The Olympic Race Between Online Streaming and Broadcast: What NBC Got Right [UPDATED]

The Olympic Race Between Online Streaming and Broadcast: What NBC Got RightThere’s a hush in the arena as the competitors take their position at the line, they crouch into their starting stance, eyes focused on the ground in front of them. For an instant, everything is still. Many paces away, the only movement is the flutter of tape across the finish line. The countdown ticks down to zero, and someone presses ‘Play’.

The great race between online video and broadcast video has begun.

The 2012 Olympic Games being held in London will be the first games available on broadcast channels and streamed online in the US. In fact, while the numbers show that NBC’s Olympic broadcast coverage is at a record high, its live online streaming package may be reaching a far more engaged audience.

Now, there is a big difference between the network’s streaming coverage and the broadcasts. Olympic event streaming requires a US user to authenticate that they have an account with Comcast, NBC’s owner. But the streaming is live, and one can watch several events at once, provided they have bandwidth. You can imagine the challenge here. The City of Los Angeles has asked workers to stop streaming the games at work. Further, NBC may release streaming numbers today.

On broadcast television the story is a little different. NBC has chosen to consolidate coverage in its most lucrative prime-time slot, and intersperse it with the human interest stories, interviews, and of course ad spots, while limiting event coverage to highlights that happened earlier in the day. Yes, this has ticked a lot of people off, but the network’s plan appears to be working; NBC’s exclusive deal cost $1.2 Billion, yet despite complaints from Olympics fans using social media, they predict to break even due to soaring ratings.

It is arguable that the high broadcast ratings are due to this consolidation in the prime-time hours. It is also arguable that the streaming live events has helped increase broadcast coverage instead of cannibalizing ratings. You can watch a race at work, see the recap at home, and see plenty of ads in both places. Maybe NBC didn’t get its Olympics coverage wrong at all, and in fact nailed it.

What has NBC done right?

  • Segmentation – NBC has deftly optimized its programming for online and broadcast, using the interactive potential of online streaming to its fullest, while creating the ‘put-your-feet-up’ experience for those watching at home. This recognizes the differences in behavior between an avid fan who will waste his boss’ time and bandwidth to watch people run, and a somewhat-interested viewer who just likes that cute Matt Lauer guy.
  • Synergy – at all points where NBC touches its marketplace, through its cable and broadcast channels, its daily programs, its affiliates, traditional advertising, online banners, websites, and social media, the network has driven traffic to the quickest, easiest place where viewers can watch (provided they have that Comcast cable account, of course).
  • Interactivity – NBC offers a complete Olympic event schedule online where you can watch or get an alert to live event coverage. Within the viewer, you can also tweet or share what you are watching using social media, see everyone else’s comments, and of course watch replays and control the playback yourself. There are also apps for your tablet or smartphone.
  • Control – Like it or not, NBC has a lot of money riding on its ability to control the message. Because it has exclusive coverage rights in the US, the network had to figure out the best way to give people tiny little windows into different parts of the Olympic experience, rather than try to cover the games the same way everywhere. The likely outcome would be that nobody trying to watch the games would be able to find what they were looking for. NBC’s tightly segmented control over its programming might seem Orwellian, but it is also an impressive feat for any organization to pull off.

I would be remiss if I didn’t mention the popular Twitter hashtag #NBCfail. NBC made a few missteps by trying to respond to this phenomenon, but in general I think the people complaining about NBC’s coverage aren’t seeing the forest for the trees. The action today occurs online, and NBC understands that. Broadcast television is for passive viewing, and perhaps always will be, while a ‘second-screen’ has become popular for online browsing, sharing, and interactive viewing.

The lessons from NBC’s coverage of the Olympics are clear: Broadcast is still big, but fills a narrowing niche for a vast audience. For true interactivity and real-time viewing, online streaming is the winner in the long run.

[UPDATE: The streaming numbers were released on Aug 2, and the results are staggering: NBC reports that 64 million total video streams have been served across all digital platforms, including mobile.]

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