The Big Bet: NBC Thinks More Digital Coverage Means Better Olympics Ratings

What's This?

Jonathan Kuck of the U.S. practices during a test race at Adler Arena Skating Center at the 2014 Winter Olympics, Monday, Feb. 3, 2014, in Sochi, Russia. NBC will live stream speed skating and every other event online.

Image: Peter Dejong/Associated Press

By Jason Abbruzzese2014-02-05 13:03:40 UTC

NBC’s last Olympics was either a rousing success or a spectacular failure, depending on who you ask.

The failures, as some called aspects of the coverage, were painstakingly documented in the #NBCFail hashtag that served as a sounding board for complaints about the tape-delayed coverage of the opening ceremony and some of the most anticipated events, in addition to spoiling the Michael Phelps/Ryan Lochte showdown.

The success made a smaller splash on social media but a bigger impact on NBC's bottom line - record setting viewership helped the broadcaster turn an unexpected profit on the Summer games.

Two years later, NBC is set to change little about its Olympics coverage. For the 2014 Sochi Winter Olympics, the opening ceremony will air eight-and-a-half hours after it actually happens; primetime coverage will be a melange of taped coverage of the most popular events; online users will need to authenticate their cable subscriptions to gain access to live streaming of the events.

NBC has a good reason for changing so little; 219 million people tuned into the 2012 Summer Olympics in London, making it “the most-watched television event in U.S. history,” according to the broadcaster.

The few changes NBC has made represent an important call on the intersection of traditional and digital media — namely that more is more.

"What we found in London was that the people who were live-streaming Olympic content during the day on a PC or laptop or a tablet were actually more likely to watch more Olympic television than people who weren’t live-streaming or engaged in some form of other kind of contact with the Olympics," said Jim Bell, NBC Olympics executive producer, in a recent conference call.

That revelation has led NBC to double down on its digital investments in an effort to follow a simple rule - the more Olympics you give people, the more they want.

Streaming Hits the Mainstream

Much of the criticism of NBC from the London games touched on tape delay and other aspects outside of the digital side, but not all of it fell on deaf ears.

“We got through London and we learned some things,” said Rick Cordella, senior vice president and general manager of digital media for NBC Sports Group, during an interview at the new NBC Sports headquarters in Stamford, Conn.

Cordella heads ups the live streaming operation for NBC, including the Olympics. A former college basketball player, he has overseen some of the biggest changes from the 2012 Olympics and almost certainly from the 2010 Vancouver Winter Olympics, when NBC only streamed 400 hours of ice hockey and curling.

This year, NBC will stream all Olympic events live for a total of around 1,000 hours of coverage. Digital coverage is selling more ads, but it has also correlated with a more important trend — a rise in overall viewership.

As NBC’s live streaming has picked up, so have critics of the coverage schedule. Cordella, and more broadly NBC, has control over only so much. But he watched the social media discussion himself. Some of it was noise; some of it reasonable and insightful.

“From that, we kind of reacted to it. We completely redesigned the website from start to finish. We said ‘what should a website in 2014 look like?’ And if you visit it, you’ll see that it’s more of a feed-driven mentality,” he said.

Walking through the halls of the 300,000-square foot, former shampoo factory turned NBC Sports headquarters, Cordella highlighted the numerous areas that have been dedicated to digital content.

Sochi will be the first Olympics for the 33-acre campus in Stamford, Conn., which includes a dedicated studio as well as what he called “the highlight factory,’ a room full of computers that will be humming at all hours to splice clips for online consumption. A similar area is dedicated to online ad insertion.

A view from the outside of the NBC Sports headquarters. The 30,000 foot building is just a year old and gearing up for its first Olympics.

That influx of capital is needed for an area that is becoming increasingly relied upon by content consumers and advertisers. Previously, selling digital ad space of the Olympics was difficult, Cordella said.

“[In Beijing] it was hard to get advertisers to buy into a digital website. You had to leverage TV assets in order to do it,” he said. “As you move forward now, it’s a bigger piece of the media pie.”

The size of that pie is very important to NBC. The broadcaster claimed a loss on the Beijing Olympics and a slight profit in London.

A recent report estimates NBC revenue from Sochi around $1.05 billion. Digital ad sales have accounted for $50 million, or around 5%. Television ads remain the primary source of revenue, but with digital consumption leading the trend of overall viewership, the additional revenue is a cherry on top of its growing Olympic pie.

Going for the Gold (Zone)

NBC is plenty experienced in streaming sports, with ice hockey, English football and golf among its properties.

The Olympics, however, is its own type of sporting event, Cordella said.

“We prepare as best we possibly can for the Olymipcs,” he said. “But the olympics are a unique event.”

Not content just to air all the events, NBC is rolling out specialty streams to help highlight aspects of the games.

“What we wanted to do was basically be able to shout from the mountain tops what is important right now,” he said.

Among the few new offerings is an NFL-inspired channel that will operate like a real-time highlights package.

“Gold Zone” rapidly shifts between sports in an effort to provide viewers with coverage of the most pressing live events. The show will be hosted by Ryan Burr and Andrew Siciliano, the latter of which hosts NFL Sunday Ticket Fed Zone on DirecTV. Cordella has previously acknowledged that Gold Zone had been heavily influenced by similar NFL shows.

Another speciality streaming show, “Olympic Ice,” will focus on figure skating, traditionally one of the most popular winter Olympics events.

Cordella stressed that while NBC has invested heavily in digital content, consumer pressure would continue to be an issue.

“The expectations of streaming are getting higher and higher,” he said. “The Olympics bring in a broader audience and they’re doing all this for the first time, so their expectations start with ‘this should be tv quality.’”

Cordella added that the evolving platforms on which they need to offer content - tablets, smartphones, Android and iOS operating systems - force almost constant adaptation.

“It would be great at some point 20 years from now, maybe to sit back and say ‘wow, we’ve done everything now and the technology didn’t change in the last four years and everybody’s using the same devices on the same platforms.’ But even iOS gets better,” he said.

Topics: Business, live streaming, Media, NBC, nbc olympics, Sports, Winter Olympics 2014