FOR IMMEDIATE RELEASE
Tuesday, February 13th, 2018
NBC OLYMPICS’ PYEONGCHANG OLYMPIC WINTER GAMES MEDIA CONFERENCE CALL — TRANSCRIPT
Tuesday, February 13, 2018 – 3 p.m. ET
Mark Lazarus, Chairman, NBC Broadcasting and Sports
Joe Brown, Senior Vice President, Research, NBC Sports Group
GREG HUGHES: Thanks, very much, and thanks everybody for joining us today. We’re joined this morning by NBC Chairman of Broadcasting and Sports Mark Lazarus, and our Senior Vice President of Research for the NBC Sports Group, Joe Brown. We’ll go ahead and start with some opening remarks by both, and then we’ll take your questions. Let’s go ahead and start with Mark.
MARK LAZARUS: Good morning, everyone. Maybe good afternoon to some of you. It’s 5:00 a.m. here in PyeongChang, sort of typical time of our morning start. We appreciate you all joining us today. Every couple years we’re reminded just how powerful the Olympics are. The incredible competition, the sportsmanship, the interplay of politics and culture, and it’s unmatched in anything else in the media landscape.
Our hosts here in South Korea have been exceptional. The organizing committee has done a tremendous job on everything from transportation, to infrastructure, to technology and beyond getting this city and region prepared for the games, and it’s made our lives a lot easier.
Our team, led by NBC Olympics President Gary Zenkel, have assembled 2000 folks who are here bringing the games back to the states. Not just do we have 2000 folks here in Korea, but our operation in Stanford has 1100 or so people doing great work, smoothly working together across the world and bringing these great pictures and stories back to our audiences across all the platforms. Whether it’s linear broadcast television, whether it’s cable, whether it’s digital, whether it’s streaming, the incredible quality production that NBC Sports is known for along with our storytelling, we believe, is really shining through over these first few days of the games. Add to that our new primetime host, Mike Tirico, is just as good as, if not better than, we thought he would be. He’s done a fantastic job of seamlessly coming into a difficult and complicated role to become the face of NBC Sports Olympic primetime coverage.
The games are off to a great start. Both the competition has been exciting and thrilling in many places, and the results that we at NBC are delivering are very strong as well. Our audiences across all platforms have shown unprecedented dominance in the media world, and there are several reasons that we see for that. As this story evolves, we’ll continue to talk about this.
But to remind everyone, for the first time we chose to program the Olympics live across the country. We’ve also put programming on NBC Sports Network in primetime up against or to compliment the NBC broadcast primetime shows. This is the first time we’ve done this for a Winter Games.
In addition, all of this can be streamed for the first time on NBCOlympics.com and NBC Sports app during the primetime shows. That allows us to assemble an audience in primetime in a way across multiple platforms that we never have before.
Again, we’re streaming all the competition live. This is something we started back in 2012 with the London games, and we continue to innovate, as for the first time we streamed the opening ceremonies live.
Putting all of these platforms together takes a need and technique around selling and around measurement, and we do that with what we call total audience delivery. So we sold and are measuring against every platform, and that’s become really an industry standard. It shows that audiences are consuming the Olympics on these platforms on par with or exceeding the levels of Sochi in 2014, and in some cases Rio 2016.
As a reference point, the top two entertainment shows on television right now that were on in 2014 are down 32% and 19% respectively. The Olympic Games continue to hold their power, their ratings, and continue to assert its dominance against the media landscape.
On a bit of a broader scale, we recently announced yesterday that NBC is America’s most watched network for the first time in 2002. Over the past several years our entertainment programming has gotten very strong; our sports programming continues to gain strength; our news programming continues to gain strength. Over the next 12 nights the Olympic programming on NBC will add to the lead to continue for NBC to be America’s most watched network.
The Olympics continue to defy media gravity speaks to the power of this programming, power of this content, power of what bringing the world together on the field of sport and exhibiting it well in a high-quality environment across multiple platforms can do. Our team’s innovative approach of reaching viewers wherever they are has paid off for us and for viewers.
