GE owns NBC. That’s a fact. NBC not profitting as according to GE’s expectations. That’s a conjecture.
But rumors have it that GE is actually thinking of selling NBC because of the latter’s disappointing performance in the ratings and profits game. CEO Jeff Immelt says otherwise, and insists that GE is not selling NBC.
I was especially struck at this phrase (in bold font) on BusinessWorld Online’s article:
The media unit is plainly out of place in the massive conglomerate, for which in 2007 it provided just under 9% of revenue. While in ‘07 NBC’s profit margins topped all GE segments, its revenue growth lagged that of the overall company in ‘06 and ‘07 and slowed to 0.1% in the first half of 2008. And no one today forecasts stability for big media companies.
The stock price of GE has more or less stagnated since CEO Jeff Immelt took over in 2001, in part because the notion of bona fide multi-industry titans like GE is considered passe. (Even media conglomerates are now passe.) And the governing narrative of GE is hard to extend to NBC. A key tenet of GE exceptionalism holds that it adds value to anything it touches by obsessing over management and management processes like Six Sigma. But that which debugs, say, making turbines simply won’t work for the woolly and unstandardizable ways in which movies and TV shows are made.
That made me ask: doesn’t Six Sigma work for the movies and TV shows?
Somehow, I’m having a hard time reconciling that. Six Sigma might or should work for these industries, too.
Just discovered this blog and am enjoying it very much. I see no reason why Six Sigma couldn’t be applied to the production of television shows and movies. The net result, I think, would be a reduction in production costs. Not a bad thing, but it won’t make a huge difference to revenues.
As the article states, NBC’s profit margin is already the highest in the organization. What’s needed is increased revenue, and reducing production costs probably won’t make a big difference there. Increasing revenue means getting more eyeballs on the product and justifying increased advertising revenue.
It seems to me that NBC has to come up with more and better shows and market them better. How would you apply Six Sigma to this?
Specifically, can Six Sigma actually be applied to the creative process? Oddly enough, this exact topic was addressed on an episode of 30 Rock in which Jack, a hard-driving GE executive, tries to apply Six Sigma to the writing process.
Hi, Ben!
I believe that any process we can apply Six Sigma to, or any quality improvement methodology for that matter.
Top of the mind example:
Coming with good shows, or shows that viewers accept and love would probably need research or VOC.
With the data from VOC, you can do DMAIC. And the rest they say is history.