FOR IMMEDIATE RELEASE
Thursday, August 11th, 2016
TRANSCRIPT – MARK LAZARUS & ALAN WURTZEL ON THE RIO OLYMPICS
AUGUST 11, 2016
GREG HUGHES: Good afternoon, everybody. It’s a little after 4:00 here in Rio, and we’re well into Day 6 of our Olympics coverage on the networks and the digital platforms of NBC Universal.
We’re joined today by Mark Lazarus, the chairman of the NBC Sports Group, and Alan Wurtzel, President of Research & Media Development for NBC Universal.
We’ll take your questions in the order that you request them. We’re not going to get to everybody today, but if you want to follow up, contact the NBC Sports Group press department. We’ll have a transcript available of this call afterwards on nbcsportsgrouppressbox.com.
Let me turn things over to Mark Lazarus for opening remarks, followed by Alan Wurtzel, and then we’ll take your questions.
MARK LAZARUS: Thanks, Greg, and thank you for joining us. Here we are, Day 6 of the Olympic Games. Rio 2016 is a huge hit. We are aggregating audiences at a scale that nobody has ever seen before. To top that, this will be our most economically successful Games in history, and it’s by far the most viewer friendly TV event of all time.
In addition, we’re delivering for all of our affiliates, our MVPD partners, as well as all of our advertisers. We spent years preparing for this and our team has worked tirelessly to put us in this position. We’ve been part of a changing media landscape, and NBC and Comcast have been and are leaders in that.
In London 2012, we streamed every competition live for the first time. We followed that up in Sochi by doing the same. And these are two time zones that are not exactly friendly to live, primetime television. In Rio, we’re utilizing multiple networks and platforms to present more content than ever before — 6,755 hours — and to deliver the best possible experience.
Specifically, we’re giving consumers multiple options during daytime and primetime — our broadcast network, multiple cable networks and digital streaming. And we’ve never done any of this before in primetime.
By far the biggest and most important vehicle for the Olympics is the NBC broadcast network. Our coverage is dominating the media landscape and is the highest rated primetime series since the London games. We are averaging a 15.6 primetime rating. When you add NBCSN and Bravo for primetime, and NBC Sports Network, Bravo, CNBC, MSNBC, USA, and as of today Golf Channel, for daytime, the linear consumption for the 2016 Olympic Games is huge. We’ll have our five-day Total Audience Delivery report for you later in the day.
This does not even include our record amount of Spanish language coverage, which Telemundo and NBC Universal are showing to their audiences. Our digital offering of streaming all competition live, as well as our TV Everywhere network feeds, makes this the biggest streaming event to date, featuring up to 150 available feeds at times.
Yesterday, we surpassed 1 billion live streaming minutes, which is an Olympic first. That came one day after we exceeded the entire streaming consumption for all of the London Olympics. Our numbers will top the streaming for all Olympics combined in just a few days.
We programmed to the opportunity that came before us. We programmed where consumer behavior is growing. We programmed marketing plans and desire to intersect customers in different ways.
Overall, our ratings consumption is meeting our expectations, the mix is just a little different. Cable and digital are continuing to grow at a fast rate. That’s one of the reasons why our Olympic deal is so good. We have all the rights to every platform through the year 2032. We can alter our plans from Games to Games as technology and behaviors continue to change. Along the way we’re crossing the bridge of how to measure all of this. We’re doing it in real time during these Summer Games and we’ve introduced for the Rio Olympics our Total Audience Delivery to measure consumption across broadcast, cable and digital platforms.
NBC broadcast is not the only way people are consuming the Olympics, just as newspapers and magazines are not only consumed in print. While primetime broadcast TV viewing on NBC will remain the biggest way that people consume the Olympics, we also understand that to millenials and younger viewers, primetime is really, quote/unquote, ‘my time.’ They want to watch on their terms, and that’s why moving forward we’ll continue to adapt to viewer behavior with our coverage on multiple platforms.
