NBC in Trouble

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Case Details:

Case Code : BSTR233
Case Length : 24 Pages
Period : 1990-2006
Organization : NBC
Pub Date : 2006
Teaching Note :  Available
Countries : US
Themes : Failure of Strategy | Revival | Competition | Trends
Industry : Media and Television Broadcasting

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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NBC Slips in Ratings

The ratings woes for NBC started in February 2001, when CBS shifted its blockbuster reality series Survivor to Thursdays (between 8:00 and 9:00 pm) opposite Friends on NBC.

To counter this, NBC increased the duration of Friends by 10 minutes (up to 8:40 pm) to affect the second half of Survivor. CBS also moved its crime series CSI: Crime Scene Investigation after Survivor to take on NBC's Will & Grace. When the ratings for the first week were reported, Survivor beat Friends convincingly even in the 18-49 demographics.

Though NBC was still the winner with four of its shows featuring in the Top 5, CBS exposed NBC's vulnerability on Thursday nights.

CSI had lost to Will & Grace, but its popularity rose continuously. Even so, NBC had topped the overall ratings for the year 2001-02...

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The Turnaround Efforts

To revive its sagging fortunes, NBC turned its focus to sports. Zucker said, "Sports is going to play a critical role in the rebuilding of NBC prime time." On April 18, 2005, NBC finalized an important six-year deal with the National Football League (NFL) to bring back the NFL telecasts to the channel after having lost the rights to CBS in 1998. The deal was the result of ABC's, decision to not to renew the contract with NFL for the NFL season starting in 2006...

What Next ?

NBC's revenues for the year 2005 were down by 23 percent to US$ 5.1 billion while all other networks gained revenues. The year 2006 had not changed NBC's fortunes by much.

NBC's hopes for the Winter Olympics in February 2006 were dashed as viewership was down 34 percent as compared to the 2002 Winter Olympics.

Though the poor performance of the US athletes was one of the reasons, the viewership loss was primarily due to competition from American Idol, Desperate Housewives, Grey's Anatomy, Survivor, etc...


Exhibit I: Profile of Major Competitors of NBC
Exhibit II: Top Primetime Network (1994 - 2006)
Exhibit III: NBC Logo
Exhibit IV: Primetime Rankings (2005-06)
Exhibit V: The US Television Industry
Exhibit VI: Top Television Programs (1980 - 2005)
Exhibit VII: Must See Television
Exhibit VIII: Business Of NBC Universal

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