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NBCUniversal CEO Says DVRs ‘More Impactful’ on Ratings Than Netflix

LAS VEGAS – NBCUniversal CEO Stephen B. Burke talked up the continued viability of broadcast and cable television in a keynote Jan. 7 at the Consumer Electronics Show, while conceding that prior to the company’s purchase by Comcast Corp. five years ago he never would have predicted the impact of time-shifting and over-the-top (OTT) services like Netflix and Hulu on the cable business.

“I thought cable entertainment ratings were going to be stronger than they are,” he said during a CES “C Space” keynotes, presented by MediaLink. “Cable entertainment ratings are weaker than they were just two or three years ago, and that’s because all the alternatives are getting better and better.

“If you carry a show on cable that’s a rerun, it’s hard to maintain the same ratings when you have [so many other] great choices.”

Asked by moderator Michael E. Kassan, chairman and CEO of MediaLink, about his perception of OTT leader Netflix and whether he considers the subscription streaming service a friend, an enemy or a “frenemy,” Burke said, “I think, all of the above. Netflix has created a wonderful business and a great delivery mechanism. And while they are obviously affecting ratings at some level, I think time-shifting and DVRs are more impactful.”

Burke said he’s a little surprised by how some advertisers are discounting television in favor of digital. “There’s this perception among some advertisers that advertising on digital is this wonderful, shiny new thing that’s better,” he said. “The reality is that if you want to reach millions and millions of people, if you’re launching a new product or repositioning a brand, television is a fantastic way to do it. With digital, not only can you not get the reach you get with television, but also people don’t pay attention to the ads the way they do on television, and you don’t get the emotional attachment that you get from great television campaigns.

“We have some films that are very niche, and you have a high percentage of digital [in the marketing mix]. But if you want a film to be a blockbuster, then you’d better be out there on the Super Bowl.”

Asked about the single biggest challenge facing NBCUniversal, Burke said it’s the same as the biggest challenge facing all businesses, “inside or outside of media: the impact of the Internet. We were sitting in a meeting, and someone said digital is really affecting television and movies, and someone else said, ‘Name a company that’s not being upended, or dramatically changed, by the Internet. If you’re running Walmart or GM, every company is affected by the tremendous changes that are going on. We have to be as smart as we can be, unafraid to hire different people and meeting with different companies and investing in different places.

“We’re going to make good bets and bad bets, but it’s like the original broadcast companies that did not invest in cable. Existing businesses are not going to go away – people are going to watch broadcast television and cable for many years to come – but we need to get better at distributing our product on the Internet and creating content for the Internet.”

As an example, Burke said that for the upcoming Olympics in Rio de Janeiro, NBCUniversal will once again produce about 50 biopics on athletes “as a way to have viewers understand who’s important to the Olympics and get an emotional attachment [to the athletes.”

But this time, “as a result of our investment with BuzzFeed, this year BuzzFeed is going to send 12 people, probably young people who have never done documentaries like this before, down to Rio, and those people are going to interview athletes with whom we’re not doing up close and personals.” These profiles will air exclusively on BuzzFeed, “and you can be sure they’re going to be done from a different perspective and hopefully get younger people, millennials, who love BuzzFeed, to think about the Olympics in ways they might not be doing now. That’s the reason we invested in BuzzFeed – to learn from them. And that’s just one example – hopefully there will be hundreds, in the future, of how we’re trying to change the company.”

Burke said this willingness to innovate, to try something new, is what attracted him to Comcast when he first joined the company 17 years ago after stints at ABC Broadcast and Euro Disney. “When you’re running a company and living in a time of great change, you have a bunch of different choices, but the most important thing you can do is keeping leaning in and trying to build a company,” he said. “When I joined Comcast we were a regional company, centered around Philadelpia, and the thing that got me to join, and the thing that excited me, what that the company has always been entrepreneurial. You get in trouble, in a world that’s changing, when you’re preserving the status quo.”

Asked how he intends to navigate his company in an environment where OTT is the talk of the town, Burke said, “For as long as I have been in the media business, there has always been something that was going to put something else out of business,” he said. “Satellite was going to put cable out of business – that was 25 years ago, and Comcast has never had a down quarter.

“My perception is there is more competition now than ever, which makes it harder to have a show that’s a hit –- but people are watching more television now than ever, and the vast majority of that television that is being watched is still broadcast and cable.”

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