NBC Plans Olympic-Size Test of Digital Limits

The group bringing digital coverage of the Olympics to the U.S. is situated on the fourth floor of a nondescript space in an office-park complex in Stamford, Conn. A recent visitor, sitting in a corner conference room, could have mistaken it for the home of almost any company -- a small hedge fund, say, which in fact was the previous occupant. The barebones area housing NBC's digital-operations group for the games is not coincidental: All NBC's sports operations, currently split between Connecticut and New York City, will start moving into one complex elsewhere in Stamford later this year. The transitional aura is also appropriate because NBC Sports is reversing its stance on digital viewing and offering live-streaming of every sport in the games on NBCOlympics.com. Success -- in traffic numbers and ad sales -- could make NBC Sports the poster child for the promise of digital viewing. But any significant misstep could deal a setback to the network, which has been plagued with ratings challenges for years. Sports are one of its few bright spots. A few months before the games kick off, NBC execs are not sure what to expect. "There's virtually nothing to draw on here," says Coordinating Producer Dave Gabel, who runs the editorial side of NBCOlympics.com. "There's no rehearsal." In December, NBC Sports announced one of its grandest digital experiments to date: It would live-stream the Super Bowl -- something that had never been done. In the U.S., 2.1 million people accessed the stream, NBC Sports later said. It was a big step, yet the experiment shouldn't be considered a gauge of digital video's true promise: Of all sports events, the Super Bowl is about getting together with others to watch the game on traditional TV. This summer's Olympics Games in London, however, is a true barometer. NBC Sports will stream all 32 Olympic sports -- from judo to trampoline, archery to volleyball -- as they happen. If anything was made for digital viewing, it's the Olympics. After all, the internet is the one medium built to celebrate and elevate any niche. Sure, some storylines and athletic feats can transcend a given sport and make for great TV. But overall, TV broadcasts cannot bring viewers the same depth and breadth of the Olympic experience that digital can. "It will be the biggest digital event that this country has ever seen," said Rick Cordella, VP-general manager of NBC Sports and Olympics Digital. With the move, NBC Sports head Mark Lazarus is abandoning former chief Dick Ebersol's position that the network would never show the most popular Olympic events live online. The thinking was that it would cannibalize prime-time, tape-delayed viewing -- and the big-money advertising deals tied to it. The path to this point has not been direct, though. NBCOlympics.com dipped its toe in the water in the 2006 winter games, when it live-streamed the men's hockey final in Turin, Italy. In the 2008 Beijing summer games, the site covered 25 sports and carried 2,200 hours of live streams, but it saved key events for prime time. For the 2010 winter games in Vancouver, the network retreated, airing only hockey and curling because almost every event was eligible for live prime-time viewing. But this summer, in addition to having as many as 30 concurrent feeds, NBC Sports is developing two mobile apps: one for live viewing and video highlights, and one to serve up such features as athlete profiles and event results. There are nuances of the plans that won't make digital diehards 100% pleased: There's no immediate video archiving of events that will later air on prime time, and much of the streamed coverage will require viewers to prove, or authenticate, that they have cable or satellite subscriptions. The flow of ad dollars to the digital platform has been an evolution as well. Digital ad sales for London have passed $55 million, more than double the digital revenue for Beijing. Comparisons are not so straightforward, though. For example, beside the prime-time embargo in Beijing, digital-content consumption has exploded in four years. And NBC Sports has so far sold $900 million-plus in TV ads, so it's clear that digital sales have a long way to go. Still, NBC Sports said, digital sales could rise in the three lead-up months and could even increase during the games if traffic numbers beat projections. How much traffic the network's Olympics site will garner is a question that NBC execs don't pretend to have a precise answer for. Again, looking to past Olympics isn't that helpful. Networks and technologies that were just gaining users (Twitter) or that didn't exist (iPad) for the last summer games will most likely play a big role. There are also factors outside NBC Sports' control. How will Team USA fare? How many finals will the swimmer Michael Phelps make? "We'll find out by Day 3 what our cruising altitude is going to be," Mr. Cordella said. "We're making a guess at it," he added. "We just don't know." To help educate viewers, NBC Sports is publicizing the authentication process. NBCOlympics.com is already carrying ads that direct visitors to a landing page that provides them with an explanation of how to access live-streaming, a list of the cable and satellite providers that support it, and frequently asked questions and answers. An even-more important source of traffic might be the deal NBC Sports has struck with YouTube. As part of their agreement, YouTube is building a video player for NBCOlympics.com. The online-video service will also promote the live-streaming of the games to drive traffic to NBCOlympics.com (YouTube must meet a traffic goal to get paid, though neither company would give specifics.) NBC Sports hopes that YouTube's younger demographic will help it attract a new generation of Olympic enthusiasts. Mr. Gabel, a veteran of Olympic coverage, is responsible for making sure the editorial operation is ready. The London games mark his ninth Olympics, fifth on digital operations and third in the lead editorial role. The sheer number of hours of streaming video -- more than 3,500 -- isn't a major worry for Mr. Gabel, who is confident that the site's operations team is prepared to handle it. He's more concerned with nuances that outsiders wouldn't think of : layouts that can work with different scoreboards or strategic dilemmas spawned by the social-media thread that stitches digital together. For instance, should NBCOlympics.com create a Twitter account for every sport? Does it provide video highlights on the mobile app for people on the East Coast as soon as their prime-time telecast ends, or does it wait until the prime-time show has ended on the West Coast? How quickly can video highlights be posted online? In relation to that last question, Mr. Gabel said that he could use Olympic trial events to test highlight turnaround time. He sounds as if he's talking himself into it, and then seems to dismiss the idea altogether. "Nothing can replicate Saturday morning, July 28, at 10 a.m.," he said. NBC Sports' digital plans for future games remain murky. It has said viewers can expect to be able to watch all events live either on TV or online through the last games of the network's rights deal in 2020. Beyond that , NBC Sports isn't guaranteeing anything. Rio de Janeiro will host the 2016 Summer Olympics. That means many events will be eligible for live prime-time viewing, as the city is in a time zone similar to the Eastern U.S. Could NBC Sports again take a step back and restrict viewing of those events? The results of this summer's digital foray may provide the answer. "Four years for digital is an eternity," a spokesman wrote in an email, cautioning against trying to predict what the digital landscape will look like.

NBC Plans Olympic-Size Test of Digital Limits

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