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Zuckervision
Leading Man
Early one June afternoon, 
Jeff Zucker tours the wreckage of a fire that destroyed a portion of the Universal Studios back lot a few days earlier. Tens of thousands of melted, twisted, and charred videocassettes and 35-millimeter reels lay amid the cindered ruins, the black and brown magnetic tape unspooled and twisted. It is all that remains of a vault that once housed part of Universal Studios’ vast collection.
Zucker, the C.E.O. and president of NBC Universal, is visiting the site for the first time, accompanied by one of his top lieutenants, Universal Studios chief Ron Meyer. They stroll down what used to be the set of a New York street commonly used in television productions, their two pairs of brown loafers squishing through the ashy debris. The metaphor all around them is inescapable: all that analog tape, piled waist-high, partially burned but still fluttering—a ghastly tribute to a business that had been dying long before—a TV graveyard. (View slideshow.)
But Zucker does not dwell on the past. Looking at the mountains of burned videotape behind them, Zucker, whose NBC network still largely depends on the kinds of prime-time shows that went up in smoke here, says, “It’s tragic.”
It is a dutiful remark, because in many ways, Zucker moved on a long time ago. Despite overseeing NBC, the network of Cheers, Seinfeld, and Friends, Zucker is relentlessly focused on the future. He is unsparingly harsh about the prospects for broadcast television—gloomier than any other TV executive out there. In his view, the era of growth in network TV, the period of the megahit, is over. Growing his business, then, means investing in cable, digital video, mobile—anything other than network TV.
In cable, Zucker has gone on a multibillion dollar acquisition spree, buying Oxygen last year for $925 million, the Weather Channel in July for $3.5 billion and, moving into the international markets, a $150 million stake in India’s fast-growing NDTV network this year.
In digital media, he acknowledges that nobody is sure how digital content will be displayed, viewed, and, most important, monetized. So he’s trying just about anything to see what sticks. In March, he partnered with Fox to provide NBC content for free on a video-streaming site called Hulu. And he’s experimenting with all sorts of new distribution channels, with screens of all sizes in unexpected places—spooning out a few minutes of NBC content to video displays on gas pumps and in the back of taxicabs.
As he scrambles to do all this and to prepare for NBC’s Olympics coverage, Zucker is in a vise. Just as he needs to spend his way out of network TV’s crisis, he’s facing pressure from above, as his bosses at General Electric are demanding that he keep costs down and produce higher profits. To cut costs, Zucker has dramatically reduced the number of pilots that NBC produces each season—a move that hasn’t gone over well in hidebound and spendthrift Hollywood.
Whether it’s because of the outside pressure from G.E. or his own internal drive to counter critics who say he’s risen too quickly, Zucker is clearly the fastest-moving mogul in television. He has taken the lead in articulating the fears of many other media executives and stating candidly that he is not sure what will work. “I would rather be honest about the realities of this business, whereas so many people want to just sweep that under the rug and perpetuate what has been,” Zucker says. “Look, we don’t know what’s gonna work. Predicting what the media world is gonna look like in eight years is incredibly daunting. I defy anybody to do that.”
With so many brilliant and would-be brilliant minds working overtime to come up with a solution to the woes of network television, it would be fitting and ironic if Jeff Zucker, the man dismissed by so many as a precocious, hypercompetitive interloper, turned out to be the one who succeeds. Fitting, because who else but an obsessive, driven insomniac would be willing to put in the hours and try all the angles until stumbling on the formula for turning his company, and perhaps the whole industry, around? Ironic, because how many times has he been written off? What’s more, in order to succeed, he may have to dismantle the very business that made him.
Lately, NBC’s prime-time operation has been underperforming even in the underperforming broadcast-TV sector: It was dead last among the top four networks when Zucker took over in 2007, and a year and a half into the Zucker era, it’s still dead last in the key 18-to-49-year-old demographic. Zucker and his staff are quick to point out that the network has remained profitable despite the ratings disappointments. In fact, the three years that Zucker was running NBC Entertainment, before he took over all of NBC Universal, were the most profitable in the history of the division. They also note that the network today makes up less than 5 percent of NBC Universal’s earnings; the cable division brings in the largest chunk of revenue.
