It Was Gold For Sports And News Was Out Of The Running

Philip M. Stone August 26, 2008

The really big players won gold at the Beijing Olympics -- NBC made a decent profit which means the International Olympic Committee (IOC) will do even better for future TV rights and China’s $43 billion investment wooed the world with an “exceptional” show.

Can London compete with Beijing

It wasn’t about Tibet, it wasn’t about lack of press freedom, it wasn’t even about a few foreigners thrown in jail or deported for unfurling unfriendly banners –it was all about sports for the vast majority of the world’s media.

If ever an opening ceremony did its intended job this one was it – so plush, so elaborate, so positive China in your face, that the word of mouth quickly spread that these were the Games to watch, no matter the politics, no matter what time of day or night.

The world’s media has shown many-a-time that opportunities to knock Olympic organizers should never be lost – remember in the 1996 Atlanta Games in the early days there were almost as many stories about competition bus drivers continually getting lost, not getting to events on time, than there was sports coverage -- so China was an obvious target what with Tibet et al. But when it came right down to it these Olympics stayed about sports, and its great champions.

And those champions were not just on the playing fields. Let no one forget that how goes the American NBC at the Olympic Games so goes the Olympic movement. World television rights for the Beijing Games went for around $1.7 billion and slightly more than half of that came from just NBC. The network is said to have cleared more than $1 billion in advertising, but total profit won’t be known until all the expense accounts are in.

NBC won big gold via higher ratings than Athens four years ago; it proved even with far more web streaming that TV still wins out big; and most important of all it proved a very close IOC working relationship pays big dividends because the IOC knows only too well  it is in their best interests that NBC does well. So the IOC accepted, for instance,  NBC’s suggestion the Games be moved to early August from September so there could be maximum US viewership with no football competition; and it rearranged the swimming and gymnastics competition schedules so they could be shown live in US prime time. Having a fella’ named Phelps around was an added bonus -- the icing, marzipan and anything else you can think of on the cake.  

Much of this success must be credited to Dick Ebersol, NBC Sports President, who surely, in the Olympic spirit, must be known now around NBC as Midas!  He certainly had the touch in making NBC’s coverage profitable. Viewers can argue about the rights and wrongs of tape delay but the bottom line in all this is how goes NBC so goes the Olympics.

Globally, TV seemed to do pretty well, too, with total viewership up.  "I can tell you that generally ratings are higher than for any Olympic Games before," Timo Lumme, IOC director of television and marketing services, told a news conference (but don’t forget there are a lot of Chinese!).

And it seems NBC may not have been the only network to have done well. Take China TV, for instance. It paid around $17 million for exclusive TV rights for the world’s most populous country – how did the IOC let them get away with that? It is said China TV sold some $400 million in advertising and nearly the entire population at one time or another tuned in.  Lumme says China will have to pay far more next time around. “It’s important that we get a fair contribution from China for the Games."

The European Broadcast Union on behalf of Europe’s broadcasters paid about half of what NBC paid. Ratings were down somewhat from Athens because most Beijing events occurred from about 3 a.m. to 6 p.m. Central European Time. So prime time was devoted to Olympic highlight shows but there were no tape delays. Another reason for lower ratings is that while for NBC August was the best month to show the Games, in Europe it was the worst month, it is the prime vacation month. Even so, for those left behind the Opening Ceremonies and some of the more prominent events closed in on 40 – 50% shares.

By and large broadcasters globally discovered that delivering hundreds more hours of Olympics footage via video streaming and mobile services did not eat into television viewership. It seems TV is far, far preferred at home, but if out of the home, like at work, then you use what you can. "People overall are consuming more media," Lumme said.

Press freedom groups no doubt must be really disappointed at the lack of interest by the world’s media in covering the human rights story, but then where were these groups?  At ftm we received not one China press freedom complaint during the Games from the usual cast. Everyone on holiday?

NBC transported the NBC News with Brian Williams to Beijing and the Washington Post severely criticized the network’s news coverage, saying many of its China news stories were too soft. That prompted a NBC counter-attack that, no, it had done the hard stories, too, with each side listing specifics.

Even though ftm is based in Switzerland NBC News With Brian Williams is no stranger – CNBC Europe broadcasts it live daily at 0030 CET, but during the Olympics it did not, instead showing Conon O’Brien. The reason no doubt had to do with broadcasting rights to Olympic footage – NBC has exclusive Olympic rights for the US, but this was a US show being shown live in Europe where the EBU held Olympic rights so instead of putting up a “technical rights issue” screen for much of the broadcast the program just disappeared for these past two weeks, so we’re unable to say whether NBC or the Post had it right. The Beijing-produced news program, incidentally, did exceptionally well in the US ratings which are usually a close three-horse race and NBC no doubt will be looking for the show to retain that glue on its New York return.

NBC’s Olympic success did not go unnoticed by its competitors, particularly the Disney-owned ESPN that is making all sorts of noises about bidding for the Games after  2012. (NBC already has London). And ESPN says it is not into tape delay.  ABC,  also with a proud Olympics heritage, and CBS, to a lesser degree, might be tempted, too, but assuming NBC stays within the General Electric family – and the noises now coming from GE say it certainly remains – then that gives NBC the edge because of the combined GE international Olympic sponsorship, too.

One question that the Beijing ceremonies prompt is how can London possibly compete with that Chinese grandeur. London’s budget is less than half the $43 billion China threw at the Games, and it’s doubtful the British Army will hand over so many personnel as the People’s Army did to perform in so many various acts during the opening and closing ceremonies. The best approach is probably to give up that ghost and not even try to compete with such lavishness – indeed it is generally thought the Beijing Games will be the last for such ostentatiousness.  

And a sign of that came in London’s eight-minute hand-over musical presentation during the closing ceremonies.  China had so spoiled the world that the London presentation was close to embarrassing. One London bus – even with a convertible roof --  just didn’t do it. Fifty London buses, now maybe!  Led Zeppelin guitarist Jimmy Page, singer Leona Lewis, and football star David Beckham kicking one football paled in comparison to not only this closing ceremony but also the show the Chinese gave four years ago during  the Athens hand-over ceremony. London organizers must surely hope that Beijing memories fade in four years time. 

The London Olympics if anything will be even more difficult Games for NBC prime time scheduling than Beijing. London is five hours ahead of New York so if Phelps shows up again as he says he will and NBC wants to show all of that live it means holding swimming at around 1 a.m. or so London time. Phelps had said that rearranging events for early morning, as NBC got for Beijing, really made no difference to competitive ability because swimmers are used to getting up early for training, but to compete at 1 a.m. or a bit later could well be something else. The  IOC, while always wanting to accommodate NBC, says it won’t do anything to lessen competitive performance.

NBC will be spending the next weeks studying carefully all of the statistics from these Games. How streaming went from both an advertising and a viewership basis – already there are reports it should have done much better financially from its Internet activities than it did and that needs much more marketing effort -- how live coverage on its various cable networks performed; how all of this may have affected prime-time viewership (early results show the vast majority people watched TV, not the Internet).

Can the network open up more live coverage? In our digital world four years is a very long time; NBC’s Beijing live coverage far exceeded what it permitted four years earlier from Athens, so who knows what London will produce.

As ftm has pointed out many times, the Olympics are very much a business.The IOC’s Lumme says that globally  the IOC earned a combined $2.6 billion for  the Turin Winter Games two years ago and Beijing this summer, while the rights  for the Vancouver  2010 winter games and the 2012 London games "will be around $3.8 or $3.9 billion."

NBC is by far the Olympics’ largest financial broadcast player. It was good for sports, and good for NBC that these Games were such a success.