NBC Considering Cutting Programming to Trim Costs

NBC announced that it is cutting the jobs of 500 employees in an attempt to trim about $500 million from its operating costs for the coming year. Chief Executive Jeff Zucker told analysts recently that NBC is considering reducing its programming hours in order to help reach its cost cutting goals for 2009. He pointed out that NBC currently offers more original programming than the other 3 major networks and that the cost of producing and maintaining that original content is creating a drag on the company.

Zucker pointed to the current financial crisis, especially in relation to the auto industry, as a big reason why advertising sales have plummeted at the network. This is especially true with regards to local stations owned by the network. Zucker noted that without significant structural changes at NBC and its locally owned stations, the network will be headed down the same path as newspapers and car companies - straight for bankruptcy.

NBC currently holds some of the better shows on television, including The Office and 30 Rock, as well as some once-great shows that are falling off due to poor writing, as is the case with Heroes. It will be interesting to see how the network and its competitors face the challenges that will be presented by a shortage of advertisers in the coming months. It's unlikely that the major U.S. automakers are going to be in position to return to their previous ad spends in the coming months, which is sure to leave shortfalls across the industry. Will advertising rates be adjusted downward to try to attract a new level of advertiser? Will there be a new premium placed on the development of truly original programming?

It's difficult to say how the television environment will change as a result of the current financial crisis - and whether or not we'll even be able to tell from our side of the TV.