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NBC Hurting Comcast's Bottom Line

Broadcaster's operations struggles dominate earnings call
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Comcast's acquisition of NBC Universal closed at the end of January, but the deal still dominated the discussion during a conference call Comcast held Wednesday to discuss its performance during the first quarter of this year. And not in the way Comcast might have liked.

The continuing struggles of NBC's broadcast operation were highlighted by a sharp revenue decrease—down almost 35 percent compared to the same period last year. That decline, though, was primarily caused by the lack of the $782 million that the network made thanks to the Olympics last year. That aside, NBC's broadcast revenue increased a mere 4 percent year over year.

Company executives repeatedly discussed improving NBC’s broadcast performance by bolstering its programming. “The real key is making better shows,” said Steve Burke, CEO of NBC Universal. The company plans to produce 21 pilots this year—about the same number produced last year—"but it’s a matter of doing better," Burke said. The company intends to invest $200 million this year as it attempts to catch up with its peers. Burke acknowledged that this turnaround would be a "multi-year process," but also said that even moving from fourth to third place among the broadcast networks would "be worth hundreds of millions" of dollars for the company.

With the premiere of The Voice, however, Comcast feels it is already seeing at least some of the type of programming it hopes will give NBC a much needed boost. The show, a reality singing competition starring Christina Aguilera and Cee Lo Green, drew a surprising 12 million viewers to its premiere in late April; ratings for its second airing last night were up by 8 percent. In both cases, the show won its time slot.

On the cable side, NBC Universal’s networks continued to deliver strong performances, which resulted in a 13 percent increase in revenue, to $2 billion. The company thanked its cable networks E! and Bravo for contributing to this jump—both networks had their highest rated quarters ever.