NBC and members of its affiliate board spent a large part of their closed-door meeting Sunday in Las Vegas pondering how viable their business plan of jointly producing digital-TV channels will be if cable systems aren't required to carry them.
The answer is unclear, but for now, the sense is that cable carriage isn't necessarily a must to make such channels work.
The network and its affiliates plan to develop a weather/news-alert channel targeted for a midyear launch.
Having a plan is one thing, acknowledged Roger Ogden, NBC affiliate-board chairman and senior vice president of Gannett Broadcasting. "But the tougher part is getting this done and getting it done against the backdrop of not knowing what the distribution is going to be from a cable perspective."
Ogden and NBC Television Network Group president Randy Falco briefed reporters on the meeting.
Falco said he thinks the network and affiliates can persuade cable operators of the value of carrying broadcast-digital channels even if the law doesn't require it. Ogden agreed, noting that as satellite services get more aggressive in going after cable's subscribers, "anything that differentiates them has more and more value. Some cable operators are more enlightened on those issues than others."
Broadcasters hope the Federal Communications Commission will decide the digital must-carry issue in the next six to eight weeks.
"It may just be a good business anyway," with or without cable must-carry, Falco said. "Distribution comes in many forms now. Distribution is a commodity. If you have good content, there's a million ways to get distribution."
How long it will take to make digital a good business is unclear. "The ad community will decide the answer to that question," Ogden said.
Fox executives have told their affiliates that they think supplemental digital-TV services won't start to have real revenue potential for two or three years. "That sounds like a little further down the road than I would hope," Ogden said, "but I don't think anybody really knows the answer."
At the board meeting, Falco also tried to assuage affiliate concerns about NBC's commitment to them in light of its pending acquisition of Vivendi Universal Entertainment. "Are we less interested in broadcasting? Absolutely not," he said. "The network is paramount to us. It's at the top of the list."
Also discussed was the transition from Tom Brokaw to Brian Williams as the anchor of NBC Nightly News. Brokaw will likely step down in late November, after the elections.
On the Olympic Games front, Falco said ad sales for the Games are at 70%, with the current ad take topping $700 million.
Falco discussed NBC's decision to launch its fall-2004 prime-time schedule several weeks early and immediately after the Athens Games in order to take advantage of the huge audiences tuning in during late August. He stressed that NBC would still program aggressively during the May sweeps, which are critical to affiliate ratings goals.
"Over time, we really have to be in business [with original programming] 52 weeks per year," Falco added.