So couple quick points around Olympic consumption. Our Olympic primetime programming around NBC and NBCSN is routinely doubling and sometimes tripling the audiences of the other three broadcast networks combined. The Olympics have now won their primetime slot for 61 consecutive nights between Winter and Summer games. That’s an incredible track record. We’re delivering and even over-delivering our advertising partners, our affiliates and our distribution partners.
There’s been some things written about sponsors who aren’t spending as much, and that’s unfortunate for them, because what’s happening, especially with our new advertisers, of which 60% of our advertisers are new, they’re reaping great benefits of these huge American audiences that are being rallied and/or assembling and/or being rallied around the great athletes on our platforms.
The advertisers are already letting us know that they’re seeing results, they’re feeling very positive about their investment in the Olympics.
Our ratings success has increased our capacity, in somewhat a way we weren’t expecting. So with that, we still have the ability to go back into the market and sell more, and we’re in active discussions right now with advertisers to either expand or new advertisers to come in. All based on the fact that our ratings success has given us more inventory to be in the marketplace with, so it’s a very nice luxury to have.
NBC Sports Network, or number four, our fourth point, is our 24-hour, seven-day a week cable network, as you know. It’s been a top five network in all of television, and has even beaten broadcast networks in primetime on multiple occasions over these first few days. In fact, on Saturday and Sunday, we were the number one cable network each day in primetime, and those are the two most watched days in NBCSN history.
As the world continues to evolve towards multiple distribution points and digital consumption, we have already surpassed for the entirety of the Sochi games with the digital consumption here in PyeongChang. It’s really quite incredible. So we’re continuing to see an uptick in people using connected TVs and people watching video on multiple screens. It’s really amazing that in just five days, we’ve had more consumption of our digital video product and digital product in these first five days than we did in all of the 2014 games. On connected TVs, it proves again that TV continues to be the big screen, as a place, a gathering point for multi-generational viewing.
Lastly, in terms of this consumption, we have great partnerships across other forms of media, and we’re seeing great consumption there, BuzzFeed and Snapchat in particular, where millions of younger fans are touching our content in a way that we have the ability with those partners to monetize it.
In short, we’ve created a strategy to reach viewers wherever they want to be and however on every platform. As recently as 1996 people were only able to access the Olympics on one network, NBC. We’ve decided to innovate to create our own competition or complementary coverage, and the result has been an overwhelming consumption success.
So that said, Joe, will give us a little more of the facts and figures behind those theories.
JOE BROWN: Happy to, Mark. And as you talk about integration, these games really demonstrate how we’ve innovated measurement in a metric like total audience delivery. We’ve covered across broadcast, cable, and digital, looking at metrics for just one platform won’t give you the complete picture of consumption. You’ll miss out on the audiences across our platforms, including some of the success we’ve seen on cable, where on Saturday afternoon women’s biathlon peaked at 5.5 million viewers per minute. Then on Sunday, skiathlon grew to over 4 million viewers, and the share has to come from somewhere. Eyeballs don’t suddenly appear. So we’ve talked to the audience, and they’ve told us what they’re doing less of to be able to watch the Olympics.
Like a lot of us here, many of them are losing some sleep, as a quarter of them indicated they’re getting less sleep as they’re watching the Olympics. But close to 60% have indicated their share of Olympic viewing has come from less consumption of streaming services like NetFlix, Hulu, and Amazon.
Joe, do you have the raw numbers from the first five days of what your total delivery average is and your primetime NBC average compared to Sochi and Rio?
JOE BROWN: Sure, through the Olympics to date in primetime we’re pacing at nearly 24 million viewers per minute, and that’s across all of our platforms for NBC, NBCSN, and digital in prime.
And what is it for just the NBC?
JOE BROWN: NBC we’re at about 22 million, and there’s another 2 million on cable and streaming.
MARK LAZARUS: Why are you so focused just on the NBC? That’s not the way we sell it or it goes to market. I’m just curious.
I’m just getting both of them.
MARK LAZARUS: I know, I’m just curious. I assume your guys want to sell all your product, digital and papers and everything, not just one piece.
What was the five nights comparison to Rio and Sochi?
JOE BROWN: You know, I don’t have Rio in front of me as we’re looking at a winter games. But we’re down single digits from Sochi, an event that was four years ago.
