NBCUniversal CEO Says Tokyo Olympics Will Be Profitable Despite 'Bad Luck'

The Tokyo Olympics were supposed to be a home run for NBCUniversal, which was counting on the Games not just to provide a windfall of advertising revenue but to serve as a global launchpad for its year-old streaming service Peacock. But after tepid opening ceremony ratings and a host of other pandemic-related complications, the Comcast-owned broadcaster is acknowledging it got started on the wrong foot. “We had a little bit of bad luck, and this drumbeat of negativity,” NBCUniversal CEO Jeff Shell admitted to investors Thursday morning. “We got moved for a year and no spectators. And this probably resulted in linear ratings being probably less than we expected.” As Adweek reported earlier this week, NBCUniversal isn't hitting the panic button, as the Games' rating declines shouldn’t impact the approximately $1.25 billion in Tokyo Olympics ad revenue it has sold. The Olympics Is Showing Its Age as Major Brands Question Whether It’s Worth Advertising In The company is also looking to leverage its digital properties, including Peacock, which went into the Games with 54 million customer sign-ups—a 50% jump from the company’s previous quarter, when the company reported 42 million sign-ups for the mostly ad-supported streaming service. On the streaming side, NBCUniversal is “particularly happy with both the volume on Peacock and the CPMs” that the company secured during this year's record upfront, Shell said. Overall, the broadcaster was able to secure double-digit increases in both volume and pricing, “the strongest advertising upfront in our history,” Comcast CEO Brian Roberts said. (Adweek previously wrote about NBCUniversal's record upfront, which surpassed 2019's haul of nearly $7 billion.) Peacock spreads its wings Of Peacock's 54 million sign-ups so far, about 20 million are monthly active users, executives said this morning. (The company continues to remain mum on how much content those users who have signed up are watching, or how many of them are paying for Peacock’s two premium tiers.) Because the second quarter ended ahead of the Olympics, those results are mainly due to the day-and-date film release of the animated Boss Baby 2: Family Business on the streaming service and the original limited series Dr. Death, starring Alec Baldwin and Christian Slater, which is so far the streamer’s best-performing original series. As people sign up for Peacock during the remainder of the Olympics, the company is focused on figuring out how to keep them coming back—something that will surely be aided by a full production calendar on the television side that will continue delivering originals to the service. “The third quarter thus far has been a particularly strong period,” Roberts told investors. “We will work hard to manage retention and grow from here, recognizing we are unlikely to replicate such tremendous performance—but we are optimistic.” On Peacock, what we will learn in this Olympics we’ll take to Beijing.Jeff Shell, NBCUniversal CEO While Comcast and NBCUniversal executives touted the streamer's growth, executives made clear that the platform is still secondary to its linear arm. That approach is made evident in the quarterly results: Revenue in the NBCUniversal segment was exceeded $7.9 billion in the quarter, a 39% increase compared to a year ago, and advertising revenue was up 33% due to more live sports on the network and as advertisers continued to return to television. (Peacock’s contributions to those figures remains minimal.) “Peacock adds to what we already offer," Roberts said. "It’s a great complement to our linear brands, which are successful in their own right." Roberts’ decision to frame Peacock as a complement to—rather than a replacement for—the company’s linear business is also evident in NBCUniversal's programming strategy around the Olympics, where many live match-ups, save for competitions like women’s gymnastics and men’s basketball, have required a cable subscription to view. But that programming approach could very well change when the Winter Olympics—which NBCUniversal also has the rights to—rolls around in six months. “We’re learning a lot as consumption happens during the Olympics,” Shell said. “On Peacock, what we will learn in this Olympics we’ll take to Beijing.” International expansion As Peacock continues to spread its wings, it’s eyeing an international expansion. Later this year, Comcast, which owns British broadcaster Sky, will add Peacock to Sky’s 20 million customers in Europe at no additional cost. That expansion will add additional incremental advertising revenue for the company in those European markets while expanding Peacock’s brand recognition internationally, Roberts said. As Peacock grows, the company is planning to put more money into the streamer, but will keep the investment conservative. Instead, the company is looking for ways to leverage existing content it already has, including through Universal Pictures, by coming up with ways to lease out its content to streamers like Netflix and Amazon Prime Video while retaining some of the rights themselves beginning in 2022, allowing the company to generate third-party revenue while also wooing viewers in certain months. “We look at where we are today and, being much further ahead than we expected to be at this point, we’ll probably ramp up our investment modestly compared to what we had done in the past,” Shell said. “We have so much content coming to Peacock that it doesn’t have to be significant.” Tokyo Olympics Primetime Ratings Stumble, But NBCU Still Eyes Big Ad Revenue