NBC: Where logic goes to die

..."I can't imagine doing this with somebody else...We're not judging Ben by ratings, and I'd rather be a more profitable No. 2 or 3 than a less profitable No. 1."

Jeff Zucker, NBC Universal President & CEO
Fortune (10/27/08)

I know I've goofed on Ben Silverman a couple times (28 to be precise). And he deserves a lot of blame for the failures at NBC, but the above quote illustrates he's not the only nincompoop over in Universal City. Jeff Zucker, you're about to get yours.

Before everyone gets in a hissy, I understand that NBC is part of GE. I know publicly-traded companies must produce for shareholders each quarter. Maybe balance sheet issues dictate this strategy (or performance clauses in their contracts)? And I'm certainly not so naive as to ignore that it's "Show Business" rather than "Show Non-Profitness." But Zucker's statement illustrates exactly the problem at NBC -- a focus on short-term profitability versus an urgency or focus on returning to #1.

So which is the better approach? Is it best to produce a profitable show with 2nd or 3rd place appeal? Or is it better to develop shows that cost a little more (assuming such things are mutually exclusive) but deliver in the ratings? Consider the following:

1. Higher-rated shows beget higher ad rates. Higher ad rates beget a more eager ad sales department (commissions & bonuses are fun!). A more eager ad sales department begets more ad sales. And more ad sales beget more money.

2. A top-rated show can bolster the ratings of those around them. As proof I offer Veronica's Closet. This show, which could easily be described as crap, succeeded because of its lead ins (Seinfeld during season 1, Fraiser in season 2). It became a Top 10 staple (commanding higher ad rates, bringing in more money, see step 1). Then it moved from Thursday to Monday, was surrounded by average programming and its ratings fell off a cliff.

3. Shows that only do ok in the ratings (like second or third place in their time slot) typically don't last as long as those that do well (duh!). The long-term success of a show can deliver huge dollars as the show advances in age. Need an example? The series finale for Friends got more than $2 million for each 30 second spot and drew 51 million people.

4. The Price of Turnover isn't free. Finding successful TV programs is not easy. Even good shows fail (see Arrested Development). But why make things harder by being satisfied with average but profitable shows? Average shows have a shorter life expectancy. This means you have to replace it (unless you're the CW and decide to sell the time instead). Every time a show fails you start the development process again. You're gonna have to take pitch meetings, deal with agents, negotiate contracts, build the sets, hire staff and all that other stuff that ain't free. Methinks it's easier just to give the stars a raise than deal with the rest of this.

5. Let's role play. You're a successful producer, actor or writer. One day Steve McPherson and Ben Silverman both call and give you the same offer for your services. Do you pick the network that offers you the best chance of success through better lead-in programming and a larger total audience? Or do you go to the network that's routinely in fourth place.

6. Syndication may be dying, but it ain't dead yet. Just ask the folks at 20th Television who are gonna make $350 million from "How I Met Your Mother" I know NBC and NBC Universal Television Studios (the best acronym ever...N.U.T.S.) are different entities, but they're both run by Ben Silverman. Better shows (not just more profitable ones) make more episodes. More episodes mean you've got critical mass for syndication.

But what do I know? I'm an unemployed Temp.