Advertisers say ‘Bravo’ to NBCUniversal’s Digital Era Business Model
NBCUniversal has a long history as an entertainment industry icon. Prior to their partnership, Universal and the National Broadcasting Company individually played integral roles in today’s media landscape. Universal was the result of a 1912 multi-company merger to create the film industry's first all-encompassing production house, whereas NBC came to existence in 1926 with a focus in radio broadcasting, however quickly venturing into television by live-broadcasting national events. By 1953, both companies began capitalising on technological advances, such as 3D film, and by the mid-to-late twentieth century, had produced trademark hits life NBC’s Saturday Night Live and Universal’s Jaws, cementing their place in entertainment history. With the rise of the digital era came their well-timed 2004 merger, and an evolving outlook on how to maintain their largely advertising-based financial structure in an age when traditional methods were becoming obsolete. Through digitalisation, NBCUniversal’s access to audience data has increased their ability to provide content more suited to their market, while simultaneously being able to sell audiences more efficiently to advertisers for ‘branded entertainment’ opportunities (Elliott, 2013). Drawing on examples from their popular network television channel Bravo, acquired by NBC in 2002, I plan to explore how NBCUniversal has modernised its focus in the digital era by acquiring digital assets, integrating advertising into content, and expanding their audience through globalisation with the purpose of better serving its advertisers.
With the rise of the digital era, media companies are able to expand their reach into niche markets by way of merging with or acquiring other media companies who already have those established connections (Carah & Louw, 2015: 50). Prior to this age, Universal chose to diversify with physical assets like theme parks and hosting studio tours, whereas NBC explored network acquisitions and third-party brand partnerships culminating with the 1996 launch of MSNBC — a Microsoft and NBC cable news network which also has an online presence where audiences can engage with the network and news — which set a new precedent for blending digital into the media landscape (NBCUniversal, 2018). This gradual shift away from traditional media impacts the way audiences engage with media content allowing NBCUniversal to gain valuable consumer data which they can then in turn use to better target advertising efforts to speciality markets. NBCUniversal Cable Entertainment President of Strategy and Commercial Growth, Dave Howe, states that the company’s goal in these acquisitions and investments is to ‘build some digital scale,’ going on to say they are aiming to ‘expand into new revenue streams like e-commerce’ (Poggi 2017). This goal becomes apparent when looking at the company’s recent moves in the digital sphere by acquiring and investing in apps and websites fitting their various niche audiences, allowing them to use their network channel shows to seamlessly promote them through product placement and integration. These methods can be seen with the beauty and wellness app Priv which Bravo began integrating into content in 2014 as a ‘road-test’ for viewers (Pedersen, 2017). In May 2017, NBCUniversal took full ownership of Priv, along with becoming the majority stakeholder in the online learning and lifestyle community Craftsy, soon to be known as Bluprint (NBCUniversal, 2018). Both Bluprint and Priv are frequently integrated loosely into plots on lifestyle reality shows such as The Real Housewives, Shahs of Sunset, or Southern Charm. Priv’s business offerings fit best with most of Bravo’s reality show formats, as it’s an app where customers can digitally book in-home beauty and wellness appointments with professionals in their city. However, when Priv was first acquired by NBCUniversal in 2014 only major US cities were in operation, meaning Bravo could only promote Priv in cities where their content overlapped with its availability. This limitation isn’t the case for Bluprint, an online platform where customers learn new lifestyle skills via a streaming video library created by their online community, making it easier to integrate promotion in their content. Southern Charm, a non-scripted reality show following a group of affluent friends in Charleston, South Carolina, has become a new avenue for promotion recently. In a 2018 episode titled ‘Game Changer’, Bluprint, then known as Craftsy, was highlighted in a substantial segment where two cast members used an online recipe to cook lunch together, showing how easy the platform is to operate. NBCUniversal’s investment