NBC to boost online Olympics coverage
Published: Wednesday, May 23, 2012
Updated: Wednesday, May 23, 2012 14:05
BOSTON — Recognizing that many viewers want to watch key events live, in prime time, rather than tape-delayed, NBCUniversal plans to bolster its coverage of the Summer Olympics in London in August by putting 3,000 hours of programming online.
The company, which is paying a record $1.18 billion for the rights to broadcast the London Olympics, is challenged to keep the up with the times. The long time-zone difference between Britain and the United States means that key events will be broadcast when most Americans are not in front of their TVs. And increasingly, consumers are watching programming online, prompting NBC to make changes to its playbook.
On Tuesday, the company trumpeted its marketing campaign to make consumers who subscribe to cable or satellite television aware that the bulk of the London Games can be watched online at no additional charge.
“There will be a barrage of information sent out to the American public about how one can access this content,” Gary Zenkel, president of NBC Olympics, said Tuesday during a panel session at the National Cable & Telecommunications Assn. annual convention in Boston.
Comcast Corp., which owns a majority interest in NBCUniversal, is already planning to carry daytime Olympics coverage not only on the NBC broadcast network in prime time, but also on most of its cable outlets — including its new NBC Sports Network and its news channels CNBC and MSNBC.
The strategy underscores Comcast’s commitment to the media industry’s TV Everywhere initiative, which allows subscribers of Time Warner Cable and Comcast cable, among others, to access programming on computers, phones and tablets as long as they demonstrate that they are paying customers. NBC wants to make sure that consumers realize their cable subscription also gives them access to the Games online.
NBC has even recruited its late-night host Carson Daly to make promotional spots to educate viewers about TV Everywhere.
Not all cable companies have been as aggressive as network television programmers would like in marketing the TV Everywhere feature to their subscribers. NBC’s Zenkel is hoping that the Olympics will provide a motivation for distributors to hype TV Everywhere.
“It will require a lot of consumer education,” Zenkel said, adding that NBC is working with distributors on creating marketing messages that can be deployed on a national and local basis. The network will also use social networking platforms to alert viewers about online viewing options for the Olympics.
NBC’s push to put more content online — more than 3,000 hours from the London Olympics this summer — contradicts the previous school of thought at the network, which once feared that such a move might hurt the prime-time audience.
Zenkel subscribes to the opposite theory and believes that the more content that is available online, the better the promotion and potential for a bigger audience in prime time.
“We will hold nothing back,” Zenkel said. “Live streaming does not cannibalize the prime-time audience.”
NBC is betting that the Olympics will be viable in the future, making the online strategy key.
The company expects to lose money on its $1.18-billion investment for the rights to the London Games, Zenkel said. NBC lost $223 million on the 2010 Winter Games in Vancouver — an embarrassment for previous owner General Electric, which now owns a minority stake in NBCUniversal.
Despite the 2010 loss and the anticipated red ink this summer, Comcast executives last June struck a deal for the rights to the Olympics through 2020 at a price of $4.3 billion, easily outbidding Walt Disney Co.’s ESPN and News Corp.’s Fox.
Zenkel noted that the London deal was done when NBC was still controlled by General Electric Co. and that new owner Comcast believes the Olympics will become profitable for NBC after the 2012 Games.
Notably, NBC under GE derived revenue from ad sales and cable subscriptions. But Comcast’s core business is selling bundles of TV channels and high-speed Internet service, underscoring why the company is eager to keep people watching online as well as watching NBC.