The Olympics kicked off in London this week and created a new set of headaches for broadcasters as they attempt to save an antiquated business model. This week, we look at how they could do things differently if they understood the new media world they are dealing with.
From fumble to stumble
For large broadcasters, the Olympic games are generally a big win as it is the rare kind of events that can guarantee large audiences of viewers over a few weeks. Those viewers can then be resold at a premium to advertisers, bringing in major revenue to the channel which has won the war to get exclusive rights to carry broadcasting of the event.
This year, NBC (now owned by Comcast) was the channel to win the right to the London events. Having paid US$2.2 billion for the broadcast rights to both the Vancouver and London Olympics, the company is looking to it as a major revenue source and appears to be nearing its goal as advertising for the summer games has topped US$1 billion. And to show off its digital capabilities, NBC enlisted the help of social media darling Twitter to help it with its social media coverage.
It all seemed to go very well until the opening ceremony.
In an attempt to protect its existing model of selling TV space in prime-time, the company decided to record the opening ceremony instead of showing it live and then present an edited version of it in the evening. Unfortunately, they failed to realize that the internet is global and that a fair amount of Twitter users are in countries outside of the United States, countries which apparently had broadcasters who believe in showing live coverage when it happens instead of recording it and then claiming that they were live-covering the event.
This represented a couple of problem for NBC. For starter, much of the surprise that could be created around such event had been spoiled by individuals with mobile devices who watched the events a few hours before NBC broadcast them. Furthermore, because the channel looked to present the broadcast with a good amount of advertising, it decided to edit the ceremony, leaving out some critical memorial that led to outcries from US viewers. And if you missed it when it was broadcast, there was no way to see a replay unless you had set your DVR ahead of time: the online offerings only present a sub-set of clips, not pieced in a way to allows for a coherent narrative.
With the complaints around the opening ceremonies only a few hours fresh, NBC went for a double serving of clueleness when it decided to tape-delay the TV broadcast of a major swimming event, failing to make the first big sport news item of the competition an event people experienced on TV. By the time the company broadcast the event, the news had made the rounds on Twitter and Facebook, been talked about on news channels and news broadcast, and even ended up in newspapers. In other words, it had reached a level of news worthiness that may be expected from a weekly news magazine and a lag time that was previously unseen in the TV age.
So what could they have done differently? First, let’s look at what they did right.
The idea of a partnership with Twitter was a smart decision for the executives at NBC to make. However, the failure to understand that Twitter, like most social media companies, is something consumers experience in realtime presents some major challenges. Unless a company is willing to go all-in on live, trying to work in parallel with social media is not going to work.
Secondly, the company’s effort to make the events available on a variety of platforms is laudable. The fact that one can watch a swimming event on a mobile phone is absolutely brilliant until one realizes that a similar experience is not available to TV audiences. With non-stop coverage of the Olympics (it appears NBC has decided to rename itself “the Olympics channel” for the next few weeks), the channel needs to consider becoming more dynamic in its offering. With a large news organization at its back, it might want to take some of the lessons the NBC news and MSNBC have taken and leverage that to create a set of TV broadcasts which can shift to where the action is happening. This would force viewers to stay tuned just in case.
But what about primetime, you ask? Where would the surprise go? In the age of social media, the only members of the audience who, by the time a primetime tape-delayed broadcast is shown, don’t know the outcome are people who have worked very hard to avoid learning what that outcome is. They will continue to watch. The others will watch even if it’s already been shown once.
On the day AFTER a primetime broadcast of such event, the company should also make the events available online in a way that allows to redistribute them so people go to their offering instead of that of equivalent pirates.
Yes, piracy is going to be an issue for an event like the olympics and people who consume pirated content will not be swayed by a few takedown notices. However, people at NBC (and indeed, at any media company) should realize that the best way to fight piracy is to make the content available in a legal fashion. Most individual would willingly watch more ads of pay some small amount in order to get access to content. Piracy, these days, arises mostly as a way to feel a need that is not met in a traditional fashion (a good example of piracy today is the number of people discussing foreign country proxies online so they can get access to better coverage from NBC competitors.)
The bigger picture
Live events are the last thing that makes the traditional TV business model survive. In an age when a substantial content can legally be accessed online via either via subscription services (Netflix, Hulu, Amazon Prime) or on demand (Amazon video, iTunes, Vudu), live events are the only advantage traditional broadcasters still have. As a result, they are also an increasing part of what drives revenue to those broadcasters, either via licensing fees (channels like ESPN can commandeer ever larger sums of money from cable operators because they have access to large troves of live sports) or directly via advertising revenue (eg. the Superbowl, the Olympics).
But live is live.
The value of having access to a live event and leveraging that property in the broadcast world is a fleeting one. Tape-delays can no longer exist in the age of instant updating of information. I first became aware of this phenomenon during the 2010 soccer world cup. At the time, I was following the broadcast of games and keeping an eye on Twitter at the same time. Invariably, I would learn about a goal being scored a few seconds before I could witness it on the big screen: a small delay (maybe only a few seconds) existed in the TV broadcast but was enough to make information travel faster over social networks.
By failing to deliver live content in real time, NBC may be hastening the demise of the old TV business. If consumers come to realize, in greater numbers, that content is more available online than it is on TV, they will flock to the new medium at an even faster rate, leading to an acceleration in the decline of advertising on broadcast TV channels.
Going beyond live, there is also a tremendous value in completeness. NBC should look to how The Daily Show with Jon Stewart handles interviews that run long: the show provides extensive web-only content that is clearly part of a show that could not make it in the allotted broadcast time. NBC could, for example, present the complete opening ceremony (I understand it clocks in at about 4 hours) in a 5 hours long online broadcast, which would include an hour’s worth of ads (eg. 15 minutes per hour) without needing to cut anything out. Or it could offer the same show for a few dollars via an existing pay per view online channel.
Either way, it would increase the viewership and generate more revenue for the company. And who could possibly be against that?