Zalaznick SteersNBCU Cable NetsToward Upfront

New sales chief Yaccarino brings relationships, pushes digital content

When Comcast took control of NBCUniversal last year, Lauren Zalaznick was named chairman, NBCUniversal Entertainment & Digital Networks and Integrated Media. In addition to overseeing the Bravo and Oxygen cable networks and marketing initiatives such as Women at NBCU, Zalaznick added responsibilities for Spanishlanguage Telemundo Media, digital properties such as Fandango and Daily Candy, and Style cable network, which will get rebranded in June. Zalaznick spoke to B&C business editor Jon Lafayette as NBCU’s cable networks got ready for the upfront season. An edited transcript follows.

You got a lot of new responsibilities last year. Have you fi gured out a way to make them all fit together into a coherent whole?

Running a portfolio of businesses, as opposed to a singularly designed and defined set of businesses, is really just a microcosm of the big media company strategy. Top-line growth is the driver for every single one of the businesses while maintaining moderate and appropriate cost confines. But at the same time, every single business is through the lens of great, high-quality, original content.

Upfront season starts for NBCU with Bravo this week. Besides ratings, what factors do you want media buyers to notice?

A rating is always important, but don't forget what we've always delivered in cable has never been truer, which is the value of a focused, committed, actionable audience that each of the networks is delivering. And I think we've done a phenomenal job identifying the lifestyle audience versus the female audience versus the digital audience, and how to activate them. Every channel is very focused on their individual growth. At the same time, I'm focused on the portfolio's growth, so if you take a brand like Mun2 or Style network, or even Oxygen or Telemundo, you are looking for great ! rsttime clients who haven't advertised on the channel. Some brands are going to go for volume because they just have so much more capacity than they did. Some are going to go for the right client mix.

NBCU brought Linda Yaccarino on board from Turner to head cable and digital sales. What has she brought to the party?

Linda is an outstanding salesperson and an outstanding executive. She brings deep, deep agency relationships and client relationships. She brings a passion for cable ad sales and digital ad sales. She looks at the portfolio top to bottom and she never seems to have a conversation about sales without implicitly or explicitly talking about integrated sales. So that's a lot of big-picture thinking. At the same time Linda can really drive the art of the deal. She seems to be driven to deliver value on both sides of the table. With Linda, it is truly seeking the long game, where the relationship and the value proposition have to be right, not just for us, but for the partner on the other side of the negotiating table.

Do you expect this to be a successful upfront season?

I'm expecting this to be a very successful upfront season. The company and the individual brands have a ton of value to offer, and the economic state absolutely seems to be leaning toward a very robust upfront for cable. We're also going to be in the digital NewFronts week, and I think we're still the only major media company presenting. That speaks to doing everything we've always done even better, which is no small feat, including selling cable for the right price with the right volume, including digital in that, and making our product available to the smartest and most tuned-in and most aggressive buyers. I have to give both Linda and my head of digital strategy, Nick Lehman, credit because they really came up with this idea and said we have to be there. We are a digitally focused company. We have product. We have a strategy.

Style is a new cable network in your portfolio. How is it changing?

Style is in a massive growth period. It has not just big hits for Style, but what I would consider to be a substantial hit for any of my channels in the form of Jerseylicious and Big Rich Texas. The increase in original programming is significant there as well, and what's coming that we also can't talk about right this second is the repositioning and rebrand for Style network, which will be coming in June. I think the momentum at Style is what's going to rocket-fuel us into the upfront period with a best quarter ever, best year ever last year. And so I think it's a matter of capturing all things style, all things embodying and owning the word style on the dial, which when you think about it, no other brand has done.

Anything exciting on the horizon for Oxygen?

Oxygen is in a tremendous growth period. We are absolutely focused on our major increase in original programming for 2012. We love our two new shows that premiered [last] Monday and Tuesday night: Best Ink and Brooklyn 11223. And we are most especially focused on the Glee Project returning for season two. It is a stunning and spectacular cast with a very, very, very energetic season. It's going to be a big deal.

Did Bravo deliver on what it promised in last year's upfront?

I think it did. We have new series on fire. We have best-evers for our returning series, I think we still deliver on our absolutely unique promise which is food, fashion, design, beauty and pop culture served to the most educated, most affluent audience on television. And I think advertisers can't get enough of it.

