Comcast to invest additional $300 million for NBCUniversal programming
Now that it has become a Hollywood powerhouse, Comcast Corp. will spend an extra $300 million this year for television programming to revive its newly acquired NBC broadcast network and keep the company’s cable channels humming.
NBCUniversal Chief Executive Steve Burke on Wednesday renewed Comcast’s long-standing pledge to invest millions of dollars more for television programming than the media company’s former majority owner, General Electric Co., had been spending. In late January, Comcast acquired a 51% stake in NBCUniversal and GE became a minority partner.
During a conference call with analysts to discuss Comcast’s first-quarter earnings, Burke said the company would spend an extra $200 million this year on prime-time shows to try to give the fourth-place NBC network a lift in the ratings. The Philadelphia-based cable giant also plans to pump an additional $100 million into programming for the company’s profitable cable networks — including USA, Syfy, E! and Bravo — to keep the channels at the top of their game.
Much of the $200 million earmarked for NBC is to restock the 10 p.m. time slot with scripted shows after NBC’s debacle of placing Jay Leno in prime time for four months in 2009 and early 2010. More than a year later, the peacock network continues to struggle to regain its footing with dramas and comedies at 10 p.m. Comcast has warned that it could take years to restore NBC to glory.
“The real key to turning around NBC is not necessarily increasing the investment. The real key is making better shows,” Burke said.
This spring, NBC ordered 21 pilots — about the same as a year ago, when the network began trying to dig out from the Leno disaster. Burke and other company leaders were scheduled to arrive in Los Angeles late Wednesday to begin screening NBC Entertainment Chairman Bob Greenblatt’s first slate of prime-time programming. NBC plans to unveil its fall schedule in New York on May 16.
NBC received a timely boost during the last week with the singing contest show “The Voice,” which was greenlighted by the previous regime. With an average audience of 12.4 million viewers, “The Voice” was television’s highest-rated show Tuesday, generating NBC’s best ratings for a non-sports program in more than five years.
The strong debut of “The Voice” was described by Comcast Chief Executive Brian Roberts as “maybe the most exciting event for NBC Universal this year.” The show benefited from Comcast’s companywide campaign to promote big projects.
“We have a saying that ‘we’re better together,’ and what we’re really trying to do is make sure that when we have significant priorities like ‘The Voice,’ or a movie like ‘Hop,’ that the entire company gets behind it,” Burke told analysts. “We think that’s going to be a big key to our success in the future.”
For the quarter ended March 31, Comcast said NBCUniversal took in $4.35 billion in revenue, down 11.5% from the year-earlier period when the media company’s top line was inflated with $782 million in revenue from its broadcast of the Winter Olympics in Vancouver, Canada. However, that big haul did not come close to covering the license fee the network paid. NBCUniversal lost $223 million on the Vancouver games.
Analysts wanted to know whether a Comcast-run NBCUniversal would spend wildly to retain its sports franchises. NBC also lost about $125 million last year on its NFL “Sunday Night Football” contract. The losses were lower than initial estimates because football ratings were high, allowing NBC to hike the rate for its commercial time.
But Burke refused to reveal that page of his playbook. “We’re in business to make money, and our approach is going to be disciplined,” he said. “As it relates to the Olympics or the NFL, we think those are two fantastic properties and would love to have them, but we would like to make money.”
Another problem spot has been the performance of movie studio Universal Pictures, which saw an 8% decline in revenue in the quarter. That was largely due to increased spending on marketing to promote new films, lower DVD sales and a couple of box-office disappointments.
“We are well aware of the challenges in the film business, and the fact that the DVD business has declined,” Burke said. “But part of it is that we need to make better films — and that’s a real area of focus for us as well.”