in emerging digital platforms has coincided with their push to create exclusive digital content hosted on their own websites and apps allowing for even more audience engagement. Featuring videos on their website beginning in the mid-2010s, Bravo was able to add new touch points for audiences to engage with content, and in turn provide marketing data. Now offering exclusive content online, Bravo provides digital originals such as peer interviews, comedy sketches, and after-show interviews with their stars. In some instances, these videos are independent of show narratives, while there are others that provide an important piece to the show’s series-long arc. In the culinary competition show, Top Chef, when a contestant is eliminated they have the opportunity to earn a place in the series finale through a separate, online-only show called Last Chance Kitchen. Bravo teases this at the end of each episode by showing a glimpse of the eliminated chef’s preparation before quickly plugging their website for the full episode. Dedicated viewers are then driven to BravoTV.com as to not miss what could possibly be a large twist to series finale episode. Along with their own digital streaming assets, NBCUniversal are investing in third-party providers, such as Hulu and Amazon Prime where they offer early or live streaming access to content with a paid subscription. Both allow them to tap into user data while selling their products to a specific niche market. In cases where they are not investors, NBCUniversal create avenues for viewers to purchase content or subscribe through separate channels on streaming platforms. For example, Amazon Prime has many of NBCUniversal’s entertainment programmes available to stream, however they are not included in Prime’s services, so viewers have to purchase whatever series they’re looking to watch in order to stream it. However, NBCUniversal offers its customers another streaming option on Amazon Prime through various additional channels which customers can subscribe to for a small monthly fee and watch hundreds of hours of content, most often as it airs on television. The digital channel Hayu hosts Bravo and other reality shows owned by NBCUniversal on Amazon Prime. By subscribing to Hayu, viewers have access to a wide variety of domestic and international reality show content. Alternatively with Hulu, NBCUniversal content is included in the basic subscription since they are minority investors in the platform. With Bravo’s content on Hulu, often times they will not stream the most recent series of a show until the next series is about to air on television, leaving dedicated viewers more than a year behind on content, leading customers to pay for a higher subscription level in order to view the most recent shows. By keeping certain content behind a paywall, NBCUniversal are able to entice its audience to pay more for exclusive access, counteracting the profits they lose on advertising. Investing in digital apps and streaming services enables NBCUniversal to collect audience data at an expanding rate. Through their own platforms and utilizing third-party partnerships, the company has found its footing in the new digital landscape while pioneering ways to gain even more access to its audience, helping advertisers reach their market and producers learn what type of content sells.
Another way this media giant has adapted to the digital era is through integrating advertising into its entertainment content. NBCUniversal’s history with product placement hit its stride in Universal’s film E.T., when brand partner Hershey experienced a dramatic profit increase for Reese’s Pieces after the candy was integrated into the film's narrative by being the treat used to bribe the ‘alien out of hiding’ (Hudson and Hudson, 2006: 491). Due to this success, integrating products into entertainment content has become more common in the industry, being dubbed ‘branded entertainment’ (Hudson and Hudson, 2006: 491-492). Branded entertainment can work on many different levels as far as integration, some seeming more natural to the audience than others. One way to integrate advertisers into content comes in reality competition format programmes, such as Bravo’s long-running competition cooking show, Top Chef. With each series filming in a different region or American state, the opportunity for brand integration becomes accessible to different parties. In the 2017 series, Top Chef: Colorado, Bravo partnered with a number of cookware brands, but also included local tourism companies in its list of promotional partners. Not only are the grand prizes for winning the show heavily featured, Bravo utilizes the episode’s multi-challenge format to work in additional sponsors as prizes for