That said, more people in the 18 to 34 demographic are watching the Olympics in primetime than watch primetime TV regularly. Seventeen percent of adults watching the Olympics in primetime are in that 18 to 34 demo, versus 10% of adults for primetime during last TV season. This young audience is a large reason that our digital numbers are way up.
Back to TV. Let me just go through one statistic for you. Some people may not talk about share anymore, which measures what people are watching when they physically have their TV sets on. Through last night, we are averaging a 29 share. Think about that. Nearly one-third of televisions in use have been tuned to NBC in primetime. In addition, nearly two-thirds of all television households, and more than half the U.S. population have already tuned into the games and been measured.
On NBC, these Olympics have a big halo effect for the rest of our businesses and our company. The Today Show and Nightly News, Access Hollywood, all of which are here in Rio, have shown large increases, especially among young audiences. In the 18 to 34 demo, The Today Show this week is beating the combined total of its competitors, and nightly viewership was up 98% from last week. Access Hollywood has nearly tripled its 18 to 49 viewership versus last month. The Tonight Show, which followed Opening Ceremony, had huge viewership in the 18 to 49 demographic and jumped 72%.
And just as important to us, our distribution partners are also seeing success. Our station affiliates and their late local newscasts are up over July in all 56 metered markets, with a 280% jump in the 18 to 49 demo.
So based on what we’re presenting today and throughout, we see a large number of people enjoying this content, wherever and however they’re watching it. When we get to PyeongChang in 2018 and Tokyo in 2020, we’ll again have this structure for advertisers and media partners that reflect this evolution and consumption. We are so confident in our delivery that we’ve booked 30 million more in advertising since the Games began, which is just another sign of our success.
ALAN WURTZEL: Thanks, Mark. Hi, everybody. It’s nice to be with you. I think you can appreciate from Mark’s comments that the headline of these Olympics is the success of our cross-platform strategy and how well the audience has responded to it.
So how do we know that? Well, as Mark indicated, it’s from a brand-new way to measure true Olympic consumption that we develop, and we want to share it with you. It’s the Total Audience Delivery, what we affectionately call TAD, which fully captures the modern ways viewers consume Olympic content. And every day we’ll provide you with a primetime TAD.
Now, what the TAD does is to measure how many viewers have seen Olympic content in prime across three buckets — broadcast television, cable, and our streaming platforms. But what makes this different is that we’ve converted all the digital usage measurement into a Nielsen-like metric. So by harmonizing the data, we have a measure that offers us an average minute measure of viewership.
And when we roll these buckets up, we get the most accurate picture of each day’s Olympic consumption, and our primary audience research reflects these changes in consumer behavior. For example, 65% of our viewers say they’re watching the Olympics much differently now than they did several years ago. And almost half are using more screens to follow the games than ever before.
Yeah, I think it’s fair to say that you can no longer accurately evaluate Olympic performance without measuring Total Audience Delivery.
So how has this cross-platform strategy been embraced by the viewers? Well, two-thirds say my Olympic experience has gotten better since I’ve been able to connect with the Games in so many ways. By the way, it’s 82% of millennial men saying that.
Now, Mark said we know the consumer is responding to our cross-platform approach by adopting new media behaviors to their consumption of the Olympics. According to a study of our research results, 83% of all viewers agree they’re more comfortable using technology to access Olympic coverage than I ever used to be. And by the way, 75% of 50-plus viewers agree to that as well.
Now, during every Olympics since Beijing, we’ve conducted special research to better understand cross-platform behavior. This year we’re working with TiVo and RealityMine to follow over 800 people during the 17 days of the Games to better understand how they use and consume Olympic content.
Now, it’s only a few days in, but we’ve already seen some really interesting findings. Among people who watched the first three days, 80% used TV and at least one other device to follow the games. And that’s up from 61% in Sochi, which is only two years ago. Not surprisingly, the smartphone is now the device most often used to follow the Olympics on digital platforms by 80%, and that was 70% in Sochi, and 54% of adults 18-plus have used social media simultaneously during the first three days of the Olympics.
