Universal Pictures – Competitive Position

In a competitive environment, characterized by a small number of strong, well-positioned firms, it is imperative for Universal to focus on the unique combination of resources and capabilities that can confer a sustainable competitive advantage. To gain insight into how Universal is positioning itself in today’s diverse world of multi-media entertainment, one need only look at their stated goal: “development, production and marketing of entertainment, news and information to a global audience” [Source 1].

A number of assumptions can be inferred from the above statement. First and foremost is that parent NBC Universal will continue to seek a strategy that is both vertically integrated through every stage of content development, production and distribution as well as horizontally integrated across established and emerging content distribution channels, such as film, television, resort destination and internet. Secondly, is that this vertical and horizontal integration strategy will not be limited to the United States, but will be pursued on a global scale. Lastly, is that the integration occurring between Universal’s infrastructure operations and parent company GE’s energy efficiency efforts will increase, yielding cost reductions and product improvements for NBC Universal and GE, respectively.

To gain insight into how Universal fits into its parent company’s overall strategy, it is imperative to identify the resources available. The NBC Universal Television Network, broadcast to an estimated 99% of homes in the U.S., derives its strength from the combination of NBC’s strong national identity with the local programming of the independently owned affiliates [Source 2]. The network itself, comprised of NBC Local Media, Telemundo and NBC Entertainment, develops multi-lingual local and national content that has garnered more Emmy awards than any other network in history. To Universal Studios, this network represents a high yield distribution channel for its catalog of successful feature-length films. The home is also where NBC Universal hopes to build grass-roots support for its “Get On Board” program to make the firm “one of the most environmentally conscious companies in the industry” [Source 6]. Employees and communities will be tapped as the source for innovative solutions and a market for GE’s existing line of “Energy Star” products.

An emerging and increasingly important business segment is NBC Universal Digital Media (UDM). Charged with setting the company’s digital media strategy through content and distribution efforts, this segment is actively engaged in developing the business model that will harness emerging technologies. UDM is focused on development of:

  1. The digital distribution business model through the Peacock Equity Fund, a VC collaboration with GE Commercial Finance;
  2. Digital infrastructures such as on-demand, interactive TV, broadband, wireless and Internet Protocol Television (IPTV);
  3. Digital Content Development through Hulu.com, an online video service offering content from Universal, Fox, Sony Pictures, Warner Brothers, NBA and the NHL [Source 3].

Of particular note is the emergence of Hulu, a modular alliance between Universal and News Corp., built on the recognition that developing the standard for internet content distribution is not possible without a large number of allies who all share in the spoils [Source 6].

A large portion of the content, theatrical and non-theatrical, available through NBC Universal’s other channels is developed by Universal Pictures. The studio’s business strategy, in typical GE subsidiary fashion, focuses on diversification, international expansion, utilization of distribution channels and risk management through the effective use of its numerous production agreements, Home Entertainment Group and Focus Features niche studio [Source 4]. The aforementioned “Get On Board” program has tasked the studio with the production of content that educates the public while establishing Universal as the standard for environmental responsibility [Source 7].

The most immersive of Universal’s business segments is its Parks and Resorts. Here Universal’s most successful franchise’s are constantly on display in various forms of distribution. Behind the scenes, the properties are leveraging power generation and water reclamation technologies that are a cornerstone of GE’s global commercial operations yielding benefits to the Universal and improving the parent company’s products. With stateside operations in California and Florida, and international offerings in Japan, Dubai and Singapore, Universal Parks and Resorts support the parent company’s multi-channel, international push to leverage and promote its entertainment offerings.

The studio’s creative excellence, as demonstrated by numerous Academy Awards, distribution reach and parent GE’s financial resources will help Universal capitalize on emerging opportunities, regardless of the economic climate. The company’s track record of successful development, production and marketing of entertainment, news and information to a global audience is made possible by the effective integration of the resources and capabilities that reside in its Television Network, Digital Media, Film and Theme Park business segments. The emergence of a global, digital distribution channel comprising film, television and information uniquely positions Universal to profitably harness the future of global content delivery.

1. "NBC Universal > Company Overview." NBC Universal. 25 Mar. 2009 <http://www.nbcuni.com/About_NBC_Universal/Company_Overview/index.shtml>.

2. "NBC Universal > Television Group." NBC Universal Television Group. 25 Mar. 2009 <http://www.nbcuni.com/About_NBC_Universal/Company_Overview/overview02.shtml>.

3. "NBC Universal > Digital Media." NBC Universal Digital Media. 25 Mar. 2009 <http://www.nbcuni.com/About_NBC_Universal/Company_Overview/overview05.shtml>.

4. "NBC Universal > Parks & Resorts." NBC Universal Parks & Resorts. 25 Mar. 2009 <http://www.nbcuni.com/About_NBC_Universal/Company_Overview/overview07.shtml>.

5. "NBC Universal > Universal Pictures." Universal Pictures. 25 Mar. 2009 <http://www.nbcuni.com/About_NBC_Universal/Company_Overview/overview06.shtml>.

6. "hulu: Hulu.com Opens to Public Offers Free Streams of Hit TV Shows, Movies and Clips." Hulu - Watch your favorites. Anytime. For free.. 12 Mar. 2008. 25 Mar. 2009 <http://www.hulu.com/press/launch_press_release.html>.

7. "NBC Universal > In the News." NBC Universal. 24 May 2007. 25 Mar. 2009 <http://www.nbcuni.com/About_NBC_Universal/In_the_News/>.