While NBC's overall ratings for the Torino Games will end up lower than the network or its advertisers would have liked, industry analysts insist it doesn't represent an erosion of the Olympics' value. Through last Thursday night's ladies figure skating finals, NBC was averaging a 12.4 rating/20 share, down nearly a quarter from the 16.5/27 recorded after 13 days in the 1998 Games in Nagano, Japan—the last Winter Games not on U.S. soil.
Media insiders nonetheless say those numbers are not far off from projections. Magna Global Executive VP of Audience Analysis Steve Sternberg notes the Games are averaging about 42% of the overall six-network household viewership (39% in the 18-49 demo)—