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How Rio Ratings Surprised NBC and Will Impact Future Olympics

Heading into the Summer Olympics, NBCUniversal executives were bullish on ratings for Rio de Janeiro. With a host city just one hour ahead of the Eastern Time Zone and a mountain of data pointing toward heightened interest in the games, NBCU projected that Rio would outpace the 2012 London Games in viewership.

It did not. Instead of a bulletproof success story, Rio delivered a complex portrait of the rapid changes affecting the TV business and of a viewership still hungry for Olympics coverage, but also for new ways to consume it.

Over 15 days of competition, NBCU’s Olympics coverage averaged 27.5 million viewers across all platforms, including digital streaming — down 9% from 2012. But traditional TV ratings told a far grimmer story, one that began with Nielsen numbers that showed viewership for the Aug. 5 Opening Ceremony decline 28% from London.

“I woke up that first Saturday morning alarmed with the Opening Ceremony numbers,” NBC Sports chairman Mark Lazarus said. “But I had a belief that the competition, which is really the centerpiece of the games, would help us, and it did very quickly.”

Gold-medal performances from Simone Biles, Michael Phelps and Katie Ledecky helped lift ratings in the first week of competition. But the numbers continued to fall short of London levels and NBCU projections. The company had to provide additional inventory to advertisers toward the end of the games to make up for a shortfall in eyeballs. NBCU had, according to Lazarus, expected linear ratings to be “10 or 15 percent higher” than they were.

But there was upside in Rio.

“The growth of streaming, the rapidity of its growth, was a little bit surprising,” Lazarus said. “We knew it would grow. We planned on it growing. Between that and the number of people watching on connected TV devices, we have a lot to learn about consumer behavior.”

Ten percent of NBCU’s ad revenue for Rio came from digital. The company expects that portion to climb in future Olympics alongside digital viewership, which grew far more from London than the company expected. Rio was the third Olympics in which NBCU provided authenticated live streaming of all events. Viewers streamed more than 2.71 billion minutes of coverage from Rio, nearly double the combined number for the two previous Olympics.

And while NBC drew the now traditional gripes about particular broadcast production decisions, digital offerings — including the experience on X1, the tricked-out cable box and platform that NBCU parent Comcast scrambled to proliferate ahead of the games — earned strong reviews.

In 2014, NBCU paid $7.75 billion to lock up Olympics rights through 2032. It did so knowing that it had no way to predict what television viewing would look like by the contract’s end. But the pace of change has outstripped NBCU’s expectations. As it prepares for the 2018 Winter Olympics in PyeongChang and the 2020 Summer Games in Tokyo, NBCU needs to preserve the perception that the Olympics represent a singular opportunity for advertisers to transcend media fragmentation and reach the sort of massive audiences that television used to deliver nightly.

In September, NBCU researchers will present to company executives and the press a deep dive on data from Rio, revealing data that will inform how Olympics in PyeongChang, Tokyo and beyond are covered. Lazarus argues that the primetime Olympics broadcast is still “the biggest game in town” and will be for the foreseeable future. (NBC’s primetime viewership in the first 15 days of Rio exceeded ABC, CBS and Fox combined by 249%.) But already he and others inside NBCU are emphasizing the importance of platforms other than the traditional, Bob Costas-hosted primetime telecast on NBC.

“We produced these games for 2016, and the coverage needs to be filtered through that pretty basic prism,” said Olympics executive producer Jim Bell. That means taking into account across-the-board declines in linear television ratings and increases in digital viewing. Those trends have forced broadcasters in recent years to diversify their business models — focusing more on retaining stacking rights for original programming, providing easier access to live streaming, and even launching standalone subscription streaming services such as CBS All Access and NBCU’s SeeSo that offer exclusive original programming.

“The equation of a certain linear TV rating for a certain time of day is a little outdated,” Bell said. “If we hadn’t been on 11 linear channels and had massive digital distribution and had social engagement across the board and an app, people would be writing about that, saying we didn’t embrace the new world. So we embraced the new world.”

Bell pointed to NBC Sports’ partnership with Buzzfeed, which produced content for the company’s Snapchat Discover Olympics channel as a big risk that paid off in a big way. “That’s something that could have gone south but didn’t,” he said, adding praise for the product that Buzzfeed delivered. Rio was the first Olympics in which NBCU pushed highlights through social media. Rio reinforced the importance of continuing to try to innovate on new platforms as NBCU looks ahead to future Olympics.

“I do think the foundation of the house for the foreseeable future is primetime, but the good news is we’ve been able to build out all these wonderful platforms that are extremely robust,” Bell said. “I think the challenge moving forward, the opportunity for us is to say ‘How can we make the experience on a smartphone or a tablet or a smart TV as polished and as special as people have come to expect with primetime?'”

Standout Athletes of the 2016 Rio Olympics

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