Cable Unit Props Up Ailing NBC

Broadcaster in Q3 endures poor ratings, flat ad sales

NBCUniversal’s cable networks once again saved the day at 30 Rock, as the stable of popular channels took in $803 million in third-quarter ad sales revenue, up 10 percent versus the year-ago period.

The cable programming group, which includes top-rated USA Network as well as Syfy, Bravo, Oxygen, and MSNBC, posted overall revenues of $2.1 billion on the quarter, an increase of 12 percent year over year.

Per Nielsen, USA finished the quarter ranked No. 1 among basic cable nets in prime time, averaging 3.51 million viewers and 1.35 million adults 18-49. Syfy was up 8 percent in the demo, with an average nightly draw of 613,000 adults 18-49, while Bravo and Oxygen dropped precipitously (down 17 percent and 15 percent, respectively). 

Cable outpaced the broadcast flagship, as NBC revenue grew 2.9 percent to $1.51 billion. Ad sales were flat, reflecting the network’s ongoing ratings shortfall.

NBCU reported an operating cash flow loss of $7 million, largely as a result of acquisition-related accounting revisions and the network’s beefed-up investment in prime-time programming. Unfortunately, NBC’s fall slate has failed to drum up much in the way of excitement; last month the network canceled the period drama The Playboy Club after the third episode dropped to a 1.2 rating in the 18-49 demo.

Also canceled: the poorly received sitcom Free Agents, which drew just 3.25 million viewers and a 1.0 rating in its fourth and final broadcast.

While NBC put in full-season orders for the comedies Whitney and Up All Night, both series are finishing last in their respective time slots. After premiering to 6.85 million viewers and a 3.3 rating, Whitney was down to a draw of 4.25 million and a 2.0 in its most recent first-run broadcast. In its last four times at the plate, Up All Night averaged a 2.2 rating in the target demo.

Also not long for this world is Prime Suspect, which drew 4.03 million viewers and a 1.1 rating on Oct. 27.

Through the first six weeks of the 2011-12 TV season, NBC is dead last among the Big Four English-language networks, averaging 7.24 million viewers and a 2.5 rating, down 5 percent from this time a year ago. 

NBCU CEO Steve Burke has said that it could take a few years to bail out the foundering broadcaster. “We certainly don’t expect to see anything in the next year,” Burke told investors in February. “I don’t think we’re going to see [marked improvement] for a while.”

But Bob Greenblatt, the peacock’s entertainment president, has a pair of aces up his sleeve in a returning competition series and a new scripted musical. NBC in February will bring The Voice back for its second season, pairing the show with Greenblatt’s pet project, the Katherine McPhee vehicle, Smash.

In the final five weeks of the 2010-11 broadcast season, The Voice averaged 11.1 million viewers and a 4.9 rating among adults 18-49. In this past upfront, The Voice commanded a cool $200,000 per 30-second spot, making it NBC’s most expensive series not affiliated with the NFL. (A spot in Sunday Night Football runs north of $500,000.)

Of concern for both sides of NBCU’s TV business is the scatter market, which has cooled significantly in the past several weeks. While pricing is still trending above upfront levels, volume is down across the board—as much as 15 percent, according to national TV buyers.

Network executives will have a better picture of how the first quarter of 2012 will shake out this month when buyers and sellers begin negotiating calendar-year upfront buys. Cancellation options are due in January when clients can choose to pull out of as much as 50 percent of their existing upfront commitments.  

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