To Stream Or Not To Stream? For 2012 Olympics, BBC, NBC Disagree

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imageAlthough the summer Olympics ended just over six months ago, the networks are already putting their digital plans in place for London’s 2012 games. Speaking at a forum on the games, executives from NBC Universal (NYSE: GE) and the BBC discussed their expectations for the online games. In terms of priorities for distributing the games online, the two broadcasters have fairly wide disparity in what they want to offer users. As the BBC has said, it will offer the complete Olympics broadcast online — all 4,500 hours — while NBC says that the 3,600 hours of broadband video it made available for the Beijing Olympics sure seems like plenty.

I asked Rick Cotton, EVP of NBCU, if he expects the network will match the BBC’s promise. He responded saying that perhaps there will be more, and “I’m sure NBC Sports will regard the BBC’s 4,500 hours of streaming video of the games as a challenge.” For the most part, Alex Balfour, head of digital media, London 2012, said he wanted to see how to get as much online video widely available to users, including mobile. Perhaps it reflects the nature of the companies — NBCU is a private company, BBC is a non-profit entity — but Cotton, who is also on the legal side and also influenced his perspective, was more interested in highlighting the efforts the network is taking to curtail piracy of the Olympics.

More after the jump

Photo Credit: striatic

Perhaps a few more digital pennies by 2012: Cotton held up NBCU and News Corp.’s JV Hulu as a model for how online video can attract audiences, while offering media companies protection for copyrights. However, though its three years away, the NBCU exec indicated that the company is still concerned about making money from its online Olympics offerings. Citing NBC CEO Jeff Zucker’s line about “trading analog dollars for digital pennies,” Cotton touted the enormous traffic its official games site got last summer — 25 million uniques and over a billion pageviews, for example — but the actual revenue the network realized from its online activities was relatively small. The network doesn’t seem to hold out much hope that the 2012 games will bring in substantially more online ad dollars, especially considering the current economic climate. Cotton: “Digital advertising has fallen off more than traditional in some cases. It’s still a bit of an add-on, even though it’s growth has been so rapid up until the past few months.”

Getting it right on digital rights: There is a legal and technical arms race on when it comes to digital rights protection, Cotton said. “There is a tidal wave and it is out of control. But I believe we have the will in the private sector to bring piracy under control. SNL’s Lazy Sunday put YouTube (NSDQ: GOOG) on the map. Several months later, Google bought it for over $1 billion. NBC didn’t profit from that. Fast forward to today, YouTube and other major sites have rights-filters and it’s under control. The P2P sites are a different story.This is not about putting people in jail, it’s not about penalizing. It’s about educating people and moving people to authorized sites like Hulu. Gradually, over time, we will educate consumers. There will always be hackers or some 16-year-old with equal amounts of time on his hands and ambition to get something for free. But we’re talking about the mass of consumers and we’re still at the beginning of the process getting them to adopt online video.”

Bridging marketing and social media: Apart from the differences on how much Olympics’ content should be available online, Balfour also appeared more sanguine about attracting online ad dollars to the event, though he clearly didn’t want to venture any guesses about how the ratio between TV and online is starting to measure up. Still, like Cotton, digital’s role is largely seen as experimental and incremental. “We have about seven sponsors, all of whom will have digital campaigns associated with the games,” Balfour said. “They want to activate their sponsorship and digital is the most obvious channel to do that. The most obvious idea is to use the web ads to drive engagement. Although there has been some reticence to support social media features, they’re slowly coming around. Ultimately, it will be a great testing ground for us.”

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Having read some of the related articles, I was particularly amused by the rantings of AP CEO Curley about content rights. Who does he think PAYS for the Olympics – certainly not AP. If the broadcasters are denied exclusive access, their rights fees will have to drop so dramatically that there may not even be an Olympics to cover.

What's the old saying? Oh yes, "he who pays the piper calls the tune"

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