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NBC Expects 2018 Winter Olympics to Outperform Sochi Games in Ad Revenue

NBC expects ad sales for next year’s Winter Olympic in PyeongChang, South Korea, to exceed those for the 2014 winter games in Sochi, Russia.

“We’re pacing a little bit ahead of where we were going into Sochi,” NBCUniversal sports ad-sales chief Dan Lovinger said Wednesday on a conference call with reporters.

Lovinger and NBC Olympics declined to identify how much ad inventory has been sold thus far. The Sochi games earned $1.1 billion in revenue for NBC.

Speaking to reporters following an upfront presentation for the PyeongChang games at Rockefeller Center, NBC executives announced a shift in how they will sell advertising for the Olympics. The company will abandon its past practice of selling based on household ratings, and instead move to a total-audience measurement that will count all viewers ages two and up across linear and digital platforms.

“Total-audience viewing allows us to combine digital and linear viewing and deliver a single audience guarantee,” Lovinger said. “So if we see a spike in one set of numbers from, for instance, digital, it might offset the linear viewing that might be down slightly, or vice versa.”

The ad-sales change follows a 2016 Summer Olympics in Rio de Janeiro that saw steeper-than-expected declines in linear viewing and greater-than-expected increases in digital, where NBC once again made all events available to watch live for authenticated viewers. The Rio games averaged 27.5 million viewers across linear and digital platforms, down 9% from the 2012 summer games in London.

Speaking to Variety on Wednesday prior to the call, NBC Sports and Broadcasting chairman Mark Lazarus indicated that he anticipates viewing to continue to shift from linear toward digital.

“We think that our [linear] ratings will be off somewhat from what Sochi had been,” Lazarus said, declining to identify a viewership target. “Just media attrition will show us that.”

With viewing habits shifting, NBC announced Tuesday that it will also change how it presents its linear telecast. The network will broadcast all coverage of the games simultaneously across all four U.S. time zones for the first time next year, eliminating traditional tape delays for the Pacific and Mountain time zones.

That move will make more events available live for more U.S. television viewers — including more premiere events. Despite PyeongChang being 13 hours ahead of the Eastern time zone, events such as bobsled, Alpine skiing, and figure skating will air in primetime on the East Coast.

“This will be the most live winter games ever,” Lazarus said.

That is due in part to the extreme time-zone difference, which puts outdoor events such as skiing that must take place during daylight hours in U.S. primetime. But it is also due to an unusual shift of figure skating — one of the most popular Olympics sports for U.S. television viewers — from evening to daytime.

Scheduling for events is handled by individual sports federations. But NBC, whose broadcast contract accounts for roughly one fifth of the revenue that the International Olympic Committee generates from the games, expressed its scheduling preference.

“We certainly said we think it would be nice to have the premiere skating on in primetime in the United States, and other countries weigh in as well,” Lazarus said. He added that local organizers believed that scheduling the events for daytime in South Korea “would be helpful to them to sell tickets.”

NBC also announced on Wednesday that it would again partner with Buzzfeed to produce original content for Snapchat throughout the games. The network expects to generate “close to eight figures, if not eight figures” of social-media revenue in PyeongChang, Lovinger said on the conference call, “significantly more than was booked in Rio.”

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