After a few days of action, we are getting a glimpse into the future of sports TV with NBC’s somewhat brave real-time “experiment.” NBC’s challenge was to strike a balance between the way people consume information in 2012 with the need to make back their more than $1billion investment in the games.
The network has to satisfy all the audience segments and stakeholders at the same time. The audience ranges from super-savvy social media savants to grandma and everything in between - the very definition of a mass audience on a nationwide scale. And, they have to balance the needs of their sponsors with their distribution partners (cable/satellite) and reconcile that with the International Olympic Committee. The reality is, the only way NBC can make it work financially is with expensive broadcast commercials and lots of them. Perhaps that equation will change in the future, but for now, mass marketing is where the money is for NBC. The Olympics offers one of last remaining programming assets to draw big numbers across all demo groups.
NBC made a correct decision to offer all of the coverage live via their many cable channels and the web/mobile app. Nothing else would have made sense given the real-time nature of media consumption today. However, given the business realities, they need to make a few compromises. The marquee events are shown on tape delay at night though many people already know the outcome. Additionally, to see the live streaming video (and on demand) you need to sign in with your subscription to your cable or satellite provider. According to Reuters, about 90% of Americans subscribe to either cable or satellite. The requirement seems reasonable, and the iPad App/web streaming worked great for me, though there have been complaints of spotty service. After using my DirecTV log-in, I was instantly browsing hours of events that were never broadcast over the air in the past. The videos are no frills, almost raw footage of low-profile sports like weightlifting, judo and badminton, among others. No announcers or commentary, just a feed.
The prime time shows are about storytelling and drama, not just results. So far, the ratings confirm the strategy – a record 40 million watched the opening ceremony on Friday and another record was broken on Saturday night to see events that were long over. Many people already know the outcome; often from NBC’s own Twitter account, as they can’t pretend the event didn’t happen. It is seems like a strange contradiction, but NBC needs to maintain authenticity, while promoting the evening’s programming. It can be clunky and awkward, but that is what happens when you are treading on new ground, and in some ways, making it up as they go along.
The Sunday night ratings were also up over 2008. In an era of media fragmentation, more people are watching the Olympics than ever before. I would surmise that all of the social media and streaming activity has increased overall interest. The raw results of who won/lost are becoming secondary. The story and the personalities are what draw in viewers. Social media enhances the storytelling and lets people interact with the athletes who all have twitter handles.
There could be a real opportunity to increase the use of streaming video via web/mobile devices for sports that don’t have big national broadcast deals. There are many Olympic sports that have a loyal but small following that could monetize online streaming video for their competitions. These sports could generate revenue from both subscriptions and sponsor dollars.
Additionally, the major sports may want to rethink their season long packages and supplement them with an iTunes approach and let viewers buy individual games a premium. And, they could also offer video from training camp or spring training. Over 12,000 fans showed up at the New England Patriots’ first few days of training camp on a weekday. How many more would have watch via online video?
Using online video via the web and mobile platforms he seemingly insatiable desire for sports broadcasting can be leveraged for incremental revenue for the major sports and provide a new venue for niche sports to get closer to their fan base.