Comcast’s NBC: More Hits Than Misses In The First Quarter Of 2015

Comcast's ( CMCSA ) broadcasting network NBC has performed well in the first quarter of 2015. The network has benefitted from the record-breaking viewership for the Super Bowl and the popularity of its shows such as The Blacklist and The Voice . However, it has not been all smooth sailing for the network. In this piece, we evaluate the performance of Comcast's broadcasting network in the last three months.

Our price target for Comcast stands at 62.41 , implying a premium of around 10% to the market.

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NBC Builds On Last Year's Success

NBCUniversal contributes more than 32% to Comcast's stock value, according to our estimates. NBC's broadcasting business is an integral part of this segment, bringing in over $8.5 billion in revenues last year. NBC saw a resurgence in its ratings last year and finished the 2013-14 primetime season as the number one ranked broadcasting network in the coveted 18-49 demographic. The 2013-14 season marked NBC's first win in that demographic in 10 years. The network has continued to build on that success and is currently number one in the 18-49 adult demographic halfway through the 2014-15 season. The network's success has been led by last year's breakout hit The Blacklist and the Christina Aguilera reality show, The Voice . The Voice has consistently helped the network win the Monday primetime battle and The Blacklist has adjusted well to its new slot on Thursdays. NBC took a gamble by shifting The Blacklist from its usual slot and that gamble has paid off, with the show registering a six-week high in total viewers for the week ended March 22. The network has in turn rewarded its top performing drama by renewing it for the 2015-16 season. Chicago Fire, Grimm, Chicago P.D. and Law & Order: Special Victims Unit are some other shows that have been rewarded for their consistency and will come back next year.

NBC also broadcast Super Bowl XLIX during the quarter. The network reported that the event featuring the New England Patriots and the Seattle Seahawks was watched by 114.4 million viewers, setting a record for the biggest audience to watch a television program in U.S. history. The rights to televise the Super Bowl are rotated on an annual basis between CBS, Fox and NBC and this year's Super Bowl will definitely contribute heavily towards NBC's revenues. The company also managed to sell out its TV and digital livestream ad inventory for the Super Bowl. Even though NBC has not released any official figures, the network could have raised as much as $360 million from ad sales with each 30-second commercial slot fetching an estimated $4.5 million.

Not All Smooth Sailing

As well as NBC performed, the quarter did have a few blips for the network. The biggest failure by far would be the fact that NBC could not find a breakout hit along the lines of last season's The Blacklist in this year's crop of TV shows. The network invested heavily in promoting its new offering Allegiance but had to cancel the show after just five episodes due to low viewership. Other shows such as State of Affairs, Constantine, About a Boy and Marry Me have received tepid responses from the audience and could potentially join the scrap heap of already cancelled shows such as Bad Judge and A to Z .

NBC News also suspended nightly news managing editor and anchor Brian Williams following a controversy regarding certain comments he made about his experiences in the Iraq war. This has resulted in a drop in ratings and the network has recently brought back Andy Lack to take over as chairman of NBC News and MSNBC in order to take control of the situation. Andy ran NBC news from 1993-2001 and it will be interesting to see whether he can stem the dip in ratings and turn things around for the news giant.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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