NBC’s Olympic challenge

NBC Universal’s online coverage of the Winter Olympics in Vancouver illustrates both the opportunity and the challenge that the Internet presents for traditional media companies. In addition to airing 835 hours of live and tape-delayed events, recaps and highlights on five broadcast and cable networks, the company is offering more than 400 hours of live video and more than 1,000 hours of full-event replays online. That’s a huge advance in volume from the previous Winter Olympics, but a sharp pullback from the breadth of online coverage of the Beijing Summer Games in 2008. Of the 15 sports contested in Vancouver, NBC is providing live streams on the Web of only two: hockey and curling.

FOR THE RECORD:
Vancouver: An editorial Feb. 16 about NBC Universal’s Olympic coverage said that the company would air 835 hours of video on broadcast and cable TV networks in addition to more than 400 hours of live coverage online. In fact, the 835 hours includes the live Web streams; the broadcast and cable networks will air only 435 hours of that total. —

It doesn’t have to be that way. The network’s cameras are ubiquitous on the Olympic grounds, and it could use the virtually unlimited capacity of the Net to provide blanket coverage. But NBC is holding back largely because it doesn’t want to cut into its prime-time audience. Like its broadcasting rivals, NBC Universal generates more advertising dollars from the people tuned to its TV networks than the ones watching on the Net. And its underlying assumption is that people who watch something on their office PC won’t watch it again on TV at home.

But in trying to guard against the erosion of their prime-time audience, networks may be doing themselves a disservice. For one thing, they miss the chance to reach new viewers who weren’t going to be tuning in on their TVs anyway. And so far, at least, the programmers who’ve been most aggressive online have seen their audience grow, not shrink, on TV. Experience shows that avid viewers online and on mobile networks are also avid viewers of prime-time TV.

Ultimately, networks and advertisers will have to find a way to segment the audience better or level the playing field, making viewers on the Web no less valuable than those tuned to conventional channels. One reason for the gap is that sites offering online video tend to show a fraction of the commercials that TV networks do, fearing that ads drive off viewers. But with a growing number of TVs able to tune in video from the Internet, the disparity is harder to justify. Networks could also give online viewers the option of watching a commercial-free version of an event for a fee.

Overall, NBC expects to pull in at least $250 million less from advertisers than it paid to air the Games, so its reluctance to take risks online is understandable. Yet the unusually strong appeal of events as big as the Olympics and the passion of their fans also offer networks a unique chance to experiment with ways to make their viewers on the Web as valuable as the ones they reach through broadcast and cable. The sooner they close the gap between the Web and TV, the fewer opportunities they’ll miss.