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NBC Universal Announces NBCU 2.0

NBC Universal announced NBCU 2.0, a wide-ranging strategic initiative to assure future growth, streamline and strengthen operations and exploit opportunities created by the rapidly evolving digital and global marketplace.

NBCU 2.0 will maximize the potential of the entire NBC Universal portfolio, including broadcast, cable, film and theme parks, by creating operating efficiencies and reallocating resources to invest in new growth areas. The initiative continues the evolution of NBC Universal, marked in recent years by significant investments such as Vivendi Universal Entertainment, Telemundo and iVillage. NBCU 2.0 will enhance ongoing efforts to redirect traditional analogue resources toward high-growth digital areas and international expansion.

"Success in this business means quickly adjusting to and anticipating change. This initiative is designed to help us exploit technology and focus our resources, as we continue our transformation into a digital media company for the 21st century," said Bob Wright, vice chairman of GE and chairman/ceo, NBC Universal.

The company-wide initiative is expected to reduce the company's annual administrative and operating expenses by $750 million by the end of 2008. It will also result in workforce reduction of approximately 700 positions, about 5%, over the same time period.

In many cases, savings will be reinvested in higher-growth areas. Digital revenues are expected to exceed $1 billion by 2009. Recent growth has been driven by initiatives such as the partnership between Yahoo and Telemundo to develop the leading Hispanic Internet destination; the launch of NBC WeatherPlus, nbbc, nbcsports.com, cnbc.com and dotcomedy.com; the creation of several other original broadband channels; the development of interactive television and digital cinema applications; and the delivery of a 360-degree content experience via online and wireless platforms.

As part of NBCU 2.0, the business models in news and entertainment will be further adapted to exploit the opportunities of the changing media landscape.

Said Jeff Zucker, ceo, NBC Universal Television Group, "NBC Universal 2.0 will prepare us for future growth from a position of strength. With new momentum in prime time at NBC, continued leadership from NBC News, real growth at Telemundo, and solid performances in virtually every other division of our Television Group, there is no better time to re-engineer the company for the revolutionary changes to come. We have to recognize that the changes of the next five years will dwarf the changes of the last fifty."

On the entertainment side, the TV Group will maximize its ability to generate revenues across all platforms - including new digital distribution outlets through a business strategy that reduces NBCU's dependence on traditional content distribution methods and advertising models. This includes bringing content to consumers sooner on a variety of platforms, creating new windows or opportunities in the traditional syndication market, and developing alternative advertising metrics.

NBCU 2.0 will also continue to make the growing Hispanic market a priority, as highlighted by the significant recent investments in Telemundo's prime-time production, a new studio and news bureau in Mexico, and the acquisition of three TV stations in the last 18 months.

For Universal Studios, the initiative will focus on the recent developments in technology and media that are transforming the film industry, with the goal of competitively positioning the Studio for continued growth and success.

"As a business we are continually looking to be smarter about how we develop, distribute, and market our films around the world," said Ron Meyer, president/coo, Universal Studios. "We plan to realign our operations to maximize growth opportunities in an increasingly competitive and evolving industry. Making these changes now will reinforce our position as an industry leader."

The strategic realignment of domestic theatrical, home entertainment and television marketing and distribution divisions will realize cost savings through consolidating positions and maximizing efficiencies across all aspects of the business units. Savings will also be realized though consolidating locations, support functions and marketing activities at Universal Pictures Intl, Universal Pictures Intl Ent. and NBC Universal Intl Television Distribution.

Universal Parks & Resorts Group will continue to look for strategic growth opportunities and cost reductions at their properties in Los Angeles and Orlando.

NBC Universal is one of the world's leading media and entertainment companies in the development, production, and marketing of entertainment, news, and information to a global audience. Formed in May 2004 through the combining of NBC and Vivendi Universal Entertainment, NBC Universal owns and operates a valuable portfolio of news and entertainment networks, a premier motion picture company, significant television production operations, a leading television stations group, and world-renowned theme parks. NBC Universal is 80% owned by General Electric and 20% owned by Vivendi.

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