What were they thinking...?

For those who pay any attention at all to the news, you might have heard about a little scuffle in the land of late night TV recently. Whether you are a Leno fan, on Team CoCo, or neither, pretty much everyone can agree that NBC really made a mess of that whole situation. Now, once again, NBC's "brilliance" shines through in their coverage of the 2010 Olympic games in Vancouver.

First, I don't understand why NBC is still losing $250 million on the Olympics. These are supposed to be crowning moments in human achievement, where nations come together to support their home-grown athletes and enjoy the thrill of pure competition and sportsmanship. For this reason, the two week Olympic season is a prime time to generate significant advertising revenues. But, alas, NBC somehow still turns what should be gold into something far less.

Second, I am baffled by the decision to cut back--that's right, not moving forward but backwards--on the Web coverage compared to the last round of Olympic games 18 months ago in Beijing. In 2008, NBC provided 2,200 hours of live streaming, or 61% of the total 3,600 hours of event coverage. In 2010, they are streaming only 400 hours out of 830, or 48%. Incidentally, NBC has the broadcast rights for live streaming of every event it covers, if it so chooses. Why the step backwards?

Initially one might think the answer lies in the first point above: NBC is already poised to lose a lot of money on the games, so they are trying to minimize the damage by "forcing" more viewers to watch the events on live TV, where advertising dollars are higher. It should be noted that all events can be accessed on the Web through NBCOlympics.com, but most events have the Web-equivalent of a tape delay, meaning you cannot access they for 24 hours after the event finishes. However, the bizarre piece of this puzzle is that NBC is not actually hurting for advertisers--they sell combined Olympics advertising packages that include both TV and the Web. At other times, NBC successfully inserts as many ads into live-streaming as TV broadcast, such as during the football season on "Sunday Night Football."

Apparently the real answer is that NBC does not want to damage its relationships with traditional distributors. Other media companies have also recently tweaked their online streaming strategies for the same reason.

Yet, despite the drastic reduction in online coverage versus Beijing 2008, when compared to Turin 2006 the Web coverage is much higher. Back then, NBC only streamed one hockey event, mostly as a test. The ironic thing: even though these winter Olympics have a much larger Web presence than in 2006, the TV ratings are also much higher. Maybe in the battle between traditional TV broadcast and live online streaming, you can have your cake and eat it too. Unless you're NBC.

NY Times Article Link