NBC now expects to 'break even' on London Olympics thanks to robust ratings
NEW YORK (AP) — Television viewers are so excited about the Olympics that NBC's corporate owners said Wednesday they now expect to break even on the London games after once predicting they'd take a $200 million loss.
Through five days of events, ratings are some 30 percent higher than what NBC had privately predicted, said NBCUniversal CEO Steve Burke. That means NBC can sell more commercial time than anticipated and charge higher prices for it.
Despite social media complaints about NBC's policy of filling its prime-time with events taped earlier in the day, it hasn't dissuaded television viewers. There are even indications that it may have helped: 38.7 million people tuned in Tuesday night, when Americans could have easily learned by dinnertime that the country's women's gymnastics team won a gold medal that day and swimmer Michael Phelps set a record for career medals earned. On Monday, when the men's gymnastics team finished without medals, 31.6 million people watched.
"We are way ahead of where we thought we'd be," Burke said.
Burke attributed the strong showing to NBC and parent company Comcast Corp.'s heavy promotion of the games ahead of time. Experts suggested social media played a big role in drumming up interest in the Olympics, just as it has in the past couple of years for big TV events like the Super Bowl, Grammy Awards and the Oscars. Fans converse through Facebook and Twitter, and it drives people to the television set, said Brad Adgate, an analyst for Horizon Media.
"The popularity of social media has to be one of the drivers," Adgate said. "Everything else is pretty much the same."
NBC had drawn on past Olympics ratings performance — in the era before social media — in predicting that ratings for London would be on a par with the 2004 Athens games and 20 percent lower than the Beijng summer games in 2008. Many Beijing events were carried live in U.S. prime-time, but because of the time factor, NBC knew it could not have as much fresh material from London.
Instead, prime-time ratings for London are up 10 percent from the Beijing games, the Nielsen company said.
"The guys in the office who make the most noise complaining about NBC's tape delay watch it for four hours each night," said Anthony Crupi, staff writer at Adweek.
For people who want to stay in the dark about Olympics results before watching NBC in the evening, it's becoming harder in a wired world. Mandy Hauck, a marketing communications manager for a software company in Atlanta, said she's avoiding Facebook and deleted her iPhone apps for CNN and ESPN. She stays away from Twitter's main page.
"I enjoy the experience of sitting with my family and friends in front of the television and cheering for the athletes as if they were competing live," said Hauck, a former college fencer who has been following two-time American gold medalist Mariel Zagunis in London. "It's much more entertaining and enjoyable that way!"
NBC had paid $1.2 billion for the rights to show the games on TV and online in the U.S. The company's prediction that it would lose some $200 million was based on the expense of doing business in London and its experience with the Vancouver winter games two years ago, the first Olympics that NBC has telecast that lost money. Besides likely increases in sales for its own ad inventory, NBCUniversal will likely earn more money through ad sales at its affiliates and in the digital space, Crupi said.
Before the games opened, NBC said it sold more than $1 billion in advertising, the most ever for one event. Burke said the pre-sales of advertising earned the company some $100 million more than anticipated.
Time Warner Inc., which owns TNT, TBS, CNN and other cable channels, said Wednesday that it has seen a slowdown in last-minute ad sales partly because advertisers are shifting money to the Olympics instead.
NBCUniversal sold the majority of its ads before the Olympics, and the good ratings mean those customers got bargains. Media companies typically reserve a portion of ads for customers who want to purchase spots after events such as the Olympics have started. NBC's ratings mean those ads will now be in demand and more lucrative for NBCUniversal.
Investors are tuning in too. Comcast said on Wednesday that its net income rose 32 percent to $1.35 billion during the April-to-June period. The company saw its shares rise 3 percent, or $1 to close the trading day at $33.55. The day's high of $33.95 was the highest the stock has traded since the Internet and telecom boom of the late 1990s.
NBC is hoping the increased attention paid to the Olympics will also boost the "Today" show, locked in a heated battle with ABC's "Good Morning America," and the "NBC Nightly News." Both shows are broadcasting from London. The network is also heavily promoting its prime-time entertainment fare, hoping to break out of a long slump.
The Olympics run through Aug. 12. Ratings tend to go down after gymnastics and swimming competitions end.
NBC is showing the Olympics on its main broadcast network, the Spanish-language Telemundo and the cable channels CNBC, MSNBC Bravo and NBC Sports Network. It also created specialty channels devoted to basketball and soccer and one for 3-D. The main network is broadcasting more than 270 hours of the Olympics, the most ever.
The London performance also has to make NBCUniversal executives feel good about its future Olympic telecasts. Last year, NBC outbid Fox and ESPN to gain the rights to broadcast four more Olympics, paying $4.38 billion through 2020. Fewer and fewer television events are able to draw such a big audience to their sets each night.
"These types of audiences are so unique that I think over time they're going to prove to be more and more valuable," Burke said. He made his comments on a conference call with Wall Street analysts to discuss the second-quarter earnings report of Comcast.
AP Technology Writer Peter Svensson and AP Writer Leanne Italie in New York contributed to this report.