Now, speaking of social media, we went into the games and we felt this would be the first truly social media Olympics. Our early data supports that. The first six days, NBC Olympics had 153.8 million social media engagements. An engagement is a metric that ListenFirst and other digital measurers use to measure social behavior. And the measurement consists of video views, likes, shares, comments, posts, and hashtags. NBC Olympics has gone 131.4 million total video views across Facebook, Twitter, Instagram and YouTube. And in the first six days, Olympic social activities was 10 times total engagements of this year’s March Madness, which, by the way, lasted 19 days, and it outpaced the 2014 World Cup by 65%. The World Cup generated 91 million engagements over 32 days, and as I just mentioned, Rio is 153.8 million in only six days. Twitter, #rio2016 was mentioned over 11 million times in the past six days, six times more than Twitter conversation around #sochi2014, and more than four times around #london2012.
Let me put it into a little perspective. Between August 5th and 10, the Olympics on NBC generated 35 times more engagements than Taylor Swift, 16 times more than Pokemon Go, and the Team USA athletes generated a total of 34 million engagements, 43% more than all three Kardashian sisters combined. And that’s star power. Of course we cannot forget —
And let’s not forget the newest Olympic craze, cupping. The treatment Michael Phelps made famous with those dark circles. Olympic exposure has already resulted in 100,000 Twitter mentions, Wikipedia reported a 5,000% increase in cupping searches on its site, and there have been 2.7 million video views on Facebook of Michael getting cupped.
The power of the Olympics also extends to advertising, and it remains the most powerful sales and marketing platform on the planet. According to Nielsen’s TV Brand Effect, something that used to be called IAG, for those of you familiar, through the first nights of Rio, first three nights, roughly 60 ads have aired, both in Olympic prime and the identical ads were aired elsewhere in prime. Among 18 to 49, these ads had a 39% better recall and generated 28% better overall brand resonance inside the Olympics than outside.
Interestingly, these common ads have been especially impactful among the elusive millennial, 18 to 34. With them, the recall was nearly twice as high. 93% lift in Rio versus outside and generated 36% better overall breakthrough, best than London’s 27% when we compare inside the Olympics to outside. And that superior engagement translates to the most important attribute, consumer behavior.
According to research from Google, within just two minutes of Nationwide’s ad at the opening ceremony, Google searches for Nationwide spiked to 38 times the brand’s normal level of search activity for that day. Another way to look at it, Fandango, the movie site, they corroborated the impact of Olympic advertising for Disney. Even with all the advertising appearing for Pete’s Dragon, there was still a 15% lift in visitation to Fandango pages dedicated to movie in an hour following the ad’s airing on opening ceremony. Finally, the auto category, according to Kelley Blue Book, research activity for the BMW X5 doubled, and shopping activity for the same automaker increased 16% in the hour after their ad appeared in the opening ceremony.
So you can see, the Rio Olympics are being presented and consumed in a way that reflects the new media environment and evolving consumer behavior. More platforms, more devices. In fact, the Olympics really is the ideal franchise to thrive in this new media world. The Total Audience Delivery, or TAD, is how we can understand and evaluate Olympic performance. I encourage you to use it, as we are, to have a far more complete understanding of how our audience is consuming the Games.
That’s it for me. I’ll turn it back to Mark.
Mark, can you talk a little about the profitability of this year’s games? I think you mentioned you thought you were going to do even better than you anticipated. Can you elaborate a little?
MARK LAZARUS: Because the Games are still going on, what I will say is that this will be our most economically successful Games, and the most economically successful Games in history for the U.S. So we are extremely pleased with where we’re going to end up.
