NBC Universal another sign of old media's need to change

By Shira Ovide

NEW YORK (MarketWatch) -- News organizations have said they must innovate or die.

主流媒体现在应该是网络而不是电视广播

But NBC Universal's plans to streamline its news operations and invest further in online news are perhaps the starkest recognition so far that traditional media must make drastic changes as viewers and advertisers migrate to the Internet.

"No one has yet truly embraced the idea that online is now the dominant medium - not broadcast, not print," said Robert Niles, editor of the USC Annenberg Online Journalism Review. "Finally it's getting to the point where ... it's time to start competing very aggressively with the nimble startups online that have started to suck the audience away."

The rise of startups like online-video site YouTube Inc. are attracting increasing amounts of people's time - and advertisers' dollars.

"Advertisers are always looking for the most targeted opportunities and they're also looking for that next step," said Bill Carroll, vice president and director of programming at media-representation firm Katz Media Group. "Ultimately advertisers don't want to be left behind."

As a recognition of the migration of ad dollars, traditional media have invested in their own digital properties and - as NBC will do - cut staff.

The newspaper industry lost 3,500 to 3,800 newsroom jobs from 2000 to 2005, according to the Project for Excellence in Journalism. Venerable news organizations like the New York Times Co. (NYT), the Los Angeles Times and Washington Post Co. (WPO) have not been immune from the trend of shrinking newsrooms.

But few news organizations have committed to consolidating their operations as drastically as NBC. The company will drastically cut its news staff and move cable-news network MSNBC to NBC headquarters in Manhattan and Englewood Cliffs, N.J., home of CNBC. Dow Jones & Co. (DJ), publisher of this newswire, provides news content to CNBC in the U.S.

Carroll said the move will help MSNBC, a ratings laggard. "There are so many brand names out there from YouTube to ESPN," he said. "If you've got multiple brands out there in the marketplace, you might be confusing people."

In a similar move, Walt Disney Co. (DIS) this summer eliminated its ABC Sports brand name, a recognition of its convergence into sports network ESPN, which Disney also owns.

The moves are part of a broad restructuring at NBC Universal, where lackluster ratings at NBC have hurt parent company General Electric Co. (GE). The company said it will cut annual administrative and operating expenses by $750 million by the end of 2008, in part by cutting staff by about 5%, or 700 positions. The NBC broadcast network also will cut back on high-priced programming during prime-time hours.

Ultimately, Niles said NBC's steps will have the most lasting impact on its news operations by following the audience migration online.

"Corporations are recognizing that media are merging," he said, "and that they're holding back their news operations by continuing to slot people in one medium or another, rather than enabling them to work across multiple media."