The completion of NBC's purchase of Vivendi Universal Entertainment in May 2004 created a formidable content player within the video-on-demand and pay-per-view arena. The deal combined the already well-established Universal Studios VOD and PPV movie units with content held by broadcast network NBC and cable channel Bravo, as well as USA Network and Sci Fi Channel. Overseeing NBC Universal's vast library of potential on-demand content is Jean-Briac Perrette. Multichannel News programming editor R. Thomas Umstead recently sat down with the NBC Universal senior vice president to discuss a number of topics, including the company's plans to offer its TV content via VOD and the potential of reducing VOD and PPV movie windows for Universal theatricals. An edited transcript follows:
MCN: Is there a possibility that some of the original programs from NBC Universal's cable networks will migrate to PPV and VOD?
JBP: Yes. As it relates to our cable and our network shows, we've spent a lot of time over the last several months developing on-demand platforms for each of our networks — a USA On Demand, Sci Fi On Demand, NBC On Demand, etc. — and we're prepared to go to market with a very robust and unique broad and deep offering of content, unlike anything that's been seen in the on-demand space today. It would include some of our best shows, including the Law & Order franchises, Vegas, as well as other shows on USA like Monk. In other words, we're talking some of the A-quality content that is missing from the on-demand platform today.
The issue there is that there is real cost associated with doing that and we just need to work out an economic agreement with the operators to allow us to do it without essentially eating a lot of cost.
MCN: I would assume that it would be more of a subscription VOD model than a free VOD offering.
JBP: We're basically open to working with operators to offer it in a way that's most in line with their strategic goals. So in the case of a Comcast [Corp.], which is obviously pushing their free on-demand service, we would be willing to explore the free on-demand space for a lot of it. The issue is that free to the consumer is one thing, [but] free to the operator is not a model that could work.
MCN: When are you planning to launch the services?
JBP: It's really dependent on the progress of the commercial discussions with the operators. The reason why we're not alone in this field — and the reason why there hasn't been any A-quality network or cable content in the space — is that for the programmers, there are real costs associated with licensing these on-demand rights, as well as delivery costs and, in some cases, production and editing costs if we're talking about behind-the-scenes or exclusive footage. The challenge has been finding an economic model with the operators that allow us to actually cover that and making it a business as opposed to just [an expense.]
MCN: You oversee the VOD and PPV distribution of Universal movie product. Will you look to enhance such product by offering unedited versions or providing outtakes in an effort to provide more value?
JBP: We have our core movie VOD and PPV business, and we have offered more behind-the-scenes free teaser and promotional material — maybe a 15-minute preview that you could get for free to try to drive people to buy the movie. We see that as more of a great promotional vehicle, as well as a way for people to get some behind-the-scenes footage both for the operator and the consumer.
MCN: Are you looking for ways to shorten movie windows between PPV and DVD releases as another way to drive PPV and VOD movie buys?
JBP: That's been the industry's billion dollar question. But today, particularly when theatrical box office [revenues] has been declining and there have been questions as to whether we're going to start seeing a peaking of the DVD business over the next few months or years, there's a lot of sensitivity to doing it.
That's an area where we understand the desire and the interest of the operator toward doing it because it would be a real compelling product, but it's still a tough proposition in an era where the big gorilla theatrical and DVD businesses are so much bigger and under pressure. It's something we are certainly interested in exploring, but it's such a tough time to do it.
MCN: So most of the movies will remain in the 30 to 60 day window range?
JBP: That's right.
MCN: Is there a possibility of offering some of NBC Universal's sports events that it has rights to on PPV and VOD?
JBP: We have thought a fair amount about it, particularly with certain franchises like the Olympics. The reality is there's nothing specific on the horizon, but something that could happen down the road.
MCN: Do you have a desire to enter the PPV and VOD event ring by acquiring rights to boxing or wrestling?
JBP: We obviously love the wrestling business — as you know USA acquired the rights to [World Wrestling Entertainment Inc.], so we're big fans of wrestling. But they're already out working the PPV and SVOD side of the business. It has a real niche and cult-like following that would be great for the on-demand space. We'll certainly look at opportunities as they come up.
MCN: NBC Universal has offered outtakes and uncensored content from such franchises as the Jerry Springer Show and Blind Date. How has that been performing?
JBP: We've found it works well — the audience likes it, the operators like it and we continuously up the production and continue to do more of them.
We got into this as more of a trial two or three years ago and it was really some of the first content to hit PPV and VOD that was truly original and exclusive: we don't release this in other formats like DVD.
Second, these franchises, particularly Jerry, have a very loyal and fanatical fan base. They love to find additional stuff and additional outlets, and Jerry himself likes to find additional outlets for content. So the original and exclusive nature of it, as well as the loyal fan base that the series have, has made it a very popular item in the on-demand and PPV spaces.
MCN: Are you concerned that the uncensored-erotic PPV event genre may suffer from over saturation given the number of events in the marketplace?
JBP: We don't see saturation happening anytime soon. [Jerry Springer and Blind Date] are not adult content like the sex content that's really out there. We're taking a linear franchise and extending it to the on-demand space in an original fashion where you can get more of your favorite personality in Jerry and see it in a way where you wouldn't be able to see it anyway else. It's much more narrowcasting to a specific audience that you're trying to reach and we see it as a real growth era; there are many opportunities.
MCN: Any other shows that we would look to do that in Universal lineup?
JBP: We just launched a series based on the Laura daytime series on Telemundo. It's Jerry Springer-like, well-rated and very popular with the Hispanic audience. It's a daytime talk show that's been around for a very long time and has an incredibly strong following, so we decided to take that franchise to PPV. We'll do four initially; the first one [was released] July 1.