By PHILIP M. STONE
Europeans enjoyed live coverage from the Olympic Games morning, noon and
night. No waiting for prime time to see Europe's top athletes win
their Gold medals -- a far cry from watching the Games in the US where
NBC made viewers wait until prime time to see the best.
If ever there was a case to show US television is a business (as opposed
to a service) you just have to remember that by the time Athens ended NBC
saw little change from $1 billion for the coverage rights
plus all the additional production costs. As a business it had to make
that money back plus a profit. It follows a sales and marketing
strategy, long proven fruitful, that nothing gets shown until prime time
along with a flow of very expensive advertising, each costing well into
six figures. NBC made a profit out of its $1 billion investment!
A few years ago, before the 2000 Sydney Olympics, I attended a
conference sponsored by the International Olympic Committee in which the
major discussion was about rights to live Olympic coverage on the
Internet, mobile phones and the like. The point made time and time again
was that when you have NBC paying the type of money it does for the
Games, then NBC deserves as much exclusivity as it can get.
Can Enough US Viewers Watch Early in the Morning?
It was during the Q and A session that I asked a question of NBC,
"In Europe, the Sydney Games will be occurring mostly during the
early morning hours. Yet Europeans are used to getting up early for such
events and the ratings are surprisingly high. If Europeans can get up in
the middle of the night and watch their favorite athletes live then why
can't Americans?" (The Athens time zone makes it even more
palatable with many of the main events occurring during the East Coast
afternoon, but most people would still be at work)
Well, that brought more than a few snickers from the mostly European
audience, who knew, as I knew, what the NBC answer would be, but it
seemed to bring near apoplexy to the NBC producer who actually answered
the question. He basically said there were more viewers, thus more money
to be made, in a four-hour block from 8 p.m. to midnight than there was
from 3 a.m. to 7 a.m. Hard to argue with that. But why not have both --
let those who want to get up early take a look and for those who sleep
let them eat prime time? When you invest the kind of money NBC invests
in the Olympics the answer apparently is you don't take chances in
reducing that prime time audience.
And if you ran a business and made a 1 billion dollar investment you'd
probably do the same. Which is why that old expression "You Get
What You Pay For" comes into play.
Television is also a business in Europe, and while Europe pays for
Olympic television rights, the amount doesn't come close to what NBC
pays. But in Europe, there were some 14 hours of live coverage from early
in the morning until the last event at night, plus the wrap-up shows --
and no waiting until prime time to see what has happened.
Which would you prefer?
What's The Catch?
Before you answer, there is a catch. Most of the stations in Europe
carrying the Olympics were state-owned broadcasters, as opposed to
private stations. Some state-owned broadcasters carry advertising (as
they do in Switzerland) and some don't (such as the BBC in the UK). But
they all do have an annual license fee which any household with at least
one television set must pay. In the case of Switzerland it costs
approximately $1 a day for the privilege of watching television in your
home. Cable costs are extra.
In the US, if you put aside cable or direct satellite fees, it costs you
$0 a year to watch your national and local networks. In return you see a
lot more advertising (most European countries strictly control how many
minutes of advertising is allowed each hour and/or how many
interruptions there are in a program.) Have you counted the number of
commercial breaks, and how many commercials you are watching in an hour
during the Games in prime time? If you take the four hour prime time
block and strip out all the ads, the station identifications, promotions
for upcoming programs etc. then that four-hours of prime time is more
like three hours of actual Olympic competition.
And have you noticed how they make you wait until late in the program
for what you most want to see. Doesn't take rocket science to figure
that one out. But for all of that you have no license fee cost -- the
only charge made to you is your time for watching. Which would you
The real truth is that without the money NBC pays for Olympic rights the
Games as we know them would not be as we know them. NBC is so important
to the financing of the Olympic movement that it is a wonder they don't
call them the NBC Olympic Games!
And that brings us back to where we started. Because NBC pays that kind
of money we had such terrific Olympic Games. And that is NBC's real
And thank you American viewers for accepting to wait all day to see what
has happened, and for watching the ads, and buying what they ask you to
buy, and for watching NBCs new fall line-up that they continually
promoted. The US ratings for the Games are up considerably this year
allowing NBC to sell even more ads and make even more money. The
investment is a great success. Long may it continue.
And long may we in Europe continue watching everything live.
M. Stone of Stone & Associates, a partner in followthemedia.com