contestants or showcase products integrated into the challenge itself. These types of co-branded opportunities benefit from another layer of advertising, as these products receive ‘added value’ from being labelled a prize and ‘the urgency created by the competition mirrors the urgency of advertising rhetoric’ (Deery, 2009: 12). Products being worked into the show as prize for competitors allow audiences to be introduced to products through an authentic experience rather than a traditional spot advertisement. In an episode of Top Chef: Colorado titled ‘Smile and Say Mize’, chefs competed in a Blue Apron sponsored challenge, where the chefs were asked to prepare a dish using ingredients provided by the brand to win a Blue Apron subscription for a year. To introduce and help judge this challenge was the head chef from a local Colorado restaurant, adding yet another layer of advertising opportunity for brands or businesses. At least once an episode Top Chef employs a guest judge from a well-known or up-and-coming restaurant in the state or region they’re based that series. This format allows Bravo to profit from different ranges of sponsorship on local, regional, and national levels, giving smaller brands an opportunity to reach national audiences, but it also helps Bravo by allowing them to refresh their partnership pool each series in a way that appears natural Another form of branded entertainment NBCUniversal and Bravo have explored is using their well-known reality stars to act in short scripted advertising spots promoting upcoming films. While the media company often uses this route to promote its own releases, it also will partner with third-party companies such as Marvel Studios and Disney. With the release of Black Panther in the spring of 2018, Bravo utilized two of its Real Housewives reality stars to act in a scripted commercial which was edited to look and feel as though the pair were integrated into part of the film as they were speaking and interacting with their surroundings, never breaking the fourth wall. On other occasions, more so with NBCUniversal affiliates, Bravo will create a themed night around the promoted film, as it did with its 2016 film The Boss. Bravo relabeled its primetime airing of a Real Housewives of New York episode as ‘Bossy Housewives Night’, wherein two of its stars participated in multiple 30-second spots promoting exclusive sneak peeks of the film along with their ‘secrets on how to live large, like a boss’ (SonjaMorganOnline, 2016). Not only are NBCUniversal partnering with third-parties for branded entertainment opportunities, but they offer their lifestyle reality show stars a platform to promote their own growing business or investments on their respective shows on the condition that Bravo Media receives a percentage of profits. The platform for promotion is a major plus for reality stars to sign on to shows, as they have an opportunity to make a name for themselves or grow a business while organically integrating it into their storyline since it’s part of their real life. As reality show audiences grew, this became a more lucrative opportunity for both talent and management, after seeing meteoric rises of some of their stars. Bethenny Frankel of The Real Housewives of New York, and various spin-offs, first appeared on-screen in 2008 when she was a struggling natural foods chef trying to get a business off the ground. Viewers witnessed her entrepreneurial journey first hand from a cringe-worthy scene of Frankel struggling to give away free food samples in a New York grocery store to what is now a multi-million dollar empire. However, this aspirational storyline for viewers was a missed opportunity for NBCUniversal and Bravo Media to capitalise on their star’s success. It’s now become standard for ‘The Bethenny Clause’ to be included in reality star contracts stating that the network will receive a cut of profits from any personal business a star chooses to promote during their run on the show (Nededog, 2016). While there are many benefits for production companies to integrate brands into their content, the push largely comes from advertisers seeking ways to combat the new digital era’s aversion to traditional television advertising. Brands like Coca-Cola are even opting to avoid traditional ‘advertising spots’ for ‘ideas that bring entertainment value to [the] brands, and ideas that integrate [them] into entertainment’ (Hudson and Hudson, 2006: 493). By NBCUniversal embracing this type of structure with its reality lifestyle and competition programming, it attracts more advertisers seeking those niche markets in a way that promotes positive brand awareness in real-life situations or with people interacting with products and services.