In terms of the primetime performance, the numbers are down a little from London, but you also mentioned you’ve sold 30 million extra in ad inventory so far. Have you had any issues you’ve dealt with during the Games, or are the advertisers happy? Are you able to cume your online viewing to get the figures up higher?
MARK LAZARUS: We sell as a portfolio, we sell the Olympics. So what we’re talking about today with TAD is what we’re going to report as the Olympics. So, no, we’ve had no issues. Our advertisers are happy, and we have structured and managed our inventory in a way that, throughout the Games, they’ll be getting exactly what we promised them. They’re excited about being part of all our platforms, and that’s why we sell across all the platforms.
With digital thriving, cable thriving and — you know, you keep saying everyone’s talking about broadcast being down. Broadcast right now is at an unbelievable pace. We’re averaging well over a 15 rating. There is nothing on television averaging a 15 rating. That would be the No. 1 show, the No. 1 series on television. And let’s not forget that’s not just an hour of scripted for 22 weeks. That’s three to four hours a night for 17 days. That’s a lot of hours of really high ratings.
You received a little bit of criticism for some commentary that some viewers viewed as sexist. Is that something the network is sensitive to, and have these issues been talked about with your staff?
MARK LAZARUS: Of course we’re sensitive if people feel like we’re not being proper to certain groups. I think, in most of those cases, we’ve addressed it very quickly with the talent themselves. In one case in particular, we did discuss with the talent that we thought his comments, which were placed on Twitter, not on air, were insensitive, and he addressed it. But we, of course, want to make sure that we are inclusive and open to all groups.
Do you feel you’re doing a good job in terms of the number of women that are in the main announcing roles, or is that something you want to look at further as different Games go on?
MARK LAZARUS: I think we’re doing quite well. If you look at who we have on air, a host on NBC broadcast of Rebecca Lowe, host on NBC Sports Network in Carolyn Manno, many analysts, whether it’s Sanya Richards-Ross, who you haven’t seen yet who will be working track & field, Mary Carillo, who has had a prominent role with us for years on the Olympics, Tara Lipinski, Cynthia Potter on diving, I think we do quite well. We have a mix of backgrounds, a mix of diversity and inclusiveness within our array of on-air talent.
I just want to follow up regarding the make-good situation, because we were told that the advertisers were promised a household rating in the high teens. So, okay, we don’t have an exact number, but let’s say it’s 17.5. Well, you’re short of that. Are you telling us there is no make-good situation whatsoever regarding advertisers on the linear TV side?
MARK LAZARUS: We build inventory into what we have left, or, we build it into marketers’ plans to make sure we deliver what we’ve promised them. So if there is a small shortfall, we put it into inventory within the Games. So we’ll leave the Olympic Games with every advertiser getting exactly what we agreed upon.
So everyone will be whole by the end of this?
MARK LAZARUS: Correct.
When we talk about that guarantee, are you combining these numbers you have on cable simultaneously when they air in primetime?
MARK LAZARUS: Nielsen is not combining them. This is what Alan has been working —
No, but are you combining them when you sell them? We were told there was a number, and you’re not meeting that number in terms of household rating, and I think that’s what people have been writing about. We realize that obviously there is a sea change here in the way people watch and that you have all these digital viewers and all these other platforms, but in that apples-to-apples comparison is falling short.
MARK LAZARUS: When we sell to an advertiser and estimate a number, we sell a million dollars of inventory to someone, and depending on the advertiser, 50-60% comes on NBC broadcast, a percentage of it comes on our cable assets, and a percentage of it comes on digital. So in the case of broadcast, it’s down a little bit. But cable and streaming are up. It all comes together and mitigates the difference.
That’s what we’re selling and that’s why advertisers want to buy the Olympics. Yes, they want to get us in the range of what we promised them by piece, but it’s really the mix of assets and getting in front of the Olympic audience. That is what we’re selling and that is what they’re buying.
So you’ll get through this fulfilling all obligations?
