NBCU Eyes Profits, Early Start with 2014 Olympics

Lazarus: Ad Sales Pacing Well; New Competitions to Begin Day Before Opening Ceremony at Sochi Games

NBC will start its coverage of the 2014 Winter Olympics in primetime the day before the Opening Ceremony for the Sochi Games.

With the International Olympic Committee adding 12 events to the 2014 slate, NBC will become the first U.S. media company on Feb. 6, 2014 to present primetime Games' coverage before the flame is officially ignited the following day.  

New Olympic events, team figure skating and men’s and women’s slopestyle snowboarding, along with women’s freestyle moguls, will begin the day before the Opening Ceremony, and be showcased during NBC’s primetime coverage that night. In past Winter Olympics, ski jumping preliminaries have sometimes preceded the Opening Ceremony, while soccer has kicked off early in the Summer Games.

NBCU officials, who gathered at a press event at 30 Rock in Manhattan to commemorate the one-year countdown to the Sochi Games, believe the events will serve as a strong lead-in for the festivities the following night.

“Thursday is a big night for television,” said NBCU Olympics executive producer Jim Bell. “[This] will give us a unique opportunity to kick things off and set up the Opening Ceremony the following night in a big way.”

NBCU Sports Group chairman Mark Lazarus noted that the extra night will appeal to advertisers, distributors and viewers, but won’t be included in NBC’s primetime average rating, "until we have more of a history.”

Asked if NBCU would finish in the black with the Sochi Games, Lazarus, pointing to advertising and distribution revenue, is confident the event will be profitable.

"Ad sales are pacing extremely well. This will be a very good moment for the company," he said of the first Olympics for which NBCU purchased the rights after it was acquired by Comcast.  NBCU spent $775 million for the Sochi rights as part of $4.38 billion outlay for four Games through 2020. Under General Electric’s watch, NBCU paid $820 million in rights to the 2010 Vancouver Olympics, which lost $223 million amidst a shaky economy.

NBCU will begin its multimedia marketing push for Sochi, a resort town on the Black Sea that is nine hours ahead of the eastern time zone, with a roadblock tomorrow night at 8 p.m., or within that hour.

The programmer will disseminate a 60-second promotional message across its array of assets including NBC (English) and Spanish-language broadcaster, Telemundo; 17 cable channels, Golf Channel and NBC Sports Network, among them; 10 NBCU-owned stations and 235 NBC affiliates, including their digital assets; the NBC Sports Radio network; the NBC Sports Regional Networks; and more than 40 NBCU websites, notably NBCSports.com and NBCOlympics.com. The spot will also run on 33 non-NBC channels via Comcast's ad sales unit

In addition, numerous NBCU programs across television, radio and the web will preview the Sochi Olympics with editorial content. NBC’s Today, NBC Sports Network’s NHL Live and The Crossover, and numerous NBC Sports Radio shows will be among the NBCU outlets carrying one-year-out coverage. Most NBC Sports Regional Networks, NBCU-owned stations and NBC affiliates will also note the one-year-out occasion as it pertains to their markets.

John Miller, CMO of NBC Sports Group, said that as part of the year-long marketing effort, NBC will run 2,500 GRPs worth of Sochi promos in primetime, enough to reach each person in the U.S. 25 times. He said momentum from record-setting London Games is strong as the intent to view among a survey group is “hanging in the mid-70s,” a ratio that is vastly higher than any other NBC show, including top-rated Sunday Night Football.

Part of that encouraging ratio is tied to the Games' appeal among the 18-to-34-year-olds, a group that was highly engaged in the London Olympics, which were delivered across mobile, tablet and computers. Those were reasons that Gary Zenkel, president, NBC Olympics, and operations, strategy, NBC Sports Group,  said the younger audience surged "higher than any other demographic" during the London event. 

Zenkel said NBCU will push Sochi content through myriad platforms and social media, which should result in significant upticks in those measures from the Vancouver Games. He pointed out that in 2010, Twitter had not fully arrived and that tablets were in their infancy with only 4% of homes owning the devices, compared with 40% today. Similarly, only 20% of the population owned smartphones then, versus projected penetration levels in the 50% to 60% range.

Although plans were not specified, NBC will deploy a similar strategy from London, meaning, in a first for a Winter Games, every event from Sochi will be carried live on some platform (most via live-streaming). In primetime, NBC will again use tape-delayed coverage of the day's top events, enhanced by the Peacock’s story-telling and packaging, to maximize its audience.

Despite taking various degrees of heat for continuing NBCUs long-standing primetime presentation play in London, Lazarus defending the decision and the business model, stating that the presenting events earlier on digital platforms boosted viewership. "Thirty million people a night voted to watch us when they already knew what was going on," he said. "I think that [live-streaming events] satisfied a lot of the immediacy needs."