NBC is the No. 1 broadcast network in 18-49; however, season-to-date ex-sports primetime ratings have slipped across key demos. While NBC's broadcast network is just ~12% of Comcast's revenue and ~3% of EBITDA, the broadcast network continues to be a key engine of growth for the NBC Universal assets. We highlight three key takeaways from this morning's presentations: 1) emphasis on original dramas; 2) the draw of NBC's sports programming; and 3) the importance of data. Please refer to our 04/21/2015 upfront preview; we estimate that NBC will experience flattish dollar volume commitments YoY, based on 5% CPM increases and 76% sell-through rate.

Scheduling around existing hit franchises

Given the need to revive ratings, NBC has refreshed a large portion of its primetime lineup and plans to build its schedule around veteran successful shows, including The Voice and The Blacklist. Although Bob Greenblatt (chairman of NBC Entertainment) highlighted the increased competitiveness in original programming and in dramas specifically (with 250 original drama series industrywide), NBC has high hopes for Heroes Reborn and The Player, which are scheduled to slot in on either side of The Blacklist (see below for a list of renewed and new shows).

The draw of NBC's sports programming shows no sign of slowing

Including the impact of the Super Bowl, NBC remained the No. 1 broadcast network in 18-49, an improvement from 2012 when the network also had the Super Bowl but nevertheless finished the season in joint-last place. Mark Lazarus (head of NBC Sports group) expressed his confidence with regards to the 2015/16 sports programming lineup, highlighting his optimism in Horse Racing, Premier League, PGA Golf, and, of course, Sunday Night Football (SNF). SNF remained the No. 1 show in primetime and boasts several marquee matchups in 2015/16. Further, the network will host the Rio Olympics in 2016. At the time of airing, Rio will only be one hour ahead of the East Coast, which should lend itself for more live events in primetime vs. the 2012 London Summer and 2014 Sochi Winter Olympics.

The importance of data

We think NBCU is among the most innovative broadcast networks as it pertains to integrating big data into its ad sales platform. While Linda Yaccarino (chairwoman, Advertising Sales and Client Partnerships, NBCUniversal) acknowledged the increased availability of digital video inventory, she stressed that only quality video matters. To prove the effectiveness of its ads, NBC has been on the forefront of data acquisition and analytics, including the following:

NBCU+ powered by Comcast – delivering on promise of household addressability.

NBCUx – offering clients programmatic access to premium content across the company's entire portfolio combined with data-enabled targeting.

AOL partnership – which has given AOL access to NBCU's portfolio of broadcast networks, cable channels, and digital networks. The partnership now provides advertisers a single platform for reaching consumers across screens, from mobile devices to TV.

Audience Targeting Platform – NBCU is leveraging third- and first-party data to provide its clients with a better/data driven insight into which NBCU shows their desired audiences are watching.

Fig. 1: Renewed and New NBC Shows

NBC's 2015/16 lineup

Source: The Hollywood Reporter, Nomura research

Fig. 2: Season-to-date broadcast ratings (ex-sports)

NBC's ratings have declined YoY

Note: Viewership based on live, primetime (ex-sports), total household data.
Source: Nielsen, Nomura research

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U.S. Media - Quick Thoughts on the NBC Upfront

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