MARK LAZARUS: Absolutely. And as I mentioned in my opening remarks, if we weren’t confident in fulfilling our obligations, we wouldn’t have been in the market selling another $30 million over the last six days.
So some of the inventory you’ve held back, some of that goes to make goods and some of that goes out into scatters?
MARK LAZARUS: If there are make goods, and we’ve still got a ways to go, but if there are, that is exactly right.
For all the talk leading up to the Games about Rio’s preparation, what has your staff’s experience been in terms of logistics and facilities and just kind of how everything is operating?
MARK LAZARUS: For us, largely, things are going very well. The events are taking place and the venues are operating well. Our ability to move around and get to where we need to be has been fairly seamless.
You’re dealing with normal traffic patterns of a major international city, but in general, it’s gone very smoothly. And I think all the hoopla that we heard about, surrounding whether or not Rio could pull this off—so far they’ve pulled it off without a hitch.
Mark, before the Olympics started, your colleague John Miller said some things that made some headlines about the demographics of Olympics viewership, and particularly the differences between how in his experience women watch the Games to men. I know it’s still early yet, but you’re about a week into the competition, counting the soccer that started early, and I wonder if you’ve noticed whether that has changed at all in terms of the female viewers out there, whether they might perhaps be more interested in live sports than your past market research showed? And then I’ll ask my follow-up question after that.
MARK LAZARUS: So far, over the first six nights, 55% of our adult 18-plus viewers have been women. So the way we create our storytelling and our narrative, mixed in with incredibly compelling competition, I think is working for men, women, and children. And that’s our goal. This is a very big tent and all are welcome. We program, we schedule, and we try to create a show around the competitions that’s welcoming to all. And I think so far we’re finding success against all of those metrics.
Is the demographics of — I don’t know what the best way to say this is. There’s always been some complaints that you guys should show more live sports. And the response, the way things have gone have been very successful. And obviously by your metrics they’re doing so. I just wonder if you think you’ve seen any changes? Even if the model has been successful, whether you think you’ve seen any changes in the demographics this year?
MARK LAZARUS: No, nothing significantly. It’s fairly consistent. First, as for showing more live sports. We should reiterate to you and to your readers, we stream every event live. Every single thing that takes place in Rio de Janeiro inside a competition venue is available live. That’s first.
Second, if you go to last night’s show, from 8 o’clock to 11 o’clock, we were live for beach volleyball and swimming. And then we had tape delayed piece of gymnastics that took place earlier in the day that we put on after 11 o’clock. There are only so many things you can put on. Simultaneously, on NBC Sports Network, there was the back end of a USA men’s basketball game and some ping-pong and a fairly significant soccer game between Brazil and Denmark.
We program a lot of live content. There’s only so many hours in the day, so some of it has to be packaged. And things like gymnastics are very difficult and sluggish to show live. We make it available live through our streaming products, but we think having it put on in a way that makes more sense to a broad viewing audience, not to the gymnastics aficionado who really know the sport.
But, again, we’re pulling 20 some-odd rating points for gymnastics. Those aren’t people who watch gymnastics every week or are fully knowledgeable in the sport. So part of our job is to try to help inform them and make the sport bigger.
Alan, you talked about average minute audience as being the metric that goes into the Total Audience Delivery report. It’s not a new metric per se and networks have used it in the past, but there have been a number of metrics used over the years by various different networks to try to quantify online streaming viewership. Do you think these Olympics solidify the average minute audience metric as the most equivalent to the metrics used to calculate TV viewership?
ALAN WURTZEL: Yeah, the average audience is what Nielsen reports. The problem is when you try to measure digital consumption, there are different metrics. So what we’ve tried to do is harmonize it so it’s all the same thing. Yeah, I do think this is something that’s not only valid, but actually far more accurate.
