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Olympic destinations - August 12, 2008

So what do we imagine other networks are thinking as they watch the apparent ratings bonanza NBC is enjoying from its coverage of the Olympics in Beijing? Some conclusions are obvious: Spectacle--if sufficiently spectacular--can still pull in a sizable primetime audience. Friday night's opening ceremonies drew 34.2 million viewers in the U.S., the most ever for an Olympics held outside the U.S. It also appears that you can have your cake and stream it, too. While NBC's primetime broadcasts are setting records, so too is NBCOlympics.com, which had served up 11.1 million discreet streams as of Monday afternoon. "The streaming will not diminish the ratings," sports-media consultant Neal Pilson, told the Wall Street Journal. "It encourages viewers and provides them with information. There will be no dilution or fragmentation of the national audience."

But NBC's Olympic experience could also lead the cynical network executive to less happy conclusions:

• First, keeping live footage of an event off the air and off the Internet--as NBC is doing with some marquee events it plans to broadcast on tape-delay during primetime--can, in fact, boost your primetime audience and protect your advertising revenue. It may seem like a counter-intuitive way to use the Web, but to a primetime executive with a revenue budget to hit, it's apt to look like a worthwhile strategy.

• Second, don't let your footage go viral. NBC has placed strict limits on how other news outlets, both online and broadcast, can use NBC-generated footage of the games. The network and the International Olympic Committee have also gone to extraordinary lengths to keep unauthorized live feeds--such as from foreign broadcasters--from being accessed from the U.S., fielding an army of lawyers armed with takedown notices for anyone trying to find a way around the geo-restrictions. According to this article on Wired News, P2P networks have been flooded with full-length footage from NBC, but mostly after the fact. In general, the network has done a pretty effective job of keeping unauthorized live footage off the Web in the U.S. The result has been record-setting traffic for the one, authorized destination site for Olympics footage, both live and on-demand, in the U.S: NBCOlympics.com.

• Given NBC's apparent success in protecting its primetime broadcasts, affiliates are likely to become even more hostile to network online strategies that threaten to undercut affiliates' ratings.

• Advertisers who pony up for live events could start to insist on the same sorts of extraordinary anti-viral efforts that appear to be working for NBC.

Far from easing the tension between the networks' traditional, affiliate-based advertising model and the emerging new online paradigm, in other words, NBC's success with the Olympics could actually exacerbate it. NBC's so-far successful balancing of its broadcast needs and online imperative has been achieved in large measure by keeping a tight leash on its Olympics footage.

That may work in this case, where viewer interest in the content is unusually high. But it may not be the best long-term strategy for developing the digital side of the business.
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