7 thoughts on “How Apple Should Handle NBC”

1. Adam,
   In your opinion, why would Apple want to tie a millstone around its neck?

2. Apple could have some serious fun with MSNBC, they could even turn it into a profit instead of the enormous black hole for money that it currently is.

   Well written blog, very glad I ran across it.

3. Hi John,

   I think the only millstone at NBC is its executive team, and that’s a really quick fix. It’s not really their fault, per se. The problem is that digital content requires a fairly radical change in strategy, and NBC (as part of GE) needs to regularly deliver incremental results.

   Apple, acting like a private equity buyer, could effectively ignore quarterly results for the short term, restructure their business, and put them on a long term track that would be better for NBC, Apple, and likely the industry. In fact, since NBC concessions on content would likely boost Apple revenue (iPod, iPhone, iTunes), Apple is even better than a private equity buyer because the transition could potentially pay for itself.

   With ABC and NBC moving in the right line, aggregating the rest will get simpler.

   Adam

4. Adam,
   Sinergy…it’s that hope again. While you make an appealing but uncompelling case, history (Time, AOL, Warner) has disproven the much hoped-for benefits of synergistically fusing two or more companies that, in theory, would aid each other.

   Well, you just described the very millstone. Apple only gingerly develops/buys sofware companies, but only when it helps it sell hardware, and this is a very focused use. NBC is large, I think, and would divert, drag down, and perhaps slow innovation in hardware that is its life-blood.

5. Hi John,

   I think NBC only turns into a millstone if Apple keeps it. This would purely be an acquisition to change management, set a new strategy, establish contracts, and spin off.

   They would never ever thing of the two as a permanently combined entity. There would never be any “fusing”.

   In fact, Apple could buy it, leave it a wholly owned subsidiary, and literally run then separately as two completely different companies, so there is minimal leakage and interference with the core business.

   Adam

6. People seem to be under the impression that NBC creates content like a factory. Most of what they air is produced by production companies wholly independent of NBC. (Like “Dick Wolf Productions”) or even other studios (Warner Brothers).

   Most of those that are produced “in-house” are non-fiction content (The Today Show, The Tonight Show, Late Night, Later, The Nightly News, and Dateline) and are all done at 30 Rock.

   Apple needs Dick Wolf, Chuck Lorre, and the estate of Aaron Spelling to bypass the networks, and sell direct on iTunes. They can sell for half the price and still make more without the middleman.

   Why is NBC speaking for Miami Vice? Where is Michael Mann?

7. Adam,
   OK, what you described has successful precedent with ClarisWorks, renamed AppleWorks that remains (I believe) as an Apple subsidiary, and does not appear to have become a millstone around Apple’s neck.

   In another example, Pixar, while not a subsidiary, and formerly owned by Steve Jobs as his private possession, not Apple’s, did not seem to be a millstone either. Of course, it would have been tied around Job’s own neck. Jobs allowed Pixar to be run by its own, independent management that he highly trusted, while he relegated himself to remaining a kind of benevolent general manager at the same time that he devotedly ran Apple. Should he personally purchase NBC, (don’t know of he has the funds), then he would do as you say, “change management, set a new strategy, establish contracts, and spin off.”

   AppleWorks does not aggressively develop its program and seems content to remain small in the sense of features and capabilities. If it was more, it would directly compete with MS’s Works, which is likely not the intent, and guarded by a much stronger competitor — in the area of business software — by temple felines with open jaws and displayed claws. This implies that Apple Works uses a lower level of resources to keep it from confronting MS. But, with more resources devoted to it, and more energy expended, leading to a likely turf war with MS, it might have turned into a millstone around Apple’s neck. But it has not.

   But AppleWorks offers a template of sorts for a method to permanently subsume NBC into Apple. Should this occur, would Apple ratchet down NBC’s competitiveness so as to become less of a threat to CBS and ABC in order to be able to save its resources for its core business? It’s possible that NBC under Apple could already adequately satisfy Apple’s users with content from the NBC vault. Would this be good business sense for Apple? If it goes this route, might it then periodically develop its own content (like HBO) while avoiding the millstone effect?

   But you call for a temporary match, a midday quickie that might satisfy both parties, I guess Apple playing the doctor while NBC playing the patient, asserting that NBC suffers from a malady and needs repair. You define the malady as incompetence from top management, and you demand its exit to fix it.

   Or it could sell it. Once contracts beneficial to Apple (and this implies lots of things in economics and fiefdoms that I am not familiar with) are set in place, it can be sold to an independent party or even sold to Apple to become subsumed like NeXT. Of course, I know that NeXT staff was kept while NBCs would not.

   If like Claris, well, this offers one model of success; if like NeXT, it offers another model of success, yet history has shown otherwie, that typical synergistic welds create an operational viscuousness, on the one hand, or an incompatibility between the two cultures, on the other, neither being easily overcome.

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