NBCUniversal preens its shows, tells advertisers ‘trust us’
Comcast and NBCUniversal fight the digital tide for ad dollars.
NEW YORK — NBCUniversal's pitch to advertisers, agents, producers, and critics at its once-a-year preening, known as the upfront, was simple: Trust television, and be skeptical of YouTube, Facebook, and online platforms.
"TV is the most effective advertising medium ever. You know it. We know it and our friends in Silicon Valley know it," Linda Yaccarino, the chairman of advertising sales and client partnerships for NBCUniversal, said in opening the two-hour event at Radio City Music Hall, in which the Comcast-owned entertainment conglomerate trotted out celebrities, such as Jennifer Lopez and Seth Myers, and previewed new shows.
"TV reaches real people," Yaccarino added, scoffing at online audience-measurement tools such as views and likes. "That should be game over."
General Motors, Walmart, and PepsiCo pulled advertisements from YouTube after reports surfaced in Europe that paid ads were appearing near racist, homophobic, or anti-Semitic videos. Facebook admitted last year that it had overestimated the clicks on advertisements on its platform, leading to disgruntled marketers.
Still, digital platforms are challenging to NBCUniversal and fellow TV networks CBS, ABC, and Fox in the battle for eyeballs. The research firm eMarketer estimated that digital ad spending surpassed television for the first time in 2016. NBCUniversal has fought the online tide by dishing out tens of billions of dollars for TV sports rights to televise live events — next February it will televise both the Winter Olympics in South Korea and the Super Bowl — and revamping some of its cable networks.
Yaccarino noted to the crowd of about 6,000 that NBCUniversal and Comcast have put about $1.5 billion into digital properties, among them BuzzFeed and Snap Inc., to reach the digital and mobile audiences. "We are the only company that can reach every smartphone in the country," she added.
A bright spot for the Comcast-owned entertainment conglomerate has been the NBC broadcast network, which had been given up for dead before Comcast bought NBCUniversal from General Electric in 2011.
Early in the Comcast ownership days, NBCUniversal desperately looked for a hit, piloting 17 to 22 shows a year to find one that would boost its standings. It currently has a big hit with This Is Us, which will enter its second season this fall.
Because of the strong ratings, NBC piloted only 12 shows for the upcoming TV season and will air only three new ones this fall: a Will & Grace revival, a show about a military special ops unit, and a true crime series produced by Dick Wolf, creator of NBC's Law & Order franchise.
Even as the TV network audience has declined and ad-revenue growth slowed, NBC and other free over-the-air broadcast networks have boosted their financial performance in recent years with so-called retransmission fees, which are charged to TV distributors to carry NBC, CBS, ABC, and Fox.
Only a few years ago, Comcast, DirecTV, and other pay-TV operators carried those over-the-air networks without fees. Today, they fork over billions of dollars in new fees to carry those networks — a boon to NBC and others.
Analysts say it is highly profitable, but those fees also inflate bills, even as many people consider dropping pay-TV or not signing on to it at all because of costs.
In 2016, NBC broadcast-TV revenue rose 10 percent to $9 billion, without taking into consideration the Rio Olympics, and profits soared 69 percent to $1.3 billion — partly as a result of these new fees.