While the digital era has made it easier to access traditional audience data, it also allows companies like NBCUniversal to expand beyond their geographical borders and reach international audiences leading to even more advertising opportunities and consumers. Using globalisation techniques and methods of cultural industrialization, the acquisitions or partnerships with international production companies allows NBCUniversal and Bravo to film franchise shows around the world and air content to different networks of audiences thus widening their base and allowing them to more effectively sell audiences to advertisers. One segment of this method comes with the acquisition of international production companies. Two such companies brought under the NBCUniversal umbrella in recent years are Australia’s Matchbox Pictures and UK-based Monkey. Both production companies are responsible for a variety of entertainment content spanning drama, comedy, and reality genres, while also producing their respective international versions of The Real Housewives franchise. Keeping the growth of this iconic show under their complete ownership, NBCUniversal has more control over content, advertising, and distribution, therefore not being forced to share profits or audience data with competitors and giving its advertising partners direct access to international markets. When the company chooses not to acquire an international production company, but still wants to potentially expand viewership to different national audiences, the best route may be to sell franchise or syndication rights to other networks. Although it might not directly lead to advertising revenue, NBCUniversal additionally sells franchise rights for its original shows to international third-parties allowing for another revenue stream to the company without the fear of tarnishing their brand. While in the digital age audiences may be aware that there is another version of one of their favourite shows on in Vancouver, without an established partnership between media companies, it’s unlikely that this other version will be accessible to audiences. For example, it’s widely known to US demographics that The Real Housewives has sister shows operating in various Canadian cities, but as these do not fall under the NBCUniversal or Bravo umbrella, viewers are unable to access these versions. American audiences are only aware of their existence due to online gossip sites or social media. Most unaffiliated franchises aren’t even available to US viewers on digital streaming sites such as Amazon Prime or Hulu. While partnering with international networks to air original programming is lucrative, it arguably might not be the most effective way to draw the audiences NBCUniversal or its advertisers hope for when branching into various international markets. It’s worth noting that despite the rise of digital technology, ‘national viewing patterns’ remain largely unchanged, meaning that ‘people will generally watch domestic television programmes when given the choice’ (Hopper 2007: 64). As media companies search to find truly ‘global television’ (Hopper 2007: 64), they instead enlist their international production companies to reproduce successful programme formats locally which their audiences will likely relate to more than if they ran the original programming. Then, by either partnering with broadcasting networks or using their affiliated international networks, are able to provide original content to new regional audiences with the potential to broadcast these new shows internationally. Bravo’s The Real Housewives is a prime example of how this type of franchising is beneficial to the media companies and networks involved. With ten international franchises outside the US including Australia, Hungary, and South Africa, Bravo Media is able to sell a relatively loose-structured show to multiple companies without worrying about potential flops effecting their established brand. Most notable is the cross-promotion between NBCUniversal owned production companies and the content they are able to test on international audiences. Their recent acquisition Matchbox Pictures is responsible for Real Housewives franchises in Sydney and Melbourne, as well as Auckland, New Zealand. Not only are these shows aired in their local regions, but The Real Housewives of Melbourne is also aired in a primetime television slot in the US, with all three of the franchises being available in the UK on Amazon Prime. Alternatively, The Real Housewives of Cheshire, the UK franchise produced by NBCUniversal owned Monkey, is relatively local in its broadcasting, with US Bravo only airing one series of the franchise on television in an off-peak time slot. However, most US Real Housewives franchises air in the UK, with all English-language franchises, even those not owned or produced by an NBCUniversal company, are available on UK Amazon Prime via their subscription service Hayu. By NBCUniversal expanding globally through acquiring international production companies, selling franchise rights, and creating regional variations of its programming to better suited to culturally-diverse audiences, it maximizes its effectiveness for potential advertising opportunities and can profit from intellectual property right without the risk of damaging its brand.
NBCUniversal has successfully evolved its brand and financial model to keep up with competition and thrive in a digital economy. Shifting its focus in this new landscape by acquiring digital assets, integrating advertising into content, and expanding their viewership, NBCUniversal has found its footing. Looking forward, the company will likely lean into these methods, especially as brands continue to look for avenues around their audience’s aversion to traditional advertising. As NBCUniversal continues to successfully implement branded entertainment into their programming, and as their markets progressively widen through globalisation, the pool of brand sponsorship opportunities, as well as audience data access, will only grow. With their effective and proven track record, companies like NBCUniversal are going to be big players in this current and strengthening phase of advertising in the digital economy.
SOURCES
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