No, I get that, and I understand. I know what it is in comparison to other programs on TV. So what is the average number through five days for Sochi, to compare?
JOE BROWN: Six percent down.
Mark, you mentioned at the top that you were pleased with Mike Tirico’s performance and how he had seamlessly, in your opinion, moved into the Bob Costas chair. Can you give me a sense of how you would judge such a performance, and what you were looking for that’s brought you to the opinion that Mike has been such a good fit in your mind?
MARK LAZARUS: Yeah, I think first the lead up to the games, his preparation, and working with the team, many of whom spend many, many hours doing incredible research to prepare all of us for these athletes from around the world who aren’t always household names. So, again, just the way he came into the team and learned and studied and became prepared.
His ability to tell stories. His ability to take those stories and come through the screen and do it in a way that I think viewers of all kinds, men, women, children find accessible and pleasing in a way. Then watching him do interviews here, whether they were on tape with athletes or athletes’ families, and then really something that’s just started, because the games just started, seeing him in the studio with the athletes or with their parents and his ability to connect with them and draw them out and make them feel comfortable, give them an interesting story line for the viewers.
So all of that combined, I think, makes him a great primetime host, and we couldn’t be more pleased.
I want to ask a local question, because I’m sure you wouldn’t be unhappy if the numbers we get here were reflected across the country. I’m just wondering if you have any research that indicates to you why people here watch the Olympics so much more than the average American?
MARK LAZARUS: I’ll give you my anecdotal. I don’t know, if, Joe, you have factual stuff. But anecdotally, you’re in an Olympic city, and there is a heritage around the Olympics. People know that and appreciate that and that bears out much it’s always been the case that Salt Lake has always given us a nice rating above what turns out to be our average. So, yes, we’d like them all to be like Salt Lake City, but you guys are tremendous supporters.
But we were like twice the national or more than twice the national average on opening ceremony night. I continue to be startled by it. I’m just wondering if you’re just used to it at this point?
MARK LAZARUS: We’re used to you guys over-delivering. I think right now, given the discussions that are taking place in your city and the potential of bids in the future, I think there is maybe a little even heightened sense of Olympism than in past games, just given the potential of a games coming your way in the next decade or so.
When you said that South Korea is down 6% from Sochi, is that across all platforms or was that just on NBC? Was that a global number or just NBC broadcast TV network?
JOE BROWN: No, that’s across all platforms.
Okay, two questions —
MARK LAZARUS: Just so you know, that’s all platforms in primetime. We haven’t really laid out for you our other day parts, which are all up in many cases and we have more content. So in primetime, it’s strictly a primetime number.
JOE BROWN: Yeah, when you combine all of our day parts and all of our platforms, our total consumption is going to be up overall. I believe at the end of these games, forget what day part you’re looking at or what platform you’re looking at, this will turn out to be the most consumed Winter games in history. We just can’t — we’re only a third of the way in. But the trend line towards that is very positive.
That’s because you think you’re shifting just all this other content available on all these other product forms during the day will drive that consumption, is that right?
MARK LAZARUS: Right. We know during primetime we have a number for NBC, we have a number for NBCSN, and we have a number for streaming. It’s all Olympics. It’s not necessarily the same show. There are people who want to watch figure skating. There are others who want to watch biathlon or speed skating, and we’re running the same commercial wheels through there and we’re able to assemble that audience into a primetime Olympic audience. The diversity of content is unique here.
Two questions, I don’t understand how you can go back through the market or how the higher ratings will result in more capacity for advertising. That’s one question. The second one is I sort of feel like this digital, this concentration on digital and the comment that like the digital surpass — in five days surpasses Sochi is sort of misleading, because it seems like TV is consuming all that, or sort of gobbling up all that data consumption. You’re not really seeing an increase in audience. Could you put that into perspective? In other words, is there actually more people watching this stuff on like non-TV? Once you take out the connected TVs, are people actually watching more of this on these other devices? Because it seems like with both the Super Bowl and the Olympics, it’s like 2 million people or so. It doesn’t seem to be like a big — just put the connected TVs into perspective, please?
