Streaming-Linear Balance Beam in Rio Encapsulates TV Business Transition

Gauging success of NBCU’s Olympics effort is complicated by TV Everywhere adoption
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Given the accelerated pace at which consumers’ interaction with video content is changing, it’s an interesting time for big events like the Olympics. The time-zone proximity of this year’s Summer Games has allowed for live coverage for U.S. viewers of major events in primetime but at a time when live TV viewing is in steady decline. Ratings, accordingly, have dipped by double-digits thus far in Rio, but NBCUniversal maintains that robust demand for authenticated streaming video has kept advertisers happy and the Games on a profitable track.

We’ve seen a shift in the consumption of major sports as consumers either trim back their cable subscriptions or eschew them altogether. Skinny-bundle services like Sling and Playstation Vue allow viewing of ESPN with only an internet connection, and Disney itself recently set plans for an ESPN direct-to-consumer SVOD service by year-end. It’s a far different world than it was for the London Summer Olympics just four years ago.

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But rest assured, while TV ratings for Rio Games may not reach the levels of yesteryear, the primetime coverage will still be among the highest-rated telecasts of 2016. What will be more important than ever though are the 4,500 hours of live streaming that NBC has planned. Both NBCOlympics.com and the NBC Sports app require authentication, but users of the aforementioned OTT services as well as Comcast’s own Xfinity Stream TV will be able to do so. That means at least some of the homes that rely solely on broadband for their video will have options. And recent data from video ad network FreeWheel seems to validate the TV Everywhere model, showing that the majority of TV-style long-form viewing occurs via authentication, and that those viewers watch more overall.

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There’s a good chance that the Rio Olympics will surpass the 2014 World Cup as the most-streamed sports event in U.S. history. That’s an important milestone because, by our estimation, a third of all video viewing will occur on streaming platforms by 2020. And that’s just among adults under 50. For younger men, for example, it will be more than half.

Looking even further into the future of video, this will be the first Olympics to feature virtual reality content. Just a few months ago, virtual and augmented reality seemed to carry a lot of buzz throughout the industry, but less so among consumers. Now that Pokémon Go has arrived, and we’ve seen the frenzy that good experiences can create, it seems to have taken a few big steps back from the bleeding edge. While best practices are still being figured out, bringing users into the middle of big events seems like low-hanging fruit for the technology. So yes, we are still in the early days of the new TV age, but one thing remains clear—whether or not we can always measure it, people are watching.

Brian Hughes is senior VP, audience intelligence and strategy, for Magna Global.

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