NBC says it thinks Tokyo Olympics will be profitable

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NBC executives think that its coverage of the Summer Olympics in Tokyo will turn a profit — despite a yearlong delay and having to re-book advertising — thanks largely in part to streaming.

NBCU’s Jeff Shell revealed that projection on an investor conference call in late July 2021.

A key part of that profitability will be thanks to the company’s streamer, Peacock.

Peacock launched in 2020 and was originally supposed to use the games as a way to boost its launch — but the coronavirus pandemic ended up causing the IOC to delay the Olympics a year while NBC went forward with Peacock’s launch.

Now, NBC has gone full throttle with offering live coverage in the mornings on Peacock as well as exclusive studio shows around the Olympics.

In fact, two of the network’s studios inside the International Broadcasting Centre see significant air time on Peacock.

Peacock makes money by showing advertising to those subscribers who don’t pay at all or only subscribe to the “Premium” tier. It also generates income from a $4.99 fee for that same tier, which includes limited commercials, or the $9.99 it charges for “Premium Plus” that removes most ads.

Peacock is somewhat unique in that it offers a free tier of limited programming, including content from the Olympics, but executives held back higher profile events from the free plan.

Xfinity subscribers don’t pay for the premium tier but do have to watch ads.

For the occasion, NBC has created multiple “channels” on Peacock devoted to the Olympics, which, at least according to its published pricing guide, can still contain limited ads.

NBC only releases broader, limited subscriber data, so it’s not entirely clear how many people are paying for Peacock or how much ad revenue it’s actually generating.

Viewership for the 2020 Olympics on linear TV has generally been down, but NBC notably was including streaming viewers in the minimum audience guarantees it was selling advertisers.

NBC also notes that it will gain valuable insights and data about how viewers consume Olympics content via streaming, given that this is the first Olympics in history that has had such significant streaming presence in the U.S. — and it will use that information to build its arsenal and, hopefully, profits, for its coverage of the 2022 Winter Olympics in Beijing next year.

Pre-pandemic, NBC Sports also swapped Super Bowl years with CBS so that it could air the 2022 Super Bowl and Winter Olympics nearly back to back in January and February — opening the opportunity to sell advertisers bundles across both events.