MARK LAZARUS: Sure, I’ll touch on the advertising piece first and then Joe can take the hard one. So, when we sell at a certain rating and we keep a certain amount of inventory aside to make sure we protect ourselves and our advertisers in case of short fall, our goal at every Olympics, really with every property is that when that property or season is over is that our advertisers have gotten everything and more than what we promised them.
We are on a pace right now where the inventory that we held aside for potential underdelivery of our estimates is not going to be needed. The amount that we’ve saved is not going to be needed. We therefore can, because of the higher ratings, put the inventory we’ve held aside back in the marketplace.
JOE BROWN: I’ll just say on the digital side, when we talk about that larger consumption, we’re talking about total minutes consumed. So that’s happening across different devices, whether that’s mobile, whether that’s desktop or connected devices which will end up on a television screen where we’re seeing a tremendous increase as well.
Your left coast ratings have been quite good. I’m curious if most of these are coming from the live broadcast or from the late night, I guess re-air that you’re doing of the primetime showing on the West Coast?
MARK LAZARUS: Sure, the bulk of the audience for the West Coast markets is coming from the initial live telecast, the primetime telecast starting at 5 o’clock locally in the Pacific time zone. That’s where we’re seeing the majority of impressions. Then we’re actually seeing a nice lift for what used to be our late-night show, now the prime plus show, which is now hitting in primetime on the West Coast, so audiences are now hanging out and staying around for that show as well.
Mark, we haven’t had a chance to talk to you since the USA Gymnastics mess has occurred. I realize this is a different Olympics than the Winter Olympics, but you still have a significant degree of programming involving USA Gymnastics. Do you have any thoughts on the challenges that that federation currently faces?
MARK LAZARUS: Yeah, first and foremost we feel very sorry for the victims and I think it’s a horrible thing that has taken place as it relates to governing bodies of USA Gymnastics. I believe they need to have a complete overhaul of their systems and their protocols and of their protections of their athletes. I know there is an independent investigation underway for us, that can’t happen fast enough. I think the USOC also needs to make sure that they have an independent investigation and pushes very strict and severe governance rules down through the federation community.
Can you quantify the lift that you’re getting from the live broadcast in Los Angeles? Is it doing better than Sochi?
MARK LAZARUS: The live telecast?
Yes, the LA market.
MARK LAZARUS: The live telecast versus the tape telecast from Sochi, the five-day versus the eight to 11, am I getting the question right? In Los Angeles.
JOE BROWN: Yeah, I would have to go back and look at individual market levels. In generalities, the Pacific live telecast is behaving very similarly to the rest of the country.
MARK LAZARUS: We’ll see if we can follow up with you on this specific market data.
Can you give us a sense of what percentage of these buys are? Because I know that some advertisers have just bought TV. I’m talking about NBC plus NBC Sports Network, what percentage of the buys are straight through or broadcast, plus cable, plus digital?
MARK LAZARUS: Yeah, the vast majority have bought the entire suite of products, pushing 90%. There are a few advertisers who haven’t. But it’s largely bought and marketed as a complete package.
You’re not telling us what the guarantee is, but obviously it’s meeting the guarantee?
MARK LAZARUS: Correct. Because the guarantee works across all the platforms, and we don’t really have an individual platform against anyone. We have certainly targets, but we are exceeding those targets.
Talking about the coast-to-coast live thing, a lot of rationales were given as to why that wasn’t a good idea in the past. It doesn’t sound like they’re holding up. Do you think it would hold up though if this weren’t in Asia, if you couldn’t be putting live events on?
MARK LAZARUS: You know what, we’ll have to think through that. We don’t have to think through that until 2024 though because we’re in Asia for a little while with the games. You know, Phil, I think the time has come for the games here, in this time zone and certainly in any sort of North American time zone, we’ll have to wrestle with that decision as we get to Paris in 2024. The Olympics have performed, whether live or on tape in primetime, and we’ll have to make those decisions. A lot is going to change in the media landscape in the next four years, six years. Certainly every day it’s changing, but I agree with you that sort of the premises or truths that we believed in the past are all breaking down here, and what we’re providing now is a great consumer experience that is responsive to today’s consumer.
There have been a couple of things you had to apologize for or at least have been somewhat embarrassing, they were on tape. Was there any thought to giving to perhaps going in and pulling those things out before they aired?
