Despite TV ratings drop, NBC says the Rio Games was still a financial success

An unexpected drop in the TV ratings for the Rio Games won’t keep the event from being the financial success that NBC predicted.

NBCUniversal took in more than $1.2 billion in advertising sales for its 17 days of coverage across its broadcast network, cable channels and streaming video. Although the network’s average audience of 24.9 million viewers was down 18% from the London Games, NBC Sports Group Chairman Mark Lazarus told The Times that the audience levels guaranteed to advertisers were met through the available ad time NBC had going into the Games.

NBC had promised advertisers the Games would get prime-time ratings comparable with four years ago. When it became clear the number would fall short, advertisers received additional commercials to make sure they reached the number of viewers they paid for.

Time originally allocated for promotional spots for NBC shows were also used to give advertisers “make good” ads.

As a result, NBCUniversal will be able to keep all of the record-setting ad revenue that came in before the Games began. The $1.2 billion-plus take is a 20% lift over the London Games and will make Rio the most profitable Olympics in history, according to NBC executives.

“Every advertiser left the games Sunday night with everything we owed them,” Lazarus said. “We didn’t quite get there the way we thought we might but we got there.”

NBC could have taken in even more ad revenue if the audience guarantee had been met.

But executives did not anticipate how many viewers would watch the thousands of hours of live coverage NBC streamed online, which pulled away some TV viewers — although the network has yet to determine how many.

NBC’s digital content reached 100 million unique users, up 28% from 2012. They were not “cord-cutters” because a cable or satellite subscription was required to stream NBC’s live Olympic coverage. Viewers streamed 2.7 billion minutes during the Games, more than all past Olympics combined.

“We were surprised it grew as much as it did,” Lazarus said. “Common sense tells you — there is a percentage of them that we think would have watched it on television.”

One reason for the surge in streaming is that the number of homes with Internet-connected TV sets has more than doubled since 2012. Those users accounted for more than 40% of the online Olympics streaming that occurred in prime time.

“It wasn’t like people were saying, ‘I don’t want to gather with my family and watch it on the big screen,’” said Lazarus. “They just wanted a different kind of experience.”

Lazarus said about 10% of NBC’s Olympic ad sales — which comes to around $120 million — were for its streamed content. That percentage will probably rise in future Olympics, he noted.

But going forward, Lazarus said NBC will have to work on finding the right balance of live and taped Olympic events in prime time that will attract the kind of mass audiences advertisers will pay a premium to reach. NBCUniversal has the TV and digital rights to the Olympics through 2032.

“Broadcast television is still the largest aggregator of eyeballs and I think it will be for the foreseeable future,” Lazarus said.

Jim Bell, the executive producer for NBC Olympics, said the shift in viewing habits should be considered when measuring the success of the Rio Games.

“To use the equation from the 1980s or 1990s is missing the world we’re in,” Bell said. “These streams and screens are a rising tide. The total consumption of the Olympics is up. If you asked anybody in the media world, they would be happy with that.”

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Twitter: @SteveBattaglio