Tired of sequels and franchises? NBCUniversal Chief Executive Steve Burke isn’t.
At the 2016 Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills, Calif., on Wednesday, Burke was full of praise for Universal’s film studio and theme parks, the $250 million in profit from NBC’s Rio Olympics coverage and Spanish-language Telemundo.
He also made it crystal clear what he thinks the staples of a film studio should be — underlining the logic behind NBCUniversal parent Comcast Corp.’s recent acquisition of DreamWorks Animation.
“When you look at the film business, you want to be in core franchises, sequels and animation,” Burke said. “Animation being the best of the best.”
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He added that DreamWorks Animation, which has a consumer-products business roughly the same size as Universal’s, will help Universal expand its sale of merchandise. DWA characters will also pop up at Universal’s theme parks.
“We think it’s a perfect deal for us,” Burke said. “We paid a premium, but there are tremendous synergies.”
Burke said Universal has tripled its theme park revenue since he took over. He also said the plan remains for Universal Studios Beijing to open in 2020 — Universal will own a minority stake, and its Chinese partners will own the rest — which he expects to be “the park” in China’s capital city.
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“Theme parks — which was a part of the company we didn’t think about too much when we bought it — is one of our favorite parts of Universal,” he said.
Burke’s presentation wasn’t all highlights — he acknowledged that NBC’s Olympics ratings fell short of four years ago — but attributed much of the discrepancy to NBC airing different events simultaneously on its cable channels, and the fact that London was, in his words, a “high-water point.” Despite low ratings necessitating make-goods to advertisers, he said the sheer volume of televised events across NBC’s networks allowed the company to come out of the games with fewer make-goods than it entered with.
“You really have to look at total audience delivery, and by that metric we were down single-digits versus a very successful Olympics,” Burke said.
Burke also spoke about opportunities with Telemundo, the Spanish-language broadcast network NBCUniversal owns. “If you look at cash flow over debt service, Univision is at $1 billion,” he said. “Telemundo was making almost no money when we acquired it.”
But Burke predicted that as Telemundo — which has Spanish-language World Cup rights — moves toward ratings parity with Univision, that monetization will come.
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Burke also weighed in on over-the-top streaming services, such as Dish’s Sling TV, which compete with Comcast’s cable offerings.
“OTT sounds like a better business than in reality it is,” Burke said. “If you want a decent size bouquet of cable channels, your programming is going to cost 40, 50, 60 dollars. If you have a cable package with 200 channels, you’re not going to pay $45 for 25 channels.”
Burke said despite that, NBC is interested in maximizing the value of its channels, so it will continue to pursue deals with streaming providers — but only if they’re sufficiently lucrative.
“We want to make sure we make as much or more selling to an OTT provider as we do to a [multichannel video programming distributor, like a cable company],” Burke said.
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