Jeff Zucker, the chief executive of NBC Universal, said Tuesday the broadcaster was moving to save as much as $50 million a year by reducing its reliance on expensive pilots of new series on the NBC television channel.
The decision to eliminate most pilots was made as the company looked for ways to cut costs in response to the Hollywood writers’ strike and the slowdown in the economy, Mr. Zucker said. “It’s clear we are in a recession in the United States, and we’re going to have to manage our business accordingly,” he said.
Networks like NBC have long relied on big-budget pilot episodes of television series in an effort to attract advertiser support for the rest of the season. But Mr. Zucker said the pilots, the first episode of a show and whose production cost has shot up to $7 million for an hour from about $3 million three years ago, were a poor indicator of the future success of a series and many never move beyond the pilot stage.
“So you’re spending money on programs you’re not going to get,” Mr. Zucker said.
He said NBC might still commission “one or two” pilots a season, but would not do so as a matter of course.
Other networks are making similar calculations. A senior executive at one of NBC’s competitors said Tuesday that “we will definitely do fewer pilots than we have before.” This executive, who asked not to be identified because the network has yet to make its plans public, added that it had cut the number of scripts ordered for next season in half.
Mr. Zucker acknowledged that one reason for the decision was that NBC has suffered from weak prime-time ratings for the last several seasons. “Sometimes you see the world from a different perspective when you’re flat on your back,” he said. “At NBC Entertainment we’ve been flat on our backs for the last few years.”
Mr. Zucker was in London during a stop on the way to the World Economic Forum annual meeting in Davos, Switzerland. He addressed NBC Universal’s 16,000 worldwide employees in a “town hall” videoconference — the first time, he said, that the company had conducted such a meeting from London.
NBC Universal, which is 80 percent owned by General Electric, with 20 percent held by Vivendi of France, has been trying to build up its international arm, with Mr. Zucker setting a goal of increasing its revenue from outside the United States to $5 billion in 2010 from $2.8 billion in 2006.
The company also said Tuesday that it had agreed to purchase a 26 percent stake in a unit of New Delhi Television of India that owns several entertainment channels aimed at the Indian market. The investment, valued at $150 million, comes after several other international expansion moves last year by NBC Universal.