Tuesday, September 9, 2008

Olympics - a good business for NBC?

NBC had bought exclusive video rights  for the Beijing games for a  whopping $900M. The monetization avenues were, largely, through TV advertising but there were also some attempts to generate revenue through online video distribution and banner ads on its web sites. For an event that lasted for 16 days that is lot of revenue to be generated to break-even.  But NBC did make $1B in revenues from the exclusive distribution of the Olympics through TV. Its online revenues were though were underwhelming - video advertising revenue amounted to around $6 M and banner advertising amounted to around $12M more. 

The question to be asked is if $100 + M revenue (gross minus paying for the rights) is a good enough return. There would have been a siginificant cost of distraction from regular  programming that NBC would have faced in preparation and winding down from the Olympic fever. There must have been an expectation that benefits from Olympic viewership will outlast the event itself.  

I also tried to watch Olympics on the internet and I must say that the coverage was below par and not engaging enough.  The only reason I went there was to actually see Indian boxers who were doing well in the olympics but were not, for obvious reasons, covered on the TV here in the US. Clearly, the quality of coverage on the internet is deliberately kept way below par to ensure that television is not cannibalized.  I think the the event sponsors should sell internet rights to a separate entity that has no traditional media interests to maximize on the potential of internet viewership.  

1 comment:

rajeev kapoor said...

All feeds from all sites should have been made available to choose from. Even satellite TV, which claims to be interactive failed on this front esp in India. I am fond of diving, but never got a chance to watch it because of my work hours!