Video Essentials

NBCU Says Digital Is Important, But Only TV Makes Blockbusters

If you’re launching a niche movie, sure, make a sizable digital ad buy, said Steve Burke, CEO of NBCUniversal. But if you’re looking for a wide-scale mainstream release, you’ve got to have TV advertising.

Burke made that provocative statement during a marketing keynote today at CES. NBCU has made sizable investments in online video—such as creating the comedy subscription service SeeSo—but Burke is confident that the main three networks aren’t going away and there’s no substitute for television advertising.

Steve Burke, CEO of NBCUniversal (left) at his CES keynote

Steve Burke, CEO of NBCUniversal, at his CES keynote

The current advertiser perception is that digital ads are a shiny new thing that’s better that what came before, Burke said, but if you want to launch a major product you need to use TV. It’s hard to get the same emotional connection online as with a great TV campaign, and a would-be blockbuster film had better advertise during the Super Bowl.

Speaking about competition from commercial-free Netflix, Burke said “We sell to Netflix,” but admitted it effects ratings on some level. NBCU tries not to be strict about dividing companies into friends and enemies, he said, lauding Netflix as a wonderful business with a great delivery mechanism.

In 1998, Burke started out with Comcast, which merged with NBCU in 2011. Back in 1998, Comcast was a regional company for the Philadelphia market, Burke said. The key to growth has been looking to the future and taking risks. This is a time of great change, he noted, and it’s important to keep learning and building, to be entrepreneurial and look to what’s next. When the world is changing, the biggest mistake is trying to preserve the status quo. “Over the course of decades, I think you can create something really special. We will make mistakes, but one of those mistakes won’t be not taking risks and trying to build the company.”

Some of those risks have been acquiring online properties. “One of the reasons we invested in Vox Media and BuzzFeed is to learn from them,” Burke said. This year, BuzzFeed will send 12 staff member to the Rio Olympics to create profiles of athletes not included in the 50 video profiles created by NBC. Burke is curious to see the different angle the younger reporters take, and how those profiles engage a new audience. When someone has been covering the Olympics for 20 years, he said, it’s difficult to get them to think about covering it in a different way.

“I think the biggest challenge for anybody running a business in or outside of media is the impact of the internet,” Burke said. While online video has changed the TV business—for example, reruns on cable don’t do nearly as well nowadays since viewers always have so much fresh content to watch—he doesn’t see the TV business going away. Currently, 22 percent of all TV viewing is for NBCU properties, NBCU is the biggest provider of TV ads in the U.S., and the company has doubled its profitability in 5 years. “We have to be as smart as we can be.”

“In a crazy, challenging world, I like our hand,” Burke said.

Agree or disagree with Burke on the enduring value of TV advertising? Leave a comment below.


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