NBC Universal expects turn a profit on the Winter Olympics, partly by relying more on video distribution via Twitter and Facebook designed to draw viewers to their TV sets.
In London two years ago, NBC found that sharing on Twitter and Facebook generated interest in broadcasts that aired hours later in prime-time. At this winter's games in Sochi, where the tape delay will be even greater, the network is increasing the hours being live-streamed by 42% and encouraging people to set their DVRs directly through Twitter.
"The more screens people watch on, the more they consume on TV," said Alan Wurtzel, president of research at NBC Universal.
The effort this time means NBC Universal will make a profit on its $875 million investment in Sochi, after breaking even in 2012, said people familiar with the plans, who asked not to be named because they weren't authorized to speak publicly. Growth at NBC Universal is important to Comcast, which bought the remainder of the company last year. NBC Universal paid $4.4 billion for U.S. rights to the games from 2014 to 2020.
The nine-hour time difference between New York and Sochi underscores the importance of the social-media sharing. By the time U.S. viewers settle in to their couches to watch prime-time coverage of slalom, figure skating or bobsledding, the results will have been known for hours.
Streaming adds TV viewers too
In London, where the time difference was five hours, people who watched the games on multiple devices also tended to watch more. They averaged 8 hours and 29 minutes of viewing a day, compared with 4 hours and 19 minutes for TV-only viewers, Mr. Wurtzel said. About half of that additional viewing took place on conventional TVs. The audience exceeded expectations, and Comcast's entertainment unit broke even on the production.
"Streaming added TV viewers, and that was the most important finding," Mr. Wurtzel said. "It was a pleasant surprise."
For the Sochi Games, NBC Universal has sold more than $800 million in advertising, while paying $775 million for TV rights and spending about $100 million to produce the coverage, the people said.
Christopher McCloskey, a spokesman for the network, declined to comment on the financials.
Controversy in Russia
One hurdle facing NBC in Sochi is political controversy of a Russian anti-gay law, which has attracted worldwide condemnation. Human Rights Watch is pressuring Olympics sponsors, including Coca-Cola Co., McDonald's and Procter & Gamble, to protest the measure. AT&T, which isn't a sponsor, this week took a stand against the law. Many of the sponsors have said they've raised the issue with the International Olympic Committee.
As with any major international event, there is also the risk that the games get overtaken by political events. Air carriers flying to Russia were warned this week to watch for toothpaste tubes containing materials that could be turned into a bomb in flight.
"Although obviously we have our fingers crossed that nothing happens, if anything, the prospect of a terrorist event, the controversy over the anti-gay laws, those things in an odd way have increased awareness and interest in these games," Bob Costas, the NBC anchor, told reporters in January. "I think people will be curious about that."
NBC will stream 1,000 hours of events live from Sochi, up from 700 in London and more than the total for the Vancouver and Turin Winter Games combined, said Sam Schwartz, chief business development officer at Comcast. To access most of it, viewers need to be pay-TV customers.
The web clips will run alongside 500 hours of broadcast and cable coverage, and 200 hours of video-on-demand on pay TV.
NBC begins its prime-time coverage of Sochi events, including snowboard slopestyle and team figure skating, on Feb. 6, one night before the network's coverage of the Feb. 7 opening ceremonies. While the sports events will be webcast, NBC has said it won't put the opening ceremony online.
NBCUniversal also expanded its relationship with Twitter, which will incorporate NBC content into message streams during the games. This week, for example, it distributed a video segment, narrated by Ryan Seacrest, featuring South Korean figure skater Yuna Kim.
Twitter users will be able to access clips in posts using a feature called "See It." By clicking a button, they can watch on a mobile device or online, or they can instruct their cable set-top box to record the event. The feature works for cable customers of Comcast, Time Warner Cable and Charter Communications.
~ Bloomberg News ~