Steve Burke on Wednesday echoed a familiar refrain , telling investors that NBC has “a long way to go” before it truly can be said to have regained its standing with its broadcast network rivals.
Speaking in a Q&A session during Comcast’s first-quarter earnings call, the NBCUniversal CEO allowed that the Peacock is “underperforming,” before adding that there have been signs of improvement. “I think we’re starting to make some progress,” Burke said. “We’re headed out to look at pilots. And, of course, we have the upfronts coming, and we’re optimistic.”
In the first three months of 2012, NBC revenue was up 37 percent versus the year-ago period, to $1.85 billion. Excluding the $259 million NBC booked with Super Bowl XLVI , network revenues grew 18 percent to $1.59 billion.
Comcast did not break out ad sales numbers for NBC, saying only that the overall revenue gains were a function of “higher prime-time ratings and higher revenue from a content licensing agreement.”
The network posted an operating cash flow loss of $10 million, compared to a gain of $20 million in Q1 2011, reflecting its investment in midseason programming and the associated marketing costs that new launches demand.
Among the new scripted series that premiered outside of the fall window are the dramas Smash, Awake and The Firm and the comedies Best Friends Forever and Bent.
Of these, only Smash  will return for a second season. NBC renewed the musical drama in March, back when it was averaging 7.7 million viewers and a 2.6 in the adults 18-49 demo. Monday’s episode served up a series-low 5.34 million viewers and a 1.8 in the dollar demo.
Smash is a particularly expensive series to produce, boasting lavish song-and-dance numbers that have pushed the per-episode cost to as much as $4 million. In the weeks leading up to the show’s post-Super Bowl launch (Monday, Feb. 6), NBC also laid out some $25 million in marketing expenses.
The other midseason series have tanked completely. The psychological drama-cum-procedural Awake  last Thursday averaged a mere 2.21 million viewers and a 0.8 in the demo, while time slot precursor The Firm fared so poorly in its first month on the air that it eventually was relegated to the Siberia of Saturday night.
Season to date, NBC ranks fourth among all broadcast nets with an average nightly draw of 7.47 million viewers and is in third place in the demo (2.5, up 8 percent vs. last year). NBC leads ABC by one-tenth of a ratings point, although if one were to strip out the Super Bowl from the season averages, ABC is actually in the lead (2.4 vs. 2.3).
The cable networks unit remains the engine of the company’s growth, accounting for $2.14 billion in revenue, or 39 percent of NBCU’s total Q1 haul of $5.47 billion. Ad sales revenue improved 6 percent.
“The cable channels are really the heart of current cash flow and continue to do well,” Burke said. “We’re investing in them, and I think those represent an opportunity over time.”
As powerful as the cable portfolio is, Burke realizes that the broadcast unit’s underperformance is chasing a great deal of cash away from NBCU’s war chest. “If we got up to the level of our peers…there are hundreds of millions of dollars worth of opportunity just getting to average in that business.”
Looking ahead to the upfront marketplace, Burke acknowledged that there is still work to be done in closing cable’s CPM gap. “The fact of the matter is a lot of our cable networks don’t have the CPMs that they should have relative to their peers,” Burke said. “Given the ratings we have and the value we’re providing…we have a real opportunity over the next few years to get paid more for that.”
After many years of laboring under the weight of disproportionately low CPMs—the legacy of a rash decision to slash 2002-03 upfront pricing by 10 percent in a bid to move more inventory—NBCU cable flagship USA Network began righting the ship just last year. In his first year at the helm of NBCU’s cable sales team, Comcast veteran Dave Cassaro enjoyed a record upfront , boosting volume by 25 percent across the portfolio while booking some of the marketplace’s highest rates at USA and Bravo.
As a reward for his wildly successful oversight of its cable inventory, NBCU forced Cassaro out of his job in October, just three months after the upfront wrapped.