Peacock gives thanks to a turkey: Parade is one saving grace for NBC

What's hokey, full of hot air and increasingly looking like a Thanksgiving miracle for NBC? The network's 61-year old tradition of broadcasting the Macy's Thanksgiving Day Parade. The three-hour broadcast remains as popular with viewers as it was in 1991 -- a feat that's remarkably rare among television networks and almost unheard of for NBC these days.

To put that into perspective, NBC currently draws a 4.9 household rating, less than half of the 12.3 rating it enjoyed during the 1991-92 season (before networks started losing viewers in droves to cable and the Internet), according to Nielsen Media Research. NBC now only attracts 5.6 million viewers to its nightly prime-time shows. Yet somehow, the Thanksgiving Day broadcast has managed to hold steady at roughly 20 million viewers annually since 1991, according to Nielsen. Even more intriguing, the rival Thanksgiving broadcast on CBS has shed viewers during the period, falling to about 7 million viewers from 10 million in 1991, Nielsen says.
A "Cultural Institution"

The inoffensive chatter of Today's hosts -- this year Matt Lauer, Meredith Vieira and Al Roker -- layered over the patriotic shots of high school marching bands and the spectacle of high-flying balloons careening through New York's caverns has congealed into a cultural touchstone. It's a show that families can turn on in the morning while preparing their turkey without worrying whether grandpa or the grandchildren will be ruffled.

The Macy's Thanksgiving Day parade began in 1924, more or less as a gimmick for macy's to boost holiday sales. The first few years of the parade only featured floats, with the giant balloons joining in 1927, according to History.com.

"It's an American cultural institution," says Jon Swallen, senior vice president of research at TNS Media Intelligence, a research firm. "So it's a shared family event. It has a particular appeal for families with children."

And it also has special appeal for advertisers. Advertising demand has been strong this year, with sales tracking about even with last year's $17.3 million, according to a source familiar with advertising negotiations. Rates for the Thanksgiving broadcast are much higher than what a typical Thursday evening broadcast can command, according to the source.

While flat sales may not seem like good news, it's actually an accomplishment given that network television ad sales declined 5.5% during the first six months of the year. NBC parent General Electric (GE) said on its third-quarter conference call that sales at NBC dropped 20% during the first half of the year. Yet, the company is quick to point out that sales would essentially be flat year over year if revenues from last year's Olympics were stripped out.



A Much-Needed Opportunity to Self-Promote

Among the big advertisers for this year's Thanksgiving show is parade sponsor Macy's (M), which under its agreement with NBC, is the sole department-store advertiser for the broadcast. Past advertisers include consumer giants such as Kraft Foods and Mattel. And then, of course, there will be NBC, which will use the opportunity to advertise its own shows to the 20 million viewers it hopes will again tune into the program this week.

"We look at that platform as one that we use to launch or energize several of our campaigns," John Miller, the chief marketing officer of NBC Universal Television, tells DailyFinance."The Olympics will get a number of spots and mid-season shows that we're bringing up will get spots" such as The Apprentice, a new show called The Marriage Ref and Chuck, he says.

NBC will also sprinkle some of its shows stars into the parade -- the incomparable Jane Krakowski of 30 Rock, for example, will sing from a float. "We try to get as much NBC talent as possible," Miller says. "It's a real promotional opportunity, although we try to make it festive. It's a great opportunity to expose both new and old shows."

A Bright Spot in a Lackluster Lineup

So what about Jay Leno, whose sad ratings for his new prime-time show are partly what's making the once-proud peacock resemble a turkey? "He's doing a show that night in LA in front of servicemen," Miller says, adding that NBC will promote Leno's broadcast that evening during the parade.

With 20 million viewers tuning in, can Thanksgiving save NBC? Probably not, although it won't hurt, says Harold Vogel, the author of Entertainment Industry Economics: A Guide for Financial Analysis and the CEO of investment firm Vogel Capital Management "Whatever impact it has is in the right direction," Vogel says, adding that it probably won't "make a big difference, but it's a great promotional tool."

When NBC conducted research on the show, it discovered that viewers' associations with it went beyond a fondness for the floats and balloons. Their audience was actually reminiscent for a simpler time -- before hundreds of cable channels and the Internet invaded the broadcasters' hold on television. "The analysis found that people had a fond feeling for the Peacock and the days when we were mostly TV," Miller says. For those three hours on Thanksgiving morning, a broadcast network can dream it's just like 1991 again.

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