This article is linked to TV Viewing: The New Dynamic – an exclusive white paper prepared for MIP Markets by Ampere Analysis — in which Research Director Guy Bisson speaks to NBC Entertainment’s Jeff Bader.
NBC Entertainment develops and schedules the network’s primetime, late-night, and daytime entertainment programming. NBC’s programmes have earned the network critical acclaim, numerous awards and ratings success, including most recently winning the traditional September-to-May season in primetime’s key demo, marking the network’s third win in four years.
NBC’s key scripted, alternative and late night content include the #1 new series and #1 broadcast drama, This Is Us, #1 new summer series World of Dance, The Voice, America’s Got Talent, Saturday Night Live, the Chicago dramas, The Blacklist, Shades of Blue, Superstore and The Good Place.
NBC Entertainment is a part of NBCUniversal, which owns and operates a portfolio of news and entertainment television networks, a premier motion picture company, significant television production operations, a leading television stations group, world-renowned theme parks and a suite of leading internet-based businesses. NBCUniversal is a subsidiary of Comcast Corporation.
Guy Bisson: Cutting through the hype, how would you summarise the key changes in the way consumers are watching and engaging with TV?
Jeff Bader: The whole ecosystem is changing and where people are choosing to watch their video is case-by-case now. You are seeing the younger audience watching their video game consoles, and Internet connected boxes are really starting to pick up. So we’re just seeing people accessing programming everywhere and there is a demographic divide. We can see ratings by device now; we can track where people are watching digitally; we know people’s behavior: if they are watching live…if they are watching on-demand they are going to watch more episodes over a longer period than if they are watching traditional live. Also there are differences for a broadcast network, many of the changes in behavior relate to scripted entertainment, not to the wider programming that the networks are scheduling.
> So for that wider programming is there a skew towards live viewing still?
As a network we schedule 14 hours a day across our affiliates and over the course of a year we are 80-90% original and 50% live, so much of the viewing is close to where we air. This is opposed to the entertainment programming where if you break that out there is a huge tail over 35 days, 100 days, 200 days and we are seeing an incredibly long tail now for scripted programming.
> Does this place the advertising model under threat and what can broadcasters do to mitigate ad-spend migration?
We’re not a single stream business now and we are not just making money from the commercial ratings. That’s still the largest part of our revenue, but now we monetise in different ways on different platforms…whether that’s sub fees or a portion of sub fees. Now with the new Virtual Multichannel Video Programming Distributors (VMVPDs) we can get the retrans (fees) for that as well. So we are monetising our viewership not just through commercials.
> How does the changing device usage for viewing TV content impact the concept of primetime…for example, is there now a mobile-screen primetime as well as a main-screen prime time. Is the concept of primetime still relevant?
Primetime is still relevant for us because, as a network we don’t broadcast, we have 240 affiliates that broadcast and they primarily sell live or same day, so primetime is very important to them. We just went through our whole upfront process, devoted to the primetime schedule with the understanding that that’s just a portion of our business, but it’s an important portion. For people that watch regular linear TV, that’s what primetime is about. For a lot of people, they don’t watch ‘primetime’, they watch shows, and we acknowledge that.
> What’s the knock-on effect on content the type of programming that is scheduled throughout the day?
As of today, for a broadcast network, the bulk of our revenue still does come from primetime revenue. Obviously it’s something that we pay attention to. The rules have changed dramatically for how you determine what that primetime schedule will consist of. There are certain axioms that still hold true: programme flow matters. But we’re aware of that…older viewers watch more of the schedule than younger viewers. The average audience for live TV is in their 50s. The average audience for Over-the-Top (OTT) is in their 30s. We know that. We are already beginning to see shows renewed for primetime that in the past, based on ratings, you might say ‘why is that show coming back’ and you can surmise because it’s making money somewhere else. So in the holistic view of our business, it makes sense to keep that show in in primetime as well.
> Have you noticed that the types of content or the genres of content that drive viewing are changing, and is there a content preference segmentation emerging between different age groups?
We are seeing changes, but it’s not always what you would expect. For example, Law and Order Special Victims Unit (SVU) skews older in the broadcast realm with an average viewer age of 50 in primetime, but surprisingly has a younger average age on digital than for This is Us, which surprised me. So the average age of Law and Order SVU is 30 when you include OTT, which is young. You have a different audience by device, but we are still learning that a show that would be narrow in the old days of broadcast, wouldn’t be narrow on OTT as well. We are now turning the corner with the younger people who grew up with it (digital and online), they watch on their devices, their iPads and they know they have access to all the shows that are airing and it will be interesting to see what happens with these Virtual MVPDs that are coming out. Now they will be able to watch live TV on their devices as well…so will we see a broadening out of audience on some of these shows that were really only on broadcast. We are really at a crossroads right now.
> What impact is binge viewing having on the economics of programme making and of advertising?
Monetising binge viewing is a different business. We still talk about it as a way for people to catch up, so they discover programming and they come back to the live or DVR/VOD that we are airing. But we are trying to encourage people to binge view, we encourage them to go and catch-up then we monetise them digitally. Whether they watch over 12 weeks or 12 days, it’s still the same number of (advertising) impressions.
> With the migration towards non-linear viewing, how does the concept of ‘a channel’ or ‘a network’ need to evolve?
A lot of time is spent discussing brand and what it means to watch on the NBC network. So if you watch it on NBC it is important to air it in your own environment, but we know that is not going to be the case in the future. So in some cases we will be able to push the NBC brand along with the show and in some cases people will be watching a (NBC) show that Netflix is showing.
> Is there a shift among platform operators to re-focus from channel brand to the show brand?
We are trying to find the balance (in branding). We would love to have our shows wherever they are airing to have some sort of indication that they are an NBC show, because we do have a studio that produces shows for the network, but it would be nice if people were aware that this show is coming from our company. Some people are continuing to push their apps, we are all getting behind the serious aggregators of networks where we are allowed to live in our own branded environment, hopefully that will be the majority of where people will discover our shows.
> What’s your view on the current drive for high-budget scripted drama, opinions on whether this is a bubble about to burst seem mixed?
There are so many shows out there but it’s still our bread and butter. We are not cutting back, we are increasing the number of original programmes. Our primetime schedule has gone from 55% original ten years ago to over 80% original now. People don’t come to us to watch repeats.
> Is the increase in originals a direct response to Netflix?
No, it used to be the only place you could watch the shows was on the outlet that was providing them. So if you wanted to watch an NBC show you had to watch it on the network. Now the repeats are available everywhere, you can watch them on Hulu or other platforms. So, we still air some repeats but we know that (repeats) are not what people come to the broadcast network for.
> What can broadcasters and networks do around content and ancillary services to attract and retain Gen Z viewers (young viewers just entering their teens)?
It’s just trying to make sure that we are on every new platform as it evolves. But the new Virtual MVPDs will create a change because it will be an opportunity for young people to watch live programming on their devices, which they haven’t been able to do until now. We’ve come through a period where with broadcast programming we haven’t really had an opportunity to reach (those viewing on devices) but now we will be able to reach them.
Find out more about the new TV Dyanmic in Ampere Analysis’ exclusive white paper, here!