NBC Universal to Slash Costs In News, Prime-Time Programs

NBC UNIVERSAL TO SLASH COSTS IN NEWS, PRIME TIME PROGRAMS
[SOURCE: Wall Street Journal, AUTHOR: Brooks Barnes brooks.barnes@wsj.com]
NBC Universal is slashing its news budget and abandoning high-cost dramas in the 8 p.m. hour, paring expenses in traditional television as viewers and advertisers flock to new kinds of media. The steps, to be announced today, are part of an overhaul that also affects movie production and other operations at the entertainment conglomerate owned by General Electric Co. NBC Universal aims to cut operating expenses by $750 million by the end of next year, in large part by eliminating 5% of its global work force, or about 700 jobs, in coming months. NBC Universal Chairman Bob Wright said the streamlining, known internally as NBCU 2.0, will return the unit to double-digit growth in 2007. "As we reprioritize ourselves toward digital, we've got to be as efficient in our current businesses as possible," Mr. Wright said in an interview. "We can't have new digital expenses and the same analog expenses." The plan marks the starkest recognition yet that established TV networks can't keep carrying the high costs they were accustomed to in earlier decades, when they faced less competition for viewers' attention. Although the networks have been discussing radical prescriptions for years, they have often hesitated to take steps that would disrupt not only their own employees but also longtime business partners in Hollywood such as programming studios, talent agencies and syndicators of reruns. The rise of video-laden Web sites such as YouTube and portable devices is threatening the networks' longtime business model of putting out programs with advertisements that people sit before a television set at home to watch. The networks are trying to ensure that people looking at a computer screen or carrying a video iPod from Apple Computer Inc. will still watch their programming.
http://online.wsj.com/article/SB116122516063297321.html?mod=todays_us_pa...
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