If you run a broadcast network these days, it’s easy to feel left out.
“All the excitement is about cable and streaming,” the chairman of NBC Entertainment, Robert Greenblatt, said in an interview. “We are the forgotten business on some level.”
The talk in the entertainment industry has indeed drifted elsewhere lately, with the streaming giant Netflix luring the super producers Shonda Rhimes and Ryan Murphy away from traditional television with nine-figure deals and Apple starting to shell out the $1 billion it earmarked for streaming content to the actress-producer Reese Witherspoon and other show creators.
Earlier this month, Mr. Greenblatt lost a top NBC Entertainment executive, Jennifer Salke, to another free-spending upstart, Amazon Studios, which hired Ms. Salke as its new leader.
But Mr. Greenblatt’s network is positioned relatively well among the networks. Last week, NBC pulled ahead of CBS in total viewers through the first 20 weeks of the 2017-18 season, the first time it has had the lead since 2002.
Mr. Greenblatt has another reason for optimism: He is holding onto a trove of in-house statistics he believes are the key to proving to advertisers that broadcasters can make the transition to the streaming universe.
Nielsen ratings, which measure the number of viewers who tune in for shows at the time of their broadcasts, are down for the networks yet again — 10 percent this season. NBC has responded by learning to make money from viewers who stream its programs — and now it is learning how to put a number on it. The key is gathering statistics from services like NBC.com, the NBC app, video on demand and Hulu to determine how much money its shows are pulling in from streamers.
Take “This Is Us.” According to the network’s data crunchers, NBC has earned around 47 percent of the revenue generated by its 2016 pilot episode from advertising through digital views. Over all, 44 percent of the revenue NBC has earned from “This Is Us” has come through digital viewership.
Similarly, the critically acclaimed sitcom, “The Good Place,” starring Kristen Bell and Ted Danson, has earned roughly 36 percent of its revenue from digital advertising, NBC said.
The new source of revenue is NBC’s attempt to make up for a larger decline in advertising dollars. Television ad sales fell 8 percent in 2017, one of the biggest drops in years, Bloomberg reported. That’s why executives like Mr. Greenblatt need to make the digital business work sooner rather than later.
“It’s not insignificant now,” he said, “and I think over time it grows into becoming really significant.”
Not every show is making big money from digital views. About three-quarters of the revenue NBC made from the 2015 pilot of “Blindspot,” for instance, has been earned the old fashioned way.
But NBC was less savvy back then in extracting money from viewers who preferred streaming. By the time of the first “This Is Us” season, NBC had wised up, striking a deal that allowed it to earn money from Hulu ads shown during episodes of the hit tear-jerker.
Generating revenue from streaming is relatively new for the networks, said Jeff Bader, NBC’s president of program planning, strategy and research.
“When I came to NBC five years ago, we were in this place with: How are we going to manage this business that’s been in decline?” he said. “We were doing everything we could not to be the record industry and have our stuff pirated and not monetized.”
Particularly depressing was the number of younger viewers who seemed to be changing their viewing habits.
“For years, we were seeing our average age go up, up up,” Mr. Bader said. “Younger viewers were drifting. ”
Once the network examined the data, however, it saw that younger viewers hadn’t abandoned NBC. They were just watching shows on their own schedules.
NBC has intensified its efforts to measure the nontraditional audience with the Winter Olympics. Its latest ratings reports have combined the number of viewers it reaches through broadcast, cable and streaming platforms under a single figure it calls total audience delivery. This is the network’s attempt to counter the Nielsen measure, which shows a shrinking Olympics audience.
NBC understands the reason for the advertising community’s skepticism concerning the number of people who watch shows via streaming, however.
“That is the frustrating part of the whole ecosystem,” Mr. Greenblatt said, “because we don’t have a third-party objective measuring system that everyone has adopted that we all buy into.”
Until that third-party system emerges, Mr. Greenblatt said that his sales department has gone all-in on selling advertisers on a statistical portrait that is prettier than the one painted by Nielsen.
“This started for me purely on looking at viewership numbers, because I wanted to be able to make the argument, ‘People aren’t just bailing on network TV,’” he said. “Then it occurred to us, it’s not just a viewership number we’re defending. It’s part of the business model now and it’s going to be move that way more and more.”
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