February 23

Sochi games will comfortably turn a profit for NBC

NBC used the Olympics to popularize streaming video, develop a cable sports network and launch entertainment programs.

By David Bauder
The Associated Press

NBC Universal’s Sochi performance is partly measured in gold, too.

click image to enlarge

NBC’s prime-time viewership averaged 22.1 million people through Friday at the Sochi games. Although fading at the end, that number should still land between the 2010 Vancouver games (24.4 million), which had the advantage of live prime-time events, and the 2006 Olympics in Turin, Italy (20.2 million).

The Associated Press

Televising the Olympics is a complex, multi-million dollar business venture that seems to have more riding on it every two years. Beyond attracting millions of people to the broadcast network each night, NBC used the Sochi games to popularize streaming video, develop a cable sports network and launch entertainment programs.

NBC was able to concentrate on these goals largely because pre-Olympic worries about terrorism, security and the safety of people uncomfortable with Russia’s gay rights laws faded when competition began.

“If I’m NBC, and I’m looking at the biggest crisis being Bob Costas’ eyes, I think it’s been a success,” said Andrew Billings, a sports media professor at the University of Alabama and author of “Olympic Media: Inside the Biggest Show on Television.”

Here’s a look at some of those moving parts:

RATINGS

NBC’s prime-time viewership averaged 22.1 million people through Friday. Although fading at the end, that number should still land between the 2010 Vancouver games (24.4 million), which had the advantage of live prime-time events, and the 2006 Olympics in Turin, Italy (20.2 million).

The games are increasingly shutting off competition: 15 rivals’ programs, including “Grey’s Anatomy,” “American Idol” and “Dancing With the Stars,” had higher ratings while competing against the Olympics in 2006, the Nielsen company said. Four years ago, three programs (all “American Idol”) beat the games. This year there were none.

“This is the most dominant Olympics in prime-time ever,” said Jim Bell, executive producer of the Olympics for NBC. “That’s a pretty big deal and a pretty big statement to make, given some of the decisions we made that were not easy ones.”

Internally, the most debated move was showing figure skating – the most popular sport in the winter games – live on cable’s NBC Sports Network during the day and repackaging the routines at night. That didn’t appear to siphon viewers from prime-time, as some feared. The final night of women’s figure skating had subpar ratings, but that was likely due to the gold medal fight being between a Russian and South Korean, with no American involved.

And the daytime program launched Johnny Weir and Tara Lipinski, NBC’s breakout personalities in Sochi.

REVENUES

More importantly for NBC’s parent Comcast Corp., the company said the Sochi games will comfortably turn a profit. The company paid $775 million for the rights to the games, with expenses in the $100 million range. At the games’ outset, NBC said national ad sales had already exceeded $800 million, and more money was pouring in.

Vancouver may have gotten higher ratings, but NBC lost more than $200 million on them – a combination of a weaker ad market and too much paid for the rights. The expansion of online offerings now gives NBC more space for ads, too.

AGING AUDIENCE

One concern for the future is the Olympics’ aging audience, a disturbing trend for advertisers. The median age of the Olympic viewer increased from 50.9 in 2006 to 55.1 this year, despite the addition of snowboard and halfpipe events designed to appeal to young people.

“We grew up at a time when the Olympics were big ideological events,” said Brad Adgate, an analyst for Horizon Media, “and I don’t think that’s the case anymore.”

STREAMING

The network streamed all Sochi competition live, more than 1,000 hours compared to three hours in Turin. Some fans were annoyed by a requirement to prove they have cable or satellite subscriptions to watch online, which was the condition providers set to allow NBC to do it. A record was set for most-streamed event three days in a row, topped with 2.1 million streams for the U.S.-Canada men’s hockey semifinal.

(Continued on page 2)

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