NIELSENWAR: The Olympics Crush Primetime and Comcast Takes Over the Universe

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THE WINTER OLYMPICS have been doing what they were meant to do for NBC.  In the first full week of ratings to include the Sochi Winter Games, NBC completely dominated the (mostly sleeping) broadcast competition with a 5.5 average primetime rating (Live + Same Day) in 18-49s.  Far, far behind were FOX (the only network to air almost its full regular schedule) at 1.4, ABC at 1.0, CBS at 0.9 and CW at 0.3.

The Olympics also solidified NBC’s grip on the season to date lead, although it’s again critical to note that the high ratings for the Games come at a gigantic price, very possibly $1B or more between rights fees and production costs for the 18 days of coverage.  As with the NFL but even more so, the ratings earned by the Olympics don’t equate to network profits–especially since the Sochi ratings, while easily defeating all other network competition, have been at record lows for the past few days.  The season average (Live + Same Day) through Feb. 16:

NBC:  2.66 (up 14% from last year and up 0.14 from last week)

FOX:  2.45 (up 12% from last year–entirely due to the Super Bowl–and down 0.05 from last week)

CBS:  1.98 (down 26% from last year–again, mostly because it aired the 2013 Super Bowl–and down 0.05 from last week)

ABC:  1.60 (down 12% from last year, with no sports excuses, and down 0.03 from last week)

CW:    0.54 (down 4% from last year and down 0.01 from last week)

NBC has also been in the news this week by virtue of its status as a division of Comcast, which of course announced its plans (subject to regulatory approval) to purchase Time Warner Cable for $45.2B in stock.  Assuming the deal goes through–and allowing for some moderate divestitures and cosmetic alterations, it’s likely to–this will make Comcast the largest cable operator in the country, with 30 million subscribers and valuable new territory in major cities that include New York and Los Angeles.

A deal of this magnitude has ripples that go far beyond the effect on a single network, or even a group of networks.  The new Comcast will become the single biggest negotiator with all the broadcast and cable networks for the right to carry their content, and while thus far broadcasters have had the better of those confrontations (e.g., last year’s warfare between Time Warner Cable and CBS), because the cable operators fear “cord-cutting” and desperately need the valuable content that only the networks have–especially NFL games–the expanded Comcast will be so big and its distribution footprint so widespread that even a CBS or an ABC/ESPN will have to worry about not being carried on its systems.  In theory, that could hold down prices for subscribers, although the other edge of that sword is that as viewership goes down, the networks need that revenue to survive in their traditional form.

Looking into the future, the implications are even bigger for content carried over the internet.  Comcast agreed as a condition of its NBCUniversal acquisition that it would follow “net neutrality” rules until 2018, even if those rules are no longer federal law (a recent court proceeding has rejected them).  But 2018 is barely an exit on the information highway away for a conglomerate that lives by 5-year and 10-year plans.  If and when Comcast is no longer bound by net neutrality rules, it will have control of the amount of bandwith it provides to content providers like Netflix, YouTube (which is to say Google), Amazon Prime, Hulu–and for that matter  ESPN and all the other networks that are increasingly in the business of providing streamed content (which right now includes NBCUniversal’s Olympics coverage).  Favored companies–which would probably mean those that pay a premium–will have an abundance of high-speed availability, while the others will face delays and low-quality video.   Such costs will inevitably be passed onto consumers, and as the consumption of home entertainment moves more and more to an on-demand model, control over those “pipes,” as they’re commonly referred to, will become control over content.  Welcome to the future.

NBC is also at the center of the action for the next week or so as it introduces THE TONIGHT SHOW and LATE NIGHT to their new proprietors, Jimmy Fallon and Seth Meyers.  We’ll have more to say about those shows as they debut, but Joe Adalian’s Vulture piece provides a good overview of the changing late-night landscape.