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Burke: NBC Profits 'Could Be Dramatically Higher'

Exec cheered by early successes but says there’s 'long, long way to go'

NBCU CEO Steve Burke

NBCUniversal CEO Steve Burke on Friday (Oct. 26) told investors that he isn’t satisfied by recent improvements at the broadcast division.

Speaking during Comcast’s third-quarter earnings call, Burke acknowledged that while NBC is “obviously … doing better, we still have a lot of businesses that are underperforming.

“Broadcast, I think, is our biggest opportunity and the fact that NBC has been No. 1 for the first four weeks of the season in demo is a very positive start for the season,” Burke said. “We want to continue that, but I think broadcast profitability could be dramatically higher than it is currently and hopefully we are going in the right direction on that.”

Through the first four weeks of the 2012-13 broadcast TV season, NBC is averaging a 3.1 rating in the adults 18-49 demo, which marks a 19 percent improvement from its year-ago 2.6. Meanwhile, NBC’s rivals are significantly underperforming: CBS is down 18 percent with a 2.7 in the demo, Fox has slumped 24 percent to a 2.5 and ABC is off 11 percent (2.5).

While the average ratings reflect Nielsen live-plus-same-day data, the numbers are largely consistent with the first sample of C3 data.

The bleeding isn’t nearly as severe at Spanish-language broadcaster Univision, which has slipped just 6 percent to a 1.5 in the demo.

NBC’s growth is largely a function of moving The Voice to a fall cycle, where it has proven itself a strong lead-in for the new drama Revolution and the Matthew Perry comedy Go On.

Season to date, The Voice is averaging 12.3 million viewers and a 4.4 in the dollar demo. After getting off to a solid start with a delivery of 11.7 million viewers and a 4.1 rating, Revolution remains the only bona fide new broadcast hit. The most recent episode, which aired Oct. 15, attracted 8.61 million viewers and a 3.3 in the demo.

Revolution has proven to be a great bargain for media buyers who steered their clients to the show during the upfront. During the spring bazaar, a client could secure a 30-second spot in Revolution for just $90,000, per SQAD NetCosts data.

Not surprisingly, NBC’s Sunday Night Football remains a juggernaut, averaging 21.6 million viewers and a robust 8.6 in the demo through eight broadcasts.

Burke said NBC’s early success should lead to greater gains “in terms of affiliate fees and advertising CPMs,” adding that he’s seeing “a lot of upside” at the broadcast unit. “We feel like we’re on the right path, but there is still a long, long way to go.”

Comcast chairman and CEO Brian Roberts was a bit more sanguine, noting that this year marks the first time NBC has won the demo in each of the first four weeks of the season since 2002. “It’s certainly early, but I believe and hope we are seeing the beginning of a turnaround at NBC,” Roberts said.

On the local stations side of the ledger, Burke said that even if political dollars were factored out of the equation, the O&Os were still up 6 percent versus the year-ago period. He added that the automotive category seemed to be particularly healthy.

While undoubtedly robust, political dollars were limited by geographic particulars. “Unfortunately we don’t own a television station in Ohio,” joked Comcast chief financial officer Michael Angelakis. “Most of our owned station markets did not have a lot of political because they were not in battleground states.”

At the tail end of Friday’s call, NBC briefly addressed the impact the National Hockey League lockout is having on its NBC Sports Network operations. “I can tell you we’re pretty disappointed with regard to the lockout,” Roberts said. “I don’t think we should say a heck of a lot more. I think that we’re just hopeful that the ownership and the players can get together and get on with the season.”

Comcast owns the NHL franchise Philadelphia Flyers.

NBCU’s Q3 revenues were up 31.2 percent to $6.82 billion, thanks in large part to the $1.2 billion generated by the 2012 London Summer Olympics. Broadcast revenue soared 83.8 percent to $2.78 billion, while the cable nets improved 23.6 percent to $1.36 billion.

Broadcast ad sales more than doubled, adding up to a tidy $1.99 billion versus $974 million in Q3 2011. Cable networks ad sales were flat versus a year ago ($807 million).

Excluding the impact of the Olympics, NBC’s broadcast revenue increased 5 percent on increases in pricing and volume.

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