Our focus on the third screen, meaning co-viewing, co-sharing, as well as a focus on the original content on television is an area that has never been more relevant to our consumer. Tweeting or chatting or Facebooking while watching is the two-screen element. The third being a way to have companion content at the same time or near the same time, while being social while watching.

That's a lot of work for the viewer, isn't it?

It sounds like a lot, but it's very fluid and it's the way these very thirty-something super-consumers-our affluencers-devour our content. It sounds exhausting but it seems to work. Consumers are finding ways to do it themselves and we're taking their lead and then serving it back to them with our content, which we're in control of.

Is there a demarcation between style at Style and fashion at Bravo?

I think there absolutely is. I will leave it to the brand owners to articulate that at their upfronts, but the fact of the matter is that Bravo is in this unique place where fashion per se is a bucket that we cover through big personalities for this affluent audience, whereas the notion of style and the moniker Style is implicit in everything Style does for a uniquely female audience [whereas Bravo is male-female] and committed to an audience that through every single action, every single purchase, every single relationship is driven to live their life stylishly. And that is evident in the programming.

What's new in digital in 2012?

What's new for 2012 on the digital front is two kinds of things. A continued focus for a Daily Candy and iVillage on top-notch original content for women. It's still an underserved market for women.

At the same time for 2012 there's going to be more and more transmedia plays for Bravo, Oxygen and Style networks. They're going to create original companion series with our original television product and continue to engage the viewers online, not with long-form product but with special hand-crafted top notch original content that goes with the TV product. And for 2012 the biggest through line has got to be the continued exploration of social and mobile.

How different are these businesses from one another in terms of the creating content and distribution systems?

Any advertising driven business is a matter of corralling the right number of consumers, whether they're users or viewers, measuring that use correctly and monetizing it appropriately. That is way easier said than done. We know how to use the system for television that is called Nielsen. We are investigating and debating and struggling at times as to how to commensurately monetize impressions and eyeballs outside of the C3 window, because those are valuable people watching, valuable commercials within the flight of a product. Then you move into the means of digital distribution and even there there's such a plethora of what we mean by digital distribution. We're not yet talking about Netflix original programs, we're not yet talking about YouTube channels. What I mean specifically is short-form and or long-form original content that usually originates from the television screen on Website, mobile and social outlets. And there, I think we've done a very good job associating digital content to the television in the form of what we've called 360 deals for years and years. But at the same time I think Bravo, as a leader in the buzzword "transmedia," has really taken the leading edge on content associated with a top-notch product like Top Chef, and driving immense traffic: Millions and millions, not hundreds and hundreds of thousands, and monetizing it appropriately. In the same way, I think the Glee Project on Oxygen was a trailblazer in that space last year and the Glee Project 2, through our product called Oxygen Connect, will also both capture the right number of eager fans and seek to monetize it. And that spans Web and mobile, which is yet another advance.

And then you take, even in my digital portfolio, we're really finding a great, great, great interest in the Fandango business. I'm sure you saw the Hunger Game's box office [on its opening weekend]. We were selling at its peak on Thursday night and Friday 60,000 tickets an hour on Fandango. And we ended up Thursday at midnight through Sunday night selling 22% of the tickets sold of the opening weekend box total through Fandango, 40% of those on mobile. So there I will say that is a different business because this is an e-commerce business. You hit ‘confirm transaction' at the end of your session and there's a commercial transaction. Now, at the same time, it's a very comfortable dual revenue stream for us and we know all about dual revenue in cable and of course at the network with retransmission now. But the point is if I have an e-commerce and advertising dual stream at Fandango, I know how to measure myself. Do I want to drive that to be 50-50 ticket sales and ad sales? That way I'm hedged if the box office goes down year over year. And I'm hedged if the advertising market online is challenged. So that's what I mean by kind of learning from a lot of the new businesses in the portfolio, but using what we know to drive those new businesses.

In what ways do these businesses work together and do you encourage that?

From the top down it is a core strategic mandate from me to my direct reports and from [NBCU CEO] Steve Burke to his direct reports that yields tremendous cooperation throughout the company. So I even prefer to take it a step further and say yeah, it goes without saying, that cross-promotion for shows that may deliver on similar audiences within my portfolio or promotional runs of full-length programs, advertising clients. As you know, I run integrated media, advertising clients that are best served looking inside my portfolio and outside my portfolio; there are real, measurable ways of gaining cooperation.

