NBCU Finishes Upfront Ad Sales With Double Digit Pricing Gains, Execs Say

Associated Press

NBC has completed its upfront ad sales for prime time with a 12.5% increase in the price to reach each 1,000 viewers, Comcast CEO Brian Roberts told analysts this morning in a call to discuss the company’s Q2 earnings.

“Demand is strong across our entire portfolio,” he says.

NBCU chief Steve Burke added that by taking advantage of this year’s “strong advertising market” the company has made “real progress” in closing what it has long said was a 20% gap in its pricing vs its rivals.

Ad rates were up 13% at USA, 12% for E! and 10% for Bravo and “may be a few percentage points ahead of similarly situated networks” elsewhere, Burke added. His company has “led the discussions and negotiations and price setting.”

The numbers are slightly ahead of what analysts expected.

Burke also says that NBCU sold from 5% to 10% more of its ad inventory than it did last year. “There was plenty of volume, and we could have sold more if we wanted to.” The company has between 20% and 25% of its inventory left “for a strong scatter market.”

The Comcast subsidiary doesn’t fear the growth of slimmed down packages of TV channels, including new ones from streaming services: Investors fear that some programmers will lose a game of musical chairs as distributors offer cost-conscious consumers fewer channels than in the traditional cable offering, at a lower price. Hulu — co-owned by Disney, Fox, and Comcast — is among the companies planning a lower cost service.

NBCU is “making sure we’re in every bundle,” Burke says. Its channels which include Syfy, Bravo, and MSNBC are “pretty much essential to those bundles,” Burke says.

Still, the company may continue to ditch some of its smaller channels, as it has with G4 and Style.

“We make most of our money in the big channels,” Burke says. “There are just too many channels….There’s more to do. I don’t think it will have a material impact on our profitability. It might be positive.”

The NBCU chief adds that he doesn’t worry about growing competition from Netflix, which Comcast plans to include on its set top box as a premium service similar to HBO.

“It’s a smart strategy for Comcast,” Burke says. With about 40% of all viewers now subscribing to the streaming service, “whatever Netflix is doing to viewing habits, a lot of that is already done.” What’s more, Netflix is a “huge” buyer of NBCU content.

Comcast could pose a formidable challenge to Netflix if the cable company offered its own nationwide streaming service — putting it in competition with other cable providers.

But that isn’t in the cards, at least not yet.

“Our in-footprint strategy is where we add the most value,” Roberts says. The economics of a cable-like streaming service “are unproven to us” which makes it “unclear that that’s the right strategy for us…We’re innovating all the time and we’re happy with the strategy that we have.”

This article was printed from https://deadline.com/2016/07/comcast-nbcuniversal-finish-upfront-ad-sales-double-digit-price-increases-1201793383/