NBCU-Olympics: Cablevision Subs, Those Who Don’t Pay To Watch TV Shut Out Of Live Streaming

Whether or not you agree with it, NBC Universal’s (NYSE: GE) investment in acquiring the rights and producing Olympic multi-platform video provides at least some rational basis for controlling territorial access. But the network has far less to stand on when it comes to its temporal mind games and is in quicksand when it comes to limiting live-streaming access to cable, telecom (AT&T (NYSE: T), Verizon (NYSE: VZ) video), or satellite subscribers. That’s right. If you are an over-the-air NBC viewer or one of the increasing numbers who watch via computer, you have to know a hack to watch. Oh, the same holds true if you’re a Cablevision (NYSE: CVC) sub — the only major MSO not to agree to a separate deal with NBCU for two Olympics-only cable nets and the live streaming from NBCOlympics.com.

The result: trying to watch live video from a Cablevision zip code is like being punked. NBCOlympics.com asks for a zip code, then asks the user to select his/her cable or satellite provider from a drop-down list that includes the Long Island cable operator. The result: a red-text warning that says “We’re sorry, you will not have access to live Olympic video or long-form replays online because the TV service provider you selected is not a partner of NBCOlympics.com. Please contact your local cable, satellite or telecommunications operator for more details.” The options then are to watch highlights or go for the hack — enter a zip code and a distributor with an agreement while agreeing that you are a paid sub of that service. Verizon and AT&T could end up with more viewers claiming to be subs than they actually have.

Granted, it shouldn’t have been too difficult for Cablevision, which partnered with NBC for Triplecast (the first effort at wall-to-wall Olympic coverage), to reach an agreement that would give its online and cable subs the most access possible, including special Olympics cable channels. The company’s reply to our query mentions its carriage of NBC’s comprehensive coverage but the home of Optimum Online, the broadband service that has earned it accolades, isn’t making it easy for its own subs to see the live online Olympics. Asked for the reasoning, a spokesman replied: “We haven’t commented beyond the statement.” (Cablevision’s own Newsday Mediaweek have more details.)

But NBC’s decision to base access to the bulk of its online video coverage to those who already pay for TV (instead of opening it to all as *CBS* did with March Madness) runs counter to the very notion of bringing the sports that aren’t on TV to a greater audience. It could have been a great opportunity.

Side note: ESPN’s (NYSE: DIS) broadband network ESPN360 also is limited to subscribers of companies with which it has distribution deals, part of the Disney sports group’s efforts to replicate its cable model on broadband. (And, yes, most, if not all, also is limited territorially although they do tend to show major events in real time and they have found a way to provide access to U.S. military bases.) The business model routinely draws complaints here. One bonus point for NBC: at least, I can still watch NBCOlympics.com video even when I’m not at home base. ESPN360 just told me I can’t watch until I’m using my home internet connection. So much for when you want where you want it.