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Entertainment titans talk the future of TV ads at CES

Matt Kapko | Jan. 11, 2016
The worlds of marketing and entertainment are more complicated than they were a just decade ago and there’s no indication that things will get less challenging, but executives from leading TV networks who spoke at CES 2016 say the medium has a bright future.

digital advertising

LAS VEGAS — The old guard of media, entertainment and consumer services came to CES 2016 to shoot down reports of its impending death. Top executives from NBC Universal, Fox Networks, Johnson & Johnson, AT&T and JPMorgan Chase concede that disruptive technologies and startups have upended their businesses to some extent, but they all also expect long and successful futures.

Broadcasters have experienced tremendous market changes for more than a decade. After abjectly denying the shift for years, TV networks and studios came to accept the transition, and they now compete for viewers and revenue in many new ways.

NBC embraces digital despite challenges

This strategic shift, which appears to be paying off for NBC Universal following its acquisition by Comcast in 2010, forced older companies to shed their protectionist tendencies. NBC Universal doubled its profitability since being acquired, and the NBC network, which was valued at "close to zero" in 2010, now makes nearly $800 million in annual revenue, according to NBC Universal CEO Steve Burke, who participated in a CES panel discussion. And at least 20 percent of all TV viewers watch NBC-owned channels today, he said.

"You get in trouble when the world is changing if you try to preserve the status quo," Burke said. "The notion that digital is coming in and is going to supplant or destroy the television business, I don't buy."

Burke said the leading four broadcast companies, ABC, CBS, Fox and NBC, make more money today than they did 20 years ago, though the revenue streams are different and more complex.

NBC Universal CEO Steve Burke 
NBC Universal CEO Steve Burke (left) speaks to MediaLink chairman and CEO Michael Kassan at CES 2016. Credit: Matt Kapko

"The biggest challenge for anybody running a business in media today is the increasing impact of the Internet," Burke said. "We need to get better at distributing our product on the Internet."

NBC must also deal with a perception among some advertisers that digital ads are "somehow this wonderful new shiny thing that's better," according to Burke. He says TV is the most effective medium to reach millions of consumers, but advertisers clamor for the additional, targeted data they now expect in the digital age.

Why the TV industry should welcome change

Fox Networks CEO Peter Rice stressed that despite some very real challenges, technology is not an enemy for TV networks. However, these companies do need to adapt to market changes and provide more accountability for advertisers. "I don't think technology disrupts storytelling," he said. "The way in which we can bring addressability to advertising will really mean viewers have to watch less ads" and "distributors will not have to interrupt their programming so often."

 

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