NBC's Marathon Of Coverage
Sports fans, strap yourselves in for the telecast of a lifetime -- or, at least, the longest one. On Aug. 11, the Greece-U.S. women's soccer match will kick off the Summer Games in Athens. It will also mark the start of NBC Universal's (GE ) huge Olympics bet. The soccer game, airing on MSNBC, will be the first of an unprecedented 1,200 hours of coverage over 17 days, the longest continuous telecast of a sporting event in TV history. Spread over seven channels, NBC will offer more programming than the past five summer Olympics combined. And for the first time, all 28 Olympic sports will air on TV, even badminton and synchronized swimming.
Although a windfall for fans of such offbeat sports, not to mention insomniacs, the marathon coverage comes with big risks. Will the General Electric Co. (GE ) unit be able to make back the $793 million it spent for the U.S. rights to broadcast the Athens Games? Just as crucial, the Olympics coverage is serving as a sort of test bed for integrating NBC's broadcast and cable outlets with Universal's TV and movie businesses following their merger in a $14 billion deal in May. Indeed, a rationale for the deal was the opportunity it offered to provide programming and promote other shows across a swath of broadcast, cable, and even Internet platforms.
Yet in a media-saturated age in which sports scores are available at the click of a mouse and the 100-meter dash outlasts some attention spans, around-the-clock coverage could sorely challenge the sports-watching stamina of viewers. It could also threaten what has been the golden goose for NBC, the Games on prime time. Randy Falco, president of the NBC Universal Television Networks Group, insists viewers will want it all. "There will be an added excitement to the Games," he says, "because it will feel like they are ever-present." But TV consultant Jim Spence wonders where the tipping point is: "There's no way people are going to be able to watch all that" Olympics coverage.
With the flood of programming, how does NBC hope to turn a profit? Mostly the same way it always has: on sales of prime-time ads on the broadcast network, which have nearly sold out at about $730,000 per 30-second spot.
But selling the ad time is only half the battle -- NBC still has to deliver ratings. And the network faces a greater risk than ever of disappointing marketers. Splintered among seven different NBC Universal TV channels -- NBC, MSNBC, CNBC, USA Network, Bravo, Telemundo, and a high-definition channel -- the Olympic audience may no longer add up to the solid base advertisers value.
In 2000, in Sydney, ratings dropped well short of the 20 million prime-time viewers NBC had promised advertisers, forcing the network to provide free commercial time to compensate. Even so, Morgan Stanley (MWD ) estimates that NBC still managed a $50 million profit on the Sydney Games after spending $705 million on the rights. That's the best way to make GE brass happy, since the company has agreed to pay $7 billion for the right to broadcast the Olympics, starting in 1992 and stretching to 2012.
NBC will deliver more than just TV coverage, too, now that it can send live Internet feeds and Olympics results right to cell phones. NBCOlympics.com will provide up-to-the-minute television schedules, breaking news, instantaneous results, and video highlights. But that could be risky, as well, if all the advanced technology dampens the anticipation and surprise that attract viewers to the prime-time broadcasts. Still, Andy Donchin, a media buyer at Carat USA, has faith in the lure of the Olympics: "There is only a handful of true events out there that can draw big ratings." And if the grand experiment works, and Athens delivers profits to NBC Universal, you can bet there will be a few new team handball fans at corporate headquarters.
By Katie DeWitt in New York