and don't want to be forced to carry broadcasters' additional channels. They will agree to carry only stations' primary signals.

Although Wright's multicasting pitch is sketchy, it's probably more detailed that any other broadcaster has laid out in a while. Another NBC executive cautioned that the proposal hinges on a much bigger base of homes with digital TVs to launch any new channels.

NBC Executive Vice President of Business Development Brandon Burgess pointed out that the multicasting proposal is very preliminary: "This is a strategic-planning thought process, not a plan." But he added, "There ought to be a way to put this enormous digital bandwidth to work."

NBC executives would prefer that the network and all station affiliates be on the same plan, one reason the proposal carves out so much space for local news operations. But Wright said NBC affiliates are mixed. "Some are aggressively doing it; others are laying back. Our affiliates are like the United Nations. They cover all rules and all possible theories."

An executive for one of NBC's largest affiliate groups, Hearst-Argyle Television, said that company is "receptive to some of the ideas" that have emerged from discussions with the network.

Cable executives and Wall Street executives said Wright's plan sounded a little speculative. "It sounds more like a justification to grab the must-carry real estate from cable than a business plan," said the CEO of one cable operator. "Why else emphasize the weather channel as an 'alert channel'?"

Wright sees VOD primarily as another outlet for NBC and Universal television product. Law & Order creator Dick Wolf, he said, keeps pitching a crime channel (something USA Network started toying with years ago). That could be done as a VOD feed. Or NBC could offer USA Network's The Dead Zone as a single show.

"This is going to a business over time that could be quite significant," Wright said, cautioning that he doesn't want to "mislead" anyone that any projects are imminent.

The big problem is that the bulk of Universal's product is tied up in various cable and broadcast packages—even, say, older movies. "You can't do all these things tomorrow because people have rights that cover this ownership. But they roll off," said Wright. "There's always some lease rolling off, and, every time one rolls off, we examine whether there's an opportunity now for video-on-demand, whether there will be an opportunity for digital personal video recorder."