In Depth: The Bottom Line…

Silicon Alley Insider’s Michael Learmonth decodes Jeff Zucker on the day of the kickoff for NBC’s upfronts…

This is more a Wall Street message than a Madison Avenue message. Translation: upfront ad dollars may be down this year, but we’re running the business for profitability.

If this sounds eerily similar to what we’ve been witnessing transipire on MSNBC the past couple of years, it should. Many of the decisions regarding programming, staffing, and talent on the cable news network can be directly tied to maximizing profitability at the network, not necessarily maximizing ratings, branding, or quality.

NBC would be quick to note that it’s making changes for the “new reality” of news coverage in the new millenium. And there is some truth to that. But at the same time it strikes me as a bit of a convenient excuse to justify cutting back while CNN and FNC continue to bulk up. Viewers note these things and so while it may make NBC leaner and more profitable, I would add that it also damages MSNBC’s brand as a cable news channel. Synergy can only get you so far if you are relying on an increasingly smaller pool of available assets to get the job done because you want to maximize profitability.

There are two ways to maximize profitability. One is to go the CNBC route and hire Mark Hoffman and give him the latitude and the budget to invest in coverage and make the network really shine with news. This method will eventually lead to higher profits as the network brand is enriched. The other way is the path NBC chose for MSNBC; to slash the budget – to give up the idea of going toe to toe with resources against CNN and FNC and instead just try to be good enough so that viewers wouldn’t flee the network in droves. Nobody at NBC will publicly own up to this, but I have heard privately from several sources that this is the understood policy of NBC News regarding MSNBC.

The first sign of this occurred just before the 2006 Olympics when MSNBC unleashed the Friday Doc-Block. It was billed as temporary but nobody inside MSNBC, or outside MSNBC for that matter, bought that. I didn’t. This wasn’t then GM Rick Kaplan’s idea. He didn’t want it and fought hard against it. But he was overruled, apparently by Jeff Zucker. Zucker wanted the Doc Blocks because they were cheap to produce compared to having live TV shows. Never mind that they had absolutely no topicality to the news of the day. Never mind that they saddled MSNBC with the “crime channel” tag and undermined its brand as a news channel. They were cheap to do and produced a high return on investment. All of which served the goal of profitability for the network. And profitability was what mattered most now. Not necessarily news.

The second sign of this “new order” was the institution of the 30 minute wheel format in early 2006, which tried to ape Headline News. 90% of the wheel consisted of canned reports, many from local affiliates, and few live remotes. In depth interviews were few and far between. Story redundancy was heavy. Like the Doc Blocks, Kaplan didn’t want it I hear but it was forced upon him.

Things stayed this way for several months and MSNBC news viewers, at least the ones I would see on the internet, hated it. Meanwhile, all the battles between Kaplan and 30 Rock took its toll and soon enough Kaplan was jettisoned and Dan Abrams was installed as GM.

Abrams, to his credit, started to undo some of the things that were forced upon Kaplan, beginning with the half hour wheel. The problem for Abrams, hindsight now shows, is that he was forced to work within the restrictive boundaries for MSNBC that had already been established by 30 Rock when Kaplan was still in charge. That didn’t give him a lot of options other than to try and make what they were allowed to do now look as good as possible. Remember, the focus now as far as NBC was concerned was to keep MSNBC good enough, to not marshall a frontal assault against CNN. And, above all, MSNBC was to continue to be as profitable as possible.

Weekend News after 12pm was killed. I had thought it was because of ratings. But I have subsequently learned that the ratings, while borderline vs. the non-topical docs that followed it, weren’t the primary reason. The primary reason was the cost of putting the news on the air. Given the choice of putting on high overhead news vs. low overhead docs which generated similar numbers, NBC chose to go the more profitable route.

Then came NBCU 2.0. MSNBC was going to move to 30 Rock to streamline the operations (read: cut costs) and eliminate redundancy (read: cut costs). In the subsequent months, while MSNBC maintained the outward apperance of stablity, internally the cuts were starting to take their toll. Anchor Randy Meier had already been let go because they “wanted to go in a different direction”. I’ll say. They didn’t want to pay his salary which was set to get a substantial raise. Staffers who had been there for years and knew their stuff started leaving or were eliminated as part of the cuts. Other on air talent took substantial pay cuts to remain with the network.

The day MSNBC moved to 30 Rock was not the beginning of a new era as much as it was the completion of a process started nearly two years earlier with the departures of Neal Shapiro from NBC News and Rick Kaplan from MSNBC and the drive to get MSNBC under the direct physical, creative, and budgetary control of NBC News and maintain the new order of doing things the most cost-efficient way possible.

But there is a price to be paid for this and that price is the ability cover news adequately compared to the competition. We’ve already been witnessing this through the 2008 campaign season. How often during the week do you see Lee Cowan or Kelly O’Donnell’s face on MSNBC compared to the number of times you hear their voice by a phone in report? The ratio isn’t even close. And the reason is cost. All it costs for a phone in is a cell phone. No satellite required. No camera crew on standby. It’s cheap to do. But it’s totally uncompelling, particularly if you should change channels to CNN or FNC and see what they’re doing.

Take a look at NBC Nightly News sometime after watching MSNBC during the day. You’ll marvel at the disconnect. Half of the stories on a given Nightly are never touched on MSNBC dayside. I get a kick out of hearing Brian Williams occasionally get queried by an MSNBC anchor about what’s coming up on Nightly and whether they’ll be covering some celebrity scandal that was on MSNBC that day and he’ll always say “No!” Williams gets it. Does MSNBC?