The Olympics which kick off Friday are bringing in over $1 billion in revenue to NBC Universal, by some measures itself justifying GE'sownership of the division).
But the Olympics are far more than just a boost for NBC Universal, they're also an unprecedented experiment with online content distribution, bound to transform the way media companies distribute their content.
Today NBC Universal CEO Jeff Zucker sent an internal company-wide email calling the Olympics "the most ambitious broadcasting event ever attempted." It's huge. The company is presenting 3,600 hours of coverage, which Zucker says is more than the combined total of every Summer Olympics ever televised in the US.
Perhaps most importantly in terms of the way the Olympics will change the media landscape, 2,200 hours will be streamed LIVE on the internet. Just two years ago the Olympics made just one hockey game available live online, so think about how far consumers have come in getting control over when, where, and what they watch. Here's what really surprises me: while all this content will be distributed online along with ads, potentially stealing eyeballs from TV broadcasts, it hasn't hurt advertising prices at all. TV commercial ad prices are continuing to rise consistently, with a 30 second spot going for $750,000 this year.
To measure exacly how many people are watching on all its platforms NBC has created a new metric, the "Total Audience Measurement Index," or "TAMI," which combines research from Nielsen, Omniture, Rentrak and other measurement systems. With this data it'll be able to tell advertisers exactly how many viewers or users are watching Olympic coverage, on mobile, cable, online, and broadcast TV. With advertisers demanding more information about measurability and targetability to justify return on investment, I'm guessing that metrics like TAMI will become a must-have.
Then there's the new technology the Olympics are encouraging. People using Microsoft'sVista operating system on their computers can subscribe to events via a service from a company called TV tonic. IF you leave your TV on overnight everything will be downloaded to your desktop by morning. Now Vista has gotten a bad rap for a lot of reasons, but if you've got it, this sounds pretty cool.
One nice benefit for NBC: it's using access to the 200 million people watching Olympics coverage to promote its new fall lineup, which could give it a big advantage in attracting viewers. And if people tune into NBC's cable networks like Oxygen to watch specific sporting events, the channels may end up attracting some new viewers.
If viewership on the web is huge, and if it doesn't cannibalize broadcast ratings I think the entire media industry will take note. That would prove that it simply generates more revenue to persue aggressive online distribution. So we shall see.
