Comcast’s NBC broadcasting unit saw retransmission consent revenue climb 63.5% in the second quarter, but that haul could get even larger as new deals come up on the horizon, NBC Universal CEO Steve Burke told analysts Wednesday.
According to Comcast, NBC increased its retransmission consent revenue – a combination of both retrans and reverse compensation from affiliates – in the second quarter by 63.5%. Burke, on a conference call to discuss parent Comcast’s Q2 results, said despite some significant growth over the past five years, NBC still lags the other major broadcasters on retrans fees. But that may not last long.
“We still have some major contracts where retrans is going to take significant step-ups and we’re still hundreds of millions of dollars less than some of the other comparable peers,” Burke said. “We think we deserve the same amount for retransmission consent – we have the Olympics, we have the NFL, we have the No. 1 network in the demo. I think over time that will be a number that continues to grow nicely.”
Burke also talked about NBC’s monetization gap on ad sales. Over the past five years Burke said Comcast has seen the lower CPMs paid NBC channels in the past as an opportunity for growth.
“At the time we did the deal the monetization gap was about 20% on ad sales,” Burke said. “We’ve closed the majority of that gap and the biggest progress we’ve made in any single upfront was the progress we just made.”
Burke said while NBC Entertainment as a whole experienced a 12.5% increase in pricing at the most recent Upfront, that growth was spread evenly across all its broadcast and cable networks, with other channels seeing double-digit increases like USA Network (13%), E! (12%) and Bravo (10%).
That should increase as NBC begins carrying the 2016 Summer Olympics in Rio next month (Aug. 5-21). NBC has pulled out all the stops with its Olympics coverage, offering nearly 6,800 hours of programming on 11 networks as well as digital streaming coverage of events.
Burke said that NBC will have three times the combined ratings of ABC, CBS and Fox on any given night of the Olympics.
“That kind of appeal, if you’re marketing an automobile or a beer, is just a tremendous value proposition,” he said.