To Win Olympics, NBCU Must Lure Big Crowds — and Small Streamers

Analysis: NBCUniversal and parent Comcast can’t afford to ignore any screen in their efforts to profit off of the PyeongChang Winter Olympics

PyeongChang Winter Olympics
The Yomiuri Shimbun via AP Images

Whenever NBCUniversal broadcasts an Olympics, the massive media company is eager to make a big splash. To succeed, however, executives must increasingly sweat the small stuff.

Yes, NBC has lined up Katie Couric to co-anchor the usual colorful primetime broadcast of the Opening Ceremonies from PyeongChang, South Korea, on February 9th. But the company will also stream the inspirational gathering live, so tech-savvy consumers who don’t want to wait until big-viewing TV hours can watch an unfiltered feed of the event earlier in the day. Yes, NBCUniversal’s various outlets will broadcast more than 2,400 hours of skiing, figure skating, snowboarding – and analysis of same. But the company will show the bulk of it – 1,800-plus hours – on NBCOlympics.com and its NBCSports app, compared with 631.5 hours on linear TV networks like NBC, NBCSN, USA and CNBC.

“We expect that this will be the most-consumed Games across all platforms,” said Mark Lazarus, chairman of NBC Broadcasting and Sports, speaking to reporters Wednesday at a company event held to preview coverage. Even so, he added, NBCU is ready for a repeat of a trend that took place during its 2016 coverage of the Summer Olympics in Rio.

Overall linear-TV viewership was off 18% from its 2012 broadcast of the Summer Games from London. NBCU was able to meet advertiser guarantees by granting sponsors extra commercial time, and came away from Rio with more than $1.2 billion in ad sales – and approximately $250 million in profit.

Even in the era of the DVR, traditional couch potatoes largely continue to watch live sports as they have for decades. But as a generation of new spuds makes its screen habits known, even NFL football and the Olympics aren’t immune from viewers making their way from the living-room TV set to the smartphone or mobile tablet. A regular-season NFL game’s average audience fell 9.7% to 14,9 million viewers this season, according to Nielsen. That compares with an average audience of 16.5 million viewers per regular-season game in 2016. Viewership fell 8% last year.

Consumers still like live sports – and so too does Madison Avenue. Despite viewer erosion, the live games bring TV’s biggest audiences. NBCU will do its part to capture such a crowd by broadcasting the Winter Olympics live across the country for the first time – meaning Los Angeles viewers won’t have to wait to see what New York counterparts are enjoying.

And recent world events have given NBCU hope that a broader audience will tune in. North Korea and South Korea have decided to field a joint Olympic team, a “de-escalation” that “has been most welcome, both by the world and our employees,” said Jim Bell, president of production and programming for NBC Olympics. Bell has had to contend with logistical threats  in the past – hints of terrorism in London in 2012, an outbreak of the Zika virus in Rio in 2016 – but a Winter Games taking place near North Korea had cast a potential shadow over the proceedings.  Seeing athletes like Lindsey Vonn and Shaun White is also no small enticement.

NBCU has already said it expects to generate an ad-revenue increase in the “low double digits” percentage range above the approximately $800 million it secured from its coverage of the Sochi Winter Olympics in 2014. That means the company could be looking at more than $900 million in national ad sales alone.

To fully monetize an Olympics, however, NBCUniversal can’t afford to leave any screen unturned. The company made use of Snapchat when it broadcast from Rio, but it is expanding its efforts for PyeongChang. The quick-share media outlet will feature “Pipe Dreams,” which follows four aspiring Olympic snowboarders, as well as “Chasing Gold,” a series that repurposes many of the Olympic athlete profiles NBC airs during primetime coverage, for the Snap audience.

There’s reason to mine new venues. NBCU found that Snapchat users consumed 230 million minutes of content related to the 2016 Rio Olympics. Nearly 35 million Snapchat users took in Olympics coverage in the U.S., and the majority were under 35 years of age.

With overall TV ratings in flux, NBCUniversal will talk to advertisers in a way that tries to make sense of the new math of accumulating audiences. The company is guaranteeing clients a “total” viewership across broadcast, cable and digital.  Lazarus, the NBCU executive, said the numbers the company releases won’t be able to include so-called “out of home” viewership, which Nielsen can’t provide on a day-after basis, but he expects them to give clients a better picture of who is watching the game, and even how. He declined to talk about specific guarantees to various clients.

Even NBCU’s parent company is getting in on the Games. Comcast and NBCU are in the midst of a $4.4 billion rights deal that lets them cover the Olympics in the U.S. through 2020, and have already agreed to pay $7.75 billion for broadcast rights to the Olympic Games between 2021 and 2032.

During the Wednesday event, Comcast CEO Brian Roberts took to the stage to demonstrate how the company’s cable subscribers could use voice commands to seek out video clips of their favorite athletes or sports as the Olympics plays out. The Olympics, said Roberts, are “our laboratory.” No doubt, Comcast and NBCU hope the larger experiment is successful.