Mark, you did mention the $30 million in additional advertising time you’ve sold since the Olympics has started. Did you or do you have a goal into how much you’ll get for the rest of the Olympics? Figuring that you probably had good estimates going into where you were in previous Olympics and the trend line about where ratings would be. And in that regard, I imagine also where advertising sales would be in terms of in the Games.
MARK LAZARUS: In fact, it’s a baseline. We sold over a billion two in national advertising before the Games. I don’t anticipate or we don’t anticipate a whole lot more. There have been a few people who have asked to get into to bring some more money to the to the table. And some of them are current advertisers who are looking to add. But I don’t anticipate a whole lot of additional money coming our way.
Why is that?
MARK LAZARUS: I just think we’re in the middle of the Games and everyone who has had their interest has their interest and has already spent it. But let’s go back to, again, over a billion two, that’s more than we’ve ever sold before.
And that’s across all platforms, and I imagine the billion two is heavier from what you mentioned and a little bit more in cable and the digital platforms; is that correct?
MARK LAZARUS: No. First, the 1.2 billion is across all platforms, and every advertiser has a slightly different mix based on their goals. We worked to customize that, so I can’t give you a uniformed answer on that one.
And any particular categories, you might not know this detail, of who has been spending a little bit more advertising-wise on the Games?
MARK LAZARUS: The telecom industry has been very active.
As far as the ratings go, if they do end up being down this year from 2012, I was wondering how that might affect your ability to sell advertising in the 2020 Games, the 2024 Games? Do you think you’ll be able to sell 1.2 billion going forward if this year’s Games end up being less than 2012?
MARK LAZARUS: I can’t predict what the world economic forum is going to be like. But the amount of consumption and the dominance of the broadcast platform will really drive our future sales. If you think about what we’re doing, and I’m not looking to negative sell our competition, but the Olympics are dominating the media landscape. And if you guys want to measure us versus the broadcast competition, our primetime viewership is nearly 300% over the combined ABC, CBS, and Fox numbers on household. And it’s 400% above them combined against 18 to 49.
So from a marketer’s point of view, if you want to be in media at this time and you want to launch a product, or bring something to market, the Olympics is a great place to do it in an environment that is positive, brings people together, and is what I’ll call a celebratory place to be.
Mark, how would you view the pacing and frequency of your commercials during primetime regarding being viewer friendly?
MARK LAZARUS: I know there was some stuff written about the opening ceremonies about how many commercials we had, when, in fact, we had fewer than London. I do think that we try to pace it so that we can get the most content in, and when we’re live, we obviously have to do it based on when there is action and when there’s not action.
So we’re trying to be respectful of the viewer and take care of our obligations, both either in a delayed or a live environment. We certainly keep an eye on what we’re doing because we know it impacts viewership. I worry less about the social media people beating up on us. I wish they wouldn’t, but I worry less about that than what it does to our viewership and our relationship with our sponsors.
Mark, the ready room at the Olympic swimming stadium has captured some of the most fascinating moments of this whole event. I was wondering if you could tell us your thoughts on what it’s added to the coverage for viewers and whether it’s led you to think about putting a camera in some other places?
MARK LAZARUS: I think it’s very rare in sports and certainly in television that you’re allowed in the locker room. When you’re in the locker room, right as competition is about to start, I think it’s exciting. We’ve also seen a lot of really sort of fun athlete-to-athlete competition/game playing and playing head games with each other.
So in a voyeuristic society, when we can let people behind the curtain that way, I think it’s a very good and gets people excited. So now we’re doing it two ways. We had a camera back there that we were using on television, which was really a handheld camera, a cameraman back there showing it. And the reaction we received from viewers and from people was so positive that our digital team was able to get a permanent camera based in there. So we stream that live now all the time during the swimming competition as a second screen add-on.
I think it’s two things. One, it shows how we’re reacting to things that consumers are interested in. Two, it shows the sort of breadth of our rights and our relationships with the International Olympic Committee and the Swimming Federation. On short notice we were able to get that kind of access and give fans something they’re really interested in.