I have two TV screens in my office. It used to be easy. I had Bravo and Oxygen on. Now I have a lot more and I have to flip them around. So, today happens to be Style and Telemundo. And all morning long, Telemundo was covering the Pope's visit [to Latin America]. This is an immense event, both in Cuba and Mexico, and NBC News has been formally involved in helping Telemundo News-Noticias Telemundo-in the sense that their Cuban bureau is very, very strong. In addition to NBC News-and by the same token-Telemundo News' deep bureau roots and longstanding presence in Mexico City has been a real help and assist to NBC News. And it is a measurable result. I think everybody knows NBC News is stellar and No. 1, etc., but during the Pope's coverage, our L.A. station was the No. 1 local news broadcast with the Pope coverage from Mexico and that's not an everyday occurence for that L.A. station. Throughout the company, that kind of synergy is synergy in a good way, not the old ‘80s evil way.

What would you say was your biggest accomplishment in 2011?

I would say embracing the Telemundo businesses, both seeing a successful integration of going from about 600-700 employees to 2500 employees and going from a little under $1 billion in revenue to more than double that. Also understanding and embracing the Comcast corporate culture and adapting it to the new NBCU culture and credo and pushing that out to my entertainment and digital networks portfolio in our unique way, but one that supports that overarching one.

But really, of all that stuff, taking on Telemundo Media was big. I'm taking on a long-standing asset that needed to be supercharged for growth and right sized and aligned with the rest of the company for growth. For me, taking on a broadcast network with a discrete and distinct set of distribution needs, affiliate relationships, advertising relationships, local media business, an international business, all in Spanish has got to be the biggest challenge and the biggest accomplishment.

Was Telemundo an asset you asked to have included in your portfolio or was it offered and was it the kind of offer you couldn't say no to?

It was offered and eagerly accepted. I debate this all the time with myself. On the one hand, it was an out of the box idea. On the other hand, you know, I'm always up for a challenge and I'm always up for something new and I don't tend to go for more of the same.

How much more can Telemundo close the gap on Univision? They said they've moved up five share points so far this year.

I think that in a two-player race you seek to be No. 1. I think that given how quickly just by the picking of the proverbial low hanging fruit and moving this far this fast, we have a significant life as the country continues to embrace Spanish language broadcasting, as our distribution continues to grow. As the World Cup gets ready to come to Telemundo in 2016, this is not 10 years off, this is four years away and we are very motivated to close that gap.

What is your biggest challenge for 2012?

I think for 2012 and beyond, it all goes to this key question which is, with the changing habits of consumers driven by technology, and now sort of super served by media companies, meaning I can watch what I want, when I want it, where I want it, it's going to be the challenge of appropriate measurement, appropriate monetization as we head into the de-facto content everywhere era.

You think content everywhere is really going to take off?

I do. I think if you look at something like Telemundo, we recognized its viewers needed to move and had life aspects that we needed to cater to, so we made Telemundo the No. 1 Spanish language VOD service in eight months. And you can't force people to go onto something where, however many major and minor MVPDs there are, everyone has a different VOD interface, everyone has a different remote control, and yet throughout those market we put product in the place that people wanted when they wanted.

In your early days of Bravo, there was a lot of focus on building buzz. Are you still interested in that buzz or do you think there's more substance to these businesses now?

I would say I was an early provocateur of the notion that buzz was substantive, that buzz that is not quantifiable or even qualifiable was just noise, and it came and went. But as its core mission, my businesses seem to be able to be buzzy because they're engaging with real people. It's not self-created hype. And I think the empty kind of buzz is called hype. And you can't be successful every single time you do hype something [that] doesn't take. That's not what buzz is. Buzz is being very relevant. Something people must talk about. The notion of water cooler conversation is real and when people are compelled to talk about it, whether at the literal water cooler of 20 years ago or on their Twitter feed or at a dinner party, those are legitimate business drivers because it means relevance. It doesn't mean hype.

You've got a lot on your plate. What do you want to do next?

I'm up to Passover. I'm up to the 22 people I'm having over for dinner at 5 o'clock a week from Friday. That's what I'm going to do next. I've got a lot going on.