But the network’s prime-time lineup gets outsize attention, given its relatively small contribution to the company. It’s the most damaged part of a broken business, as viewer loyalties to once-sacred time slots have disappeared. It’s also easy to keep score with prime time, because ratings come out every morning and reveal which network—and mogul—won or lost: NBC (Zucker), Fox (
Rupert Murdoch and Peter Chernin), ABC (Bob Iger), or CBS (Les Moonves). “Zucker needs to turn around NBC prime time,” says a television executive who does substantial business with NBC. “He just does. It’s corporate bragging rights. It represents peacock prestige.”The Rockefeller plaza corner office in which I meet Zucker is vast, with views of the Empire State Building from the three oversize windows facing south, and two windows facing east. Along the windowsills are photos of his wife, Caryn, a former associate producer at Saturday Night Live, and their four children: Andrew, 10, Elizabeth, 7, Peter, 5, and William, 2. This is a handsome family, and Zucker is happy to acknowledge that the kids take after his wife rather than him. A large ficus plant sits in the corner next to a Modernist steel peacock sculpture that faces Zucker’s imposing Art Deco desk. He is seated now in an overstuffed wing chair that has lion’s-paw feet and fabric decorated with fleurs-de-lis. As he talks, he crosses his legs. When he sits back, his feet actually lift off from the floor a bit, like a boy taking a turn on someone else’s throne.
Zucker has an appealing, ruddy tint that lends him a cherubic appearance, despite his gray pinstripe gabardine suit and linen shirt. He has wire-frame glasses and a fringe of graying brown hair. His stubble looks like the kind that grows in fast, but his five-o’clock shadow does little to lend him gravitas. He has a gift for appearing at ease and makes the occasional self-deprecating joke. More important, he comes across as surprisingly down-to-earth for a 42-year-old multimillionaire who recently bought Kitty Carlisle Hart’s former apartment on the Upper East Side.
Zucker’s height is much commented on: He is about five foot five. Yet that relative diminutiveness has perhaps made him more likable. Ever since he ran for North Miami High School student-body president with the campaign slogan, “The little man with big ideas,” he has known that to be noticed, to thrive, he has to be more winning, more persuasive, more determined than his average-size peers. At Harvard, where he was president of the Harvard Crimson, he was seen by one of his classmates as “not a great people person. He already had a great ear, but he hadn’t yet developed the people skills.”
Zucker was famously the executive producer of the Today show at age 26. He helped Katie Couric become the most successful morning-show host ever and oversaw both the launch of Today’s concert series and the streetside studio, which became a central part of the show. His precocious and public success inevitably meant that his first missteps would be reported with glee. After he took over as president of the NBC Television group in 2004, prime-time ratings slipped 11 percent during his watch, dropping NBC from No. 1 to No. 4. Kurt Andersen of New York magazine declared NBC’s 2004–05 season an “annus horribilis.” Zucker’s widely publicized flops included the Friends spinoff, Joey, and the expensive animation show Father of the Pride. Much to his own surprise, Zucker became the poster child for failing upward, as he was promoted to C.E.O. of NBC in 2005, and then to his current job last year. “I was very young. I had a lot of success. I had a lot of coverage,” he says. “There was a tremendous amount of, you know—a lot of jealousy. It kind of goes to my idea that we live in a schadenfreude world.”
Critics have also slammed Zucker for his decision to pass The Tonight Show torch from Jay Leno to O’Brien, a deal made four years ago and one that Zucker insists is the correct call. He laughs when I ask him whether he regrets the move, considering that Leno remains a ratings champ. “You have to make these calls,” he says. “You’d rather make these calls a little too soon rather than a little too late.”
Zucker’s colleagues, competitors, and family all marvel at his competitiveness. “If you pick up a ping-pong paddle in our house, he will play you until he wins, even on a weekend,” Caryn says. “He won’t stop until he wins.”
Caryn and Jeff met in 1995 while getting coffee below NBC’s Rockefeller Center headquarters. Five minutes later, after returning to her desk at Saturday Night Live, she got a call from him asking her to lunch. “I had a boyfriend when I met him. I told Jeff, and he said, ‘You can still have dinner.’ Then he sent me flowers, kept telling me to get rid of the boyfriend, and he pursued me like a maniac. When he wants something, that’s it: one track. But it wasn’t done in a creepy, stalker way.”
Zucker has had not one but two bouts with colon cancer, during which he scheduled his chemotherapy for Friday afternoons so that he would miss as little work as possible. That is now part of the myth of the indestructible Zucker. But he received surprisingly little sympathy in the press.
Zucker says he has grown used to the criticism. “I’ve woken up in a hospital bed after surgery twice with staples in my stomach, in more pain than anyone should be allowed in their lives,” he says. “I’ve gone through chemo for nine months, vomiting my guts out afterward, then gone back into the hospital. If people want to take shots, hey, I’ve had more pain than anyone can give me.”
