The CEO of NBCUniversal said the company enjoyed robust demand in the TV industry’s upfront market, but offered no tangible details on volume or pricing to help bolster his case.
“It was the strongest upfront I think probably in the history of NBCUniversal,” said Jeff Shell, NBCU’s CEO, speaking during an investor conference with Credit Suisse Monday. “We saw results in this upfront far beyond what we thought we’d see. Demand was extremely strong.” He attributed that dynamic to an increase in demand from advertisers eager to ramp up sales as the nation emerges from the coronavirus pandemic as the TV networks’ supply of ratings continues to diminish with viewers migrating to streaming services. “There just aren’t as many ratings points to buy,” he said.
NBCUniversal also had a whopping amount of inventory to sell, including availabilities in both the coming Tokyo Olympics and the 2022 Winter Olympics, along with a Super Bowl in 2022 — adding some impetus to its sales process.
NBCU is the latest TV company to acknowledge it has essentially wrapped its upfront, the annual ad-sales session when U.S. TV companies try to the sell the bulk of their commercial inventory ahead of the next cycle of programming. Buyers expect the networks to garner an uptick in overall volume of between 2% and 6%, though it’s not clear if that estimate includes a growing raft of commitments for streaming venues like NBCU’s Peacock.
Variety estimates NBCU secured between $2.68 billion and $2.84 billion for its 2020-2021 linear primetime schedule, compared with $3.15 billion in 2019, the result of Madison Avenue pulling back during the pandemic. Using the buyers’ estimates as a guide, it’s possible NBCU could have generated between $2.73 billion and $3.01 billion in advance primetime commitments.
TV networks have used their leverage in the marketplace to seek significant increases in the rate they charge to reach 1,000 viewers, a measure known as a CPM that is central to these annual discussions between U.S. media companies and Madison Avenue. According to buyers, broadcast networks have pressed for CPM increases ranging from 16% to somewhere in the low 20% range. Last year, with significantly less momentum in the market, the networks sought increases of between just 3% and 4%.
NBCU’s Shell described a period of rebound for the company, noting that its theme parks in Orlando and California were opening up, in some cases with better than expected demand. Construction on a new park in Beijing was essentially complete, he said, though he indicated that the effects of the coronavirus pandemic were creating a “bumpy” atmosphere for its facilities in that country.
Shell appeared ambivalent about the need for NBCUniversal to bulk up through mergers and acquisitions over the next several years. Comcast could determine in the future that it sees as attractive property that helps the company grow, he said, but NBCU executives saw no pressing need to snatch up something at present. “There are always buy or build decisions you encounter,” Shell said, “but ‘I don’t think for our company we need to do anything, need any assets.”
More to come…