It’s no secret that Disney (NYSE: DIS) would like to get another crack at the Olympics and plans to bid for rights to the 2014 and 2016 games.The last time ABC had rights to the Olympics was 1988 — before e-mail was ubiquitous, broadband was even a possibility and ESPN was a sports powerhouse. So what would an ESPN-ABC Olympics look like in the age of high-speed internet and video-centric handsets? How would it compare to the coverage of current rights holder NBC Universal (NYSE: GE) John Skipper’s four-letter answer: Live. I caught up with Skipper, ESPN’s EVP of content, and cohort John Walsh, EVP and executive editor, during the NBA All-Star Weekend on opening night of the Winter Olympics for a wide-ranging conversation in, of all places, the bar at the Dallas Ritz-Carlton.
How much of the Olympics would be on ESPN’s broadband net ESPN360.com (soon to be rebranded ESPN3)? No commitment to showing all events live online but “a ton of it because, remember on 3, you have infinite screens.” Would he tape delay ski runs for prime time, as NBC has been criticized for doing? “We believe in live. We believe in live. We just think at this point with technology and people’s expectations and the ability to get instant information, we believe in live.”
Skipper quarrels with the mantra that west coast viewers are willing to have events delayed to get them in prime time. “Every time I hear the discussion about how on the west coast want to watch in prime time, Iâ€™d like to know what the question they asked them was. Did they ask them, ‘Would you like us to tape delay it into prime time’ or do they ask them, gee, when do you prefer to watch your big events. Prime time?’ That would be my guess is what they ask. â€¦ I’d be interested to know if they asked do you prefer to watch live in early fringe or delayed in prime time? … The other comment I would make is, all right, if youâ€™re a sports fan and you really care about the event, you care too much about knowing who won to wait.” (I thought this would come up on an NBCU Olympics research call today.)
When Walsh joined us, Skipper brought him up to speed: “I said we are committed to live.” Here’s an edited version of what followed:
Walsh: “The numbers are there. Just look at it. You can make an argument for it …”
Skipper: “You canâ€™t make any conceptual argument for it.”
Walsh: “Eventually current events will overcome it and … It just won’t happen.”
Skipper: “You can’t make an argument that it’s fan friendly.”
Walsh: “No. But the Olympics is a prime-time audience. It’s different.” For now. “Everybody’s going to be converted to currency because they’re not going to stand for it but I think it’s going to take one more Olympics and then the game will be done. But [NBC's] not dumb. They’re making calculated decisions about advertising dollars in prime time. That’s what theyâ€™re doing.”
Kramer: Let me ask you about this idea that everything has to be watched at an NBC hub. You can have all the widgets you want, but if you to watch video, can only watch on NBCOLympics.com, etc.
Walsh: “That’s what they bought,. They have a window. We can do replays after 24 hours or something like that.”
Kramer: But I canâ€™t take this moment and put it on Facebook and say, ‘cool moment.’
Walsh: “That’s interesting. Can they do that now?”
Skipper: “Oh, they do it, John. They so efficiently police the proliferation of any video … Let me address how this affects us. I believe the restrictive manner in which they treat all aspects of the Olympics is very old school and I think, ultimately, not fan friendly. I think ultimately you could generate more interest in the Olympics and Olympic sports if we, for instance, had the opportunity to basically report on it, show videos, get people excited. At this point, what we have access to is very limited and itâ€™s a very old-fashioned idea.”
Walsh: “You’re arguing that on one side but it is THE question about sports. David Stern became, I think a visionary, when he said, ‘Screw it, weâ€™re going to sell at whatever market rate. We want our game all over the world. We want it everywhere. And I can tell you, boxing was killed by HBO, because boxing said weâ€™re not doing highlights â€¦ that’s killed the sport because they became so focused and so linear and so constrained.”
Kramer: It’s bifurcated. If you want to live streaming events or VOD you have to be a paid video subscriber. If you want the highlights, you have to go NBCOlympics.com to watch the highlights. You don’t have to be a subscriber to anything. Is that something you would do?
Skipper:”That sounds pretty smart. One thing they have to do is maximize revenue and that drives everything they’re doing. They believe by time shifting events they can aggregate a bigger audience and sell more ads. They believe by withholding video from everyone else and forcing you to come to NBCOlympics.com they can generate more revenue and here, they’re also generating more revenue. So there’s method to it. It’s not complete madness. It is simply anachronistic.”
Walsh: “The second one is anachronistic. The first one is about to be anachronistic.” (Skipper: “It is anachronistic.”) The first one is not yet because they’re still making a large part of their money on the audiences in prime time. It’s still working. It will be anachronistic.”
Skipper: “You’re right. It’s anachronistic for fans already. It may not be anachronistic for NBC.”