The Olympics just concluded and it was the topic of a lot of conversation. MediaPost’s Wayne Friedman has a recap of the eye-opening multi-platform stats here.
1. Network TV viewing is down: Much was made about the significant decline in NBC’s ratings from the London games of 2012. These games should have had better ratings because the Rio time zone meant more live events in prime time. The swimming and track & field events were live in prime time with the biggest American stars and yet the viewership was down. The fact is people, especially Gen Y and Z, are moving away from network TV for a variety of reasons. The games still crushed the opposition on other networks, but it is all relative. The move to streaming, on demand, TV apps and web viewing has taken a permanent and growing chunk out of the network’s audience.
2. We are heading to a streaming world: The network concept is outdated and irrelevant to today’s younger viewers. They want to watch on their schedule and on their device of choice. And, they are not interested in watching a block of generic commercials every 10 to 15 minutes. They will tolerate pre roll and other ventures such as product placement, sponsorships and native ads. However, they don’t want to deal with anything that ruins their experience.
3. Social is becoming the front door to everything: Younger consumers are now using social – Facebook, YouTube, Twitter, Instagram and Snapchat as their content aggregators. The number of viewers NBC drove through Snapchat in partnership with BuzzFeed is eye opening.
4. We live in a real time world: With so many people carrying smartphones with news and social apps, the idea of a tape-delay broadcast is archaic to say the least. Listening to NBC announcers try to add drama and suspense to prime time gymnastics was ridiculous. The event was over by 4 pm Eastern/1 pm Pacific and hundreds of media outlets reported the results, often though mobile notifications. Unfortunately for NBC, the next three Olympic games are all in Asia with major time differences. They are going to need a radical new approach for prime time and broadcasting the games in general. Pretending events are live may have worked in the ’70s and ’80s but the jig is up.
5. The business of TV ads is still strong: For all the talk of down ratings, NBC made a ton of money on ads — $1.2 billion. In fact, the need to pay for the U.S. rights drives much of their business decisions. In many respects, their primary customers are the paying advertisers, and the viewers are a secondary consideration. The extra inventory created by adding other NBCU networks, social and streaming made good money for parent company Comcast.
Sports still provides the best venue for advertising because people watch live and don’t usually skip the ads. The truth is, for certain categories TV is still the way to go for advertising. It works for industries like retail, auto, CPG, credit cards/banking, telecom and pharma where you need scale and mass audiences. You probably don’t need sophisticated data-driven digital campaigns to get people to show up at discount retail stores or buy detergent or try a free checking account.
In fact, P&G has found that they are better off advertising to mass audiences than micro-targeting audiences. And, for many companies, since they don’t sell online or direct, digital makes less sense. Think of pharmaceuticals and groceries. While print is in steep decline, the TV ad business is quite strong — for now.
And, there is the big risk for NBC since they have committed to rights fees through 2032. If viewers keep turning away from prime time, advertisers may balk at the prices or look elsewhere. NBC needs to rethink their entire approach for future Olympics. The days of Americans gravitating in great numbers to prime time network TV are dwindling.