Olympic Payoff for NBC’s Strategy

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What can TV viewers in the US do about their widespread unhappiness with NBC’s “tape delay” strategy for the Olympics?

Not a thing.

(If anything, expect this strategy to be re-used in the future…But more about that in a second.)

And NBC has not made things easy by showing promos that reveal the results of tournaments or matches before the actual event itself is broadest. Things have gotten to the point where even The Onion has a satirical item with Michael Phelps and NBC’s Bob Costas:


LONDON—Following a morning interview with Bob Costas, American swimmer Michael Phelps is reported to have surreptitiously asked the NBC anchor how well he does in tonight’s 200-meter individual medley final. “I know you guys know the results of these things before you air them, and I know you’re not supposed to say anything, but how do I do? Do I get a medal?” 

So the “beyond TV” generation is live-streaming the Olympics from NBC’s website, looking at videos hosted outside the US, going on twitter, etc. But waiting for NBC is the only option for those that either cannot or do not want to to see the Olympics on anything but their TV screens. On top of that, new data is revealing that large numbers of live-streamers are watching the same games again when NBC broadcasts them in prime-time. Excerpts from All Things D:

  • On Sunday, 43 percent of Americans said they had heard about some of the Games’ results over the Web before they saw them on TV. But NBC argues that this turns out to be just fine: 67 percent of people who knew about the results said they would watch, anywaymore than people who hadn’t heard about the Games.
     
  • On Saturday night, people who had watched livestreamed events that day were twice as likely to watch parts of the same events on the prime-time tape delay.

What does all of this mean for NBC?

Unprecedented ratings,

…Through Tuesday, the network averaged 35.6 million viewers through the first five nights…That’s 10 percent ahead of Beijing in 2008, which had live coverage in primetime.

and perhaps a chance to break-even on just these games (without having to wait until 2020) as opposed to losing $200m. And a $200m swing in fortunes is not small change even for Comcast, NBC’s parent:

The network’s TV audience has exceeded that of the Beijing games four years ago over six nights so far, Lazarus said. That has allowed NBC to charge more than expected for additional advertising time the New York-based company is making available, he said. The network initially projected a $200 million loss.

Net-net, what we are seeing is that when there are few credible substitutes for a product or service (the games being telecast, in this instance), it gives the supplier increased power and when the supplier uses complementary substitutes (online streaming) cleverly, it increases the demand for the original product or service. 

All of this will teach NBC and other media companies some very interesting things. Expect NBC, comScore and other research and analysis entities to dig very deep into the tera bytes of data being generated here for various causal patterns and correlations (viewing habits based on: demographics, location, iPads vs Android Tablets, iPhones vs Android Phones, Safari vs Chrome vs Firefox, etc.) in order to boost traffic, mindshare and revenues for future events.

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