894M Reasons Why Rights Rule Online

Written by Daisy Whitney

The Beijing Olympics that start next week will be the first “online video” Games, with NBC’s 2,200 hours of live Web coverage. But the sporting event has also become a case study for the push-pull war between consumers and networks over new media rights, money and user experience. That’s because those 2,200 hours will only be available on NBColympics.com — not Hulu.com, not even NBC.com.

Some critics say NBC is short-sighted for hoarding its Web video on one site. But there are many reasons the network is keeping the Olympics video close to home — 894 million reasons to be exact. Because that’s what NBC paid for exclusive rights to carry the games across all mediums.

While the issues of rights, money and user experience are important to the network’s Olympics coverage, they’re not unique to the Olympics. They apply to other big-name programming on the Web, too. Let’s look at those three issues, starting with rights.

Who has what rights, for which medium, and for how long are exactly why lawyers have jobs. “The more platforms that get added the more complicated dealing with rights gets,” said Aaron Mendelsohn, CEO of Virtual Artists, a new production studio formed in the wake of the writers strike. “When it comes to IP, people get very worried they are going to get screwed.”

Rights are tied to money, of course.
Networks want to control their content to maximize ad return. “By paying closer attention to where you put your content, you can control, count and monetize the audience in multiple places,” said Jeff Sanders, a partner with Roberts Ritholz Levy Sanders Chidekel & Fields, a New York law firm specializing in media, entertainment and technology. Also, when programming lives on more than one site, the content owner often has to split the ad revenue. A network won’t want to share for marquee events like the Olympics or signature TV shows.

Television networks also have many business interests –- web, broadcast, cable, DVD –- and they parcel out the release of their content carefully to wring maximum dollars from each one and to avoid cannibalizing the others.

Then there’s the user experience.
“To take our live event coverage and put it on multiple video players on multiple sites would be harder to control the quality of that delivery,” said Perkins Miller, senior VP for digital media at NBC Sports and Olympics, when I interviewed him recently for TVWeek.

I believe this Olympics will be historic for many reasons, and one of those will be for being the first truly multi-platform Games. Whether you think NBC is hoarding its content or not (I don’t think NBC is hoarding), the 2008 Olympics will be an important milestone in the online video economy thanks to the sheer volume of web hours the network is offering.

Daisy Whitney is a contributing writer with TelevisionWeek and the host of the New Media Minute, a weekly webcast on the business of online video.


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