MARK LAZARUS: No. We don’t like making mistakes or doing things that are uncomfortable, say, for our hosts here in Korea. We apologized quickly to the organizing committee. We had experts in the midst who understood the sensitivities. Much of, we believe, and I can’t speak for the Korean people who were offended, and I respect and understand that they were offended, we believe we certainly had no intention of that, and that there was some degree of misinterpretation to what was said. All that being said, it’s not our job to equivocate or justify or try to explain to folks who were offended that they shouldn’t be offended. We simply apologized and moved on.
Mark, just sort of following on the USA Gymnastics question mark. I mean, it’s such a horrific failure of the governing bodies of that sport. You could say the USOC, perhaps. Then we have the scandal with the doping. What do you think that these things — how will these things impact the games going forward? Do you — can gymnastics, USA Gymnastics recover in time for the next summer games?
MARK LAZARUS: Well, first, I agree that it was a horrific failure of the system and the impact on these young women. Yes, I do believe that USOC and USA Gymnastics now are on a path towards putting their program back in place. I certainly hope for all the young women who want to be gymnasts that they will have the outlet of USA Gymnastics in a safe environment to perform at their highest levels. We know that people who were involved in or victims like Simone Biles says she plans to compete in 2020. We certainly hope that they’ll be able to rectify their program and continue going forward. There is new leadership now at USA Gymnastics. The new leadership began in December, and they’re working to piece that back together. I think gymnastics is obviously an important part of the Games, and I don’t see it going away, and I do believe that the USA program will get strong again very quickly. But first and foremost they’ve got to create a safe environment for their athletes.
I just want to make sure I understand. So you guys set aside extra commercial spots in case you under-delivered, but you don’t expect you’re going to need them because the ratings so far have been higher than what you’ve promised so you’re selling more ads in the marketplace currently?
MARK LAZARUS: Correct. We have those available for the right kind of deals.
You’re down 6% from the Sochi games, I just want to understand how would that work if you’re down from four years ago but you’re actually over-delivering on your promises? Are the audience guarantees lower this year than they’ve been in the past?
MARK LAZARUS: Yes. We anticipated some drop off in audience from four years ago, and if you look across the entire media landscape, if you were down 6%, and that’s only primetime, let me remind you. Some of our other day parts are over-delivering, and that helps get us closer to our guarantees, and our total consumption will be up. But the direct answer is we anticipated that we’d be down a little bit with just that primetime number, which is what you are asking about.
If you look at the total media landscape, if you’re down roughly 5% over a four-year period, there is nothing doing as well as that in television. So we’re doing very, very well. We sold over $900 million of advertising for these games, and that part of it was primetime, part of it was daytime, part of it was digital, part of it was broadcast, and we are very excited about the way audiences have found the games. One sort of anecdote is we’ve looked through these first five days of ratings and coverage. In some past games we’ve seen very big spikes for certain events and then audiences coming and going.
What we’ve seen here is that people are coming for the Olympics. They’re coming and they’re staying at a relatively even level throughout the evening, and that’s very encouraging considering we haven’t really had a whole lot of action from the biggest U.S. stars as of yet.
Chloe Kim was in primetime last night. Shaun White made a brief appearance in primetime last night and he comes later in the week. Mikaela Shiffrin and Lindsay Vonn haven’t even skied yet. Nathan Chen, the king of the quads has had one brief appearance early in the team figure skating, but his events come later.
So stories are being made with new athletes and new stars, but we’ve still got our big stars to come. I think we’re very encouraged by the way the audiences are coming for the games regardless of what the specific content is, because they’re watching it all. Whether it’s biathlon or speed skating or figure skating or the snow sports, it’s the games and the message of the games is I think what’s resonating with the American population right now.
Since you guys are back in the marketplace, do you have any idea where you might end up on advertising? You said you’re over $900 million now. You said you’ll get over a billion by the time this is over?
MARK LAZARUS: There won’t be and there isn’t that much capacity. We have a few million that we can sell for advertisers who either came in with smaller buys and want to buy up or the potential of new people who maybe were reticent to come in and now see the dominance that this product has in the media landscape. If you want to sell your product in these next two weeks, we’re the window to the consumer.