2012 Olympics: Lazarus Says NBCU Surprised by Ratings Performance

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NBC Sports Group chairman Mark Lazarus said NBCUniversal officials have been surprised by the ratings delivery of the Summer Games and emphasized that the programmer is now moving toward a break-even performance with its London ledger.

Lazarus, speaking with reporters on conference call from London on Thursday morning, said the start to the XXX Olympiad will "lead to great momentum. We are also realistic to know that we're hitting some historic highs across every platform. Lazarus added "we know every day won't be an all-time high," pointing out that Michael Phelps won his record eighth gold medal in Beijing on the second Saturday night of those Games. There won't be the equivalent of that athletic glory from London on Aug. 4.

The improved performance across all dayparts and all of the NBCU linear networks -- NBC, NBC Sports Network, CNBC, MSNBC and Bravo -- as well as varied digital platforms over results from the Beijing Games in 2008, plus increased ad sales has put the programmer in a much better fiscal position than had been forecast.

Lazarus, referencing remarks made by NBCU CEO Steve Burke and Comcast vice chairman Michael Angelakis on a second-quarter earnings calls with analysts yesterday, said original internal projections around the time of the Comcast/NBCU merger in January of 2011 called for about $200 million in red ink for the 2012 Games.

"But with ratings and sales increases, we have made significant incremental money that will now be around breakeven - no qualifiers," he said.

Lazarus said there had been an uptick among the buying community in the last few months leading up to the Games: "We sold a lot more going in than we had planned. And we have ongoing sales and interest from people who have sort of caught the fever of what's going on out there and have contacted us about buying more inventory...But it was really about what's going on for the last few months as we continued to add revenue to the books. And part of it is we can sell things that we had thought we might need to close gaps on make goods as well.

So that's really bringing up that inventory for us to sell at this time."

NBCU went back into the advertising marketplace on Monday, after analyzing ratings results from the first two of days of competition, Lazarus said.

"You know we were very excited by the opening ceremonies numbers. But we also know that a pageant like that is different than days of competition. Once we got a few days of competition under our belt we had a degree of confidence that we could sustain at least some level of the ratings we are at.," he explained on the conference call.

Alan Wurtzel, president of research for NBCU, talked up the particulars of some of NBCU's ratings gains including increases among teens and kids, trends influenced no doubt by digital viewing that bode well for the programmer's upcoming quartet of Olympics from 2014-2020. "We're cultivating the next Olympic generation," he said.

Wurtzel said some of the findings from the "billion dollar media lab" were perhaps "counterintuitive," but that they underlined the success of NBCU's strategy of streaming all competitions live with the idea of pushing users toward NBC's primetime. To that end, a survey conducted by third-party researcher USAM last Sunday of 1,000 viewers found that 43% of respondents knew that day's results. Of that total, 67% indicated they were more likely to watch the primetime telecasts, compared with 54% who were unaware of how the competitions played out.

He also noted that the expansive live streaming -- there will be more than 3,500 digital hours by Games' end -- is leading to a number of firsts. Wurtzel said a survey revealed that 75% of tablet owners indicated that they streamed video for the initial time with the London Games; that ratio was at 86% among those with smart-phones. There was even a significant push among those using that much older digital platform, the Web, where 36% of respondents engaged with their initial streaming experience online during these Games. He said it would be interesting to see what impact the Games may have on consumer media consumption habits going forward.

Before the start of the action in London, Wurtzel projected that the 2012 Games would wind up with a reach north of 200 million viewers and a top five finish among the most-watched TV events in U.S. history. When asked whether London, which through the first five days was slightly ahead of Beijing, could eclipse the 2008 Games as the most-watched TV event in U.S. history, Wurtzel stopped short of a firm prediction.

"I mean I'm very confident top five, and you know stay tuned. I think it has a very good shot at being up there, way up there, but we'll see. Two hundred and fifteen million is a very high bar," he said. "But so far it looks like we're moving in a great direction."

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