His weekend tennis matches at the East Hampton Racquet Club—he was captain of his high-school tennis team—are a proving ground for Zucker’s ego. He will soon undergo his second knee surgery, but he’s so committed to the sport that he will play through the soreness until then. “I don’t really know if he finds it fun,” Caryn says. “He really plays to win.”
Caryn says that Zucker’s claim that he sleeps only four hours a night is true. “He needs to be on the phone and on the BlackBerry at all times,” she says. “He never stops working. It never ends. Because it can’t. But I understand that. I don’t know if this kind of marriage could work for everyone, but I completely understand it, mainly because I used to work in television.”
Jeff Immelt, the C.E.O. of G.E., says he understands that NBC Universal, for the moment, is not in an easy business to grow. “It’s not a 15 percent grower,” Immelt says. “It’s not a zero-percent grower, and I’m fine with that.” Immelt categorically dismissed rumors that G.E. is going to spin off NBC Universal. “There’s nothing to that ever. Every business in G.E. has to earn its way, sure.” The rumor, he says, “has been a concoction of other people. It hasn’t come from inside G.E. This is an inherently good business in a profitable industry, and one we run very well.”
Following the lead of his predecessor, Bob Wright, Zucker has continued to steadily diversify NBC Universal. Lately, he’s ramped it up, selling the Sundance Channel (a joint venture with CBS and Robert Redford) for $500 million and going on a serious buying and selling spree—mostly buying—of other cable properties. He snapped up Oxygen and purchased 26 percent of India’s NDTV.
When we meet in his office, he is waiting for the lawyers and bankers down the hall to agree on the language in the deal memo for his acquisition of Landmark Communications’ Weather Channel. (
The Blackstone Group and Bain Capital are NBC Universal’s partners in the deal.) “I don’t think any media company has been as active in the past 16 months as we have,” Zucker proclaims. Other media companies had sought to buy the Weather Channel, primarily because it reaches 97 percent of U.S. cable households, but the final bidding had come down to
Time Warner against NBC Universal. Zucker emerged as the winner after Landmark chose the cash-rich NBC deal. In the short term, at least, the move is likely to please G.E.: The deal will add between $30 million and $40 million to NBC Universal’s net income in the first year.Zucker has been outspoken in lauding the virtues of cable over broadcast: “Hey, two revenue streams versus one,” he says. “You don’t have to be a genius.” Oxygen, which was widely seen as a bargain when Zucker made the deal, has given NBC Universal one of the top cable networks among the sought-after demographic of female viewers aged 18 to 49.
The Weather Channel, Zucker believes, will give NBC Universal a similar boost, not only in short-term earnings but also for NBC’s news brand.
When it comes to cutting costs, Zucker’s attempt to take on the profligate tendencies of an industry not exactly known for its frugality has made him the No. 1 advocate of reforming the TV development process. Until the industry understands what the distribution models will be for shows and how they will be monetized, Zucker believes NBC can’t keep buying content based on yesterday’s revenue models. His point comes down to this: A hit sitcom today—say NBC’s My Name Is Earl—might garner only a 5 share, or about 7 million viewers, while a hit sitcom 20 years ago would typically do a 17 share, or about 15 million viewers. Despite that decrease in viewers and a less pronounced drop in advertising revenue, the development and production costs for these shows haven’t changed, based as they are on union contracts, costly deals with production companies, and multimillion-dollar budgets for making pilot episodes.
Zucker’s most audacious and controversial move was to dramatically slash the number of pilots NBC will produce each season. Instead of about 20, he’s funding about five. “It was just crazy,” he says of the pilot process. “It was no predictor of the success of the series, and we were wasting a tremendous amount of money, so we decided to have the courage of our convictions and go straight to series with scripts we liked and believed in.”
Peter Chernin, Fox’s chief executive, is quick to agree. “The industry can either adapt and go through a rational process, or the industry can fail to adapt, in which case the market will do it for them,” he says. “The latter will mean that people go out of business, in which case it will be much more draconian. That’s really what Jeff is talking about, trying to adapt to a cost structure that reflects the marketplace.”
