The Asia Media Journal
April 17, 2014
PEOPLE

 


'Our Business Isn't Running Well Yet'

“In Asia we have a lot of different channels, and most of them lose money,” says NBCUniversal International president Jeff Shell.

“What we should have is less channels, and more quality channels that make money.”

Big changes are afoot at NBCUniversal, the storied TV and movie studio that was formally acquired by US cable and broadband giant Comcast in January, creating one of the biggest media companies in the world. Despite its size however, 92% of the combined entity’s revenues still come from the US, a much higher ratio than peers such as News Corp and Discovery. 

Shell, former president of Comcast Programming Group before taking up his new job earlier in the year, has been charged with delivering a healthier balance.

A more immediate priority however is knocking the current business into shape. A well-run business is vital as a platform for growth, Shell says, focusing his time for now on profitability rather than expansion.

“I don’t think our business is running well yet,” he said, speaking in an interview with Asia Media Journal.

“Portions of it are, and we have some really good people,” Shell adds. “But the reality is we need to look at each market and each business segment and really get the structure of the business right, the people right, and more importantly get people working together.”

A shake-up of international operations implemented earlier this year, bringing content sales, networks and production businesses closer together, should help strengthen the bottom line.

Christine Fellowes, former MD of Comcast International Media Group in APAC, was promoted to Universal Networks International APAC MD in June, one of three executives overseeing the region alongside LA-based Justin Che, sales liaison SVP for international TV distribution, and Satpal Brainch, Asia president of news network CNBC.

Meanwhile, a drive to ramp up hit shows and bigger event movies in the US is aimed at rejuvenating an aging library that still remains a critical engine for international revenue.

“Our two biggest franchises internationally, House and Law & Order, are both getting pretty old,” Shell notes.

Local production
At the same time, with the value of US content overall declining in Asia, Shell wants to ramp up NBCU’s local production in the region, including Japanese anime business Geneon and a Malaysian hub focusing on Asian language versions of US and European formats, as well as recent Australian acquisition Matchbox, which is also geared to the English-language export market.

Shell is also planning one to two more Universal theme parks in the region, adding to current properties in Japan and Singapore, which have helped boost NBCU’s flagship channel brand, Universal.

These however are medium-term plans, with the current push for profitability placing NBCU’s current channel portfolio, and how they are programmed, in the spotlight. Although channels such as Diva Universal and E Entertainment are relatively well established, others have a looser footing.

“We’re focusing on quality, not necessarily quantity,” Shell says. “Christine Fellowes is now across that whole business, looking at each of our markets and saying: how do we bolster the businesses we have, in some cases scale back the businesses we have?

“It’s not because we’re cutting costs, it’s really looking at maximizing operationally the business we have.”

The bigger goal is expanding the share of international revenues from 8% to 20%, though no timeline has been set, Shell says. In Asia-Pacific, this reopens the door to major investments and partnerships in key markets such as Australia, China, India, Japan and Korea, in both content and distribution.

Integrated strategy
Shell is no hurry however, favouring an integrated strategy over one-off investments, particularly as a worsening economy is likely to bring more options to the table over the next one to two years.

“I don’t think you can dabble,” he says. “I think that’s where companies like NBCUniversal have got into trouble, where we’ve either announced we’re going to launch a bunch of things, or announce we have a certain target for growth, or made small investments here and there.

“You can go back and look at the history of NBCUniversal International, and it really is defined by all those things.”

More on… NBCUniversal
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With money to spend from Comcast’s profitable pay-TV and broadband distribution businesses in the US, the goal is to repeat some of the considered but audacious deal-making that has helped transform the parent company from its origins as a local cable network in the southern US state of Mississippi nearly 50 years ago.

Shell is ready to move opportunistically, particularly in places like India, a key anchor market for pay-TV growth, but also declares himself happy to wait, for years if need be, figuring out the right partners and right strategy in the meantime.

“Our company will generate more than US$60 billion this year [from cable in the US, plus the overall NBC business]. You are not going to increase share of revenue outside the US by launching a channel here or there or making a small investment,” he says.

“It’s going to have to be ultimately picking a growth strategy which is going to get you to scale in any number of places and in any number of businesses. Realistically, we’re years away from that.”

Jeff Shell’s onstage interview at the annual conference held by pay-TV association Casbaa can be seen here.

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