But Zucker relishes pointing out that for every 80 pilots made, only eight become shows and just one of those becomes a hit. That ratio, he explains, works only if your hits generate enough money to pay for all those misses. But in today’s fragmented media landscape, that math has broken down, leaving the networks scrambling to monetize their content in new ways, via the Web, DVDs, and digital downloads. Zucker frankly admits that he doesn’t know what shape content distribution might ultimately take, but he insists the system for producing that content must change. “Look, we cannot operate with the cost structure that has been in place for the past 35 years,” he warns. “We are going to crumble beneath the weight of that.”
Zucker has come under fire for ditching the pilots, but Ben Silverman, Zucker’s choice to run NBC Television and the man who must implement the new mandate, is diplomatic about its reception in the creative community: “There are moments of loneliness when you are out in front.”
One prominent talent agent who does substantial business with NBC Universal is dismissive. “Once Zucker realizes he is missing out on hit shows, he’ll sing a different tune,” the agent says. “He’s not the first guy from out of town who thinks he can change the business. Things are done this way for a reason.”
Zucker laughs when I repeat that quote to him. “There’s a lot of mansions built in these hills on the old ways of doing business, and they would like to perpetuate that,” he says. “I think they find this very threatening.”
One of the biggest problems facing the television industry, Zucker says, is that it gets “digital pennies for analog dollars.” In other words, content providers have yet to figure out how to make money in an era when content can be distributed digitally to any number of formats. “We know the distribution system is evolving,” Zucker says. “We know we will be in the business of projecting images onto screens. But where will those screens be? In your hand? Your car? We’re a content company. We produce television programs, films, newscasts, local programs. We have to drive that content through a lot of different mediums, whether it’s your taxicab, your elevator, your cell phone, or your handheld device.”
Such concerns were at the heart of the bitter, public fight with Apple in 2007. It started when NBC Universal’s contract to sell shows on iTunes came up for renewal. Zucker was adamant that Apple agree to sell episodes of NBC’s hit shows at varying prices; for example, The Office and Heroes would command more than the standard $1.99.
Steve Jobs refused, and the faceoff hit the headlines. Zucker complained that NBC was basically functioning as a marketing tool for Apple, selling shows too cheaply. It produced 40 percent of the video content downloaded from iTunes, but earned only $15 million a year from that business. “There’s no example anywhere in the world where the retailer gets to set the wholesale price as well,” Zucker said in a podcast last year. “And frankly that’s what he’s doing.” NBC took its shows and walked away. In late July, the two companies were working on a compromise to get NBC shows back on iTunes. Zucker decided to come up with his own outlet for distributing content online. In partnership with Fox’s Chernin, he started the video-streaming site Hulu.com, which offers NBC, Fox, and other networks’ shows at the click of a mouse—for free. Like network TV, Hulu sells ads that play during episodes. Since launching in March, Hulu has signed on dozens of partners, including Comedy Central,
Sony, the N.B.A., and Warner Bros. Television. Hulu, which was named best product of the year by PC World, has exceeded expectations. Shows on the site have been viewed 80 million times in May, up from 63 million in April.Zucker’s plan for solving prime-time’s problems—and every other TV problem—was on high-volume display at a presentation this spring at Rockefeller Center. It was time for the annual upfronts, previews for selected advertisers meant to sell 30-second spots in advance of the fall season. Traditionally, these events are held in auditoriums filled with media buyers who get to watch the shows, meet their favorite stars, and listen to some hard selling. But this year, Zucker wanted to do it differently and drive home to advertisers that NBC is more than a television network, that it is a multiplatform behemoth that reaches viewers from morning to late at night, from the cradle to the grave.
So he staged a separate megaevent, a kind of NBC theme park sprawled across Rockefeller Center, replete with every conceivable size and shape of flat-panel monitor. The evening’s gospel was distilled on a pyramid chart that showed how NBC’s hit Heroes is available as mobile content, video on demand, streaming video, and a digital download, as well as on cable and, of course, the old television network. At the event, everywhere you looked, you’d see a famous face—Maria Bartiromo, Tom Brokaw, Brian Williams, Meredith Vieira, Jimmy Fallon, Lorne Michaels, Tina Fey, Deion Sanders, and at least a dozen more, all of whom have shows on NBC channels. Striding through the middle of it all—and easy to track because of the camera and lighting crews that followed him everywhere—was Zucker, the maestro of the event. What made him especially conspicuous was that he was the only person trailed by a vast entourage who wasn’t handsome, pretty, or particularly famous.
Zucker sees in these many platforms much more than just TV. He sees the future—the bright, shining, fat-margin media future. The problem is that it exists only here, on an ice-skating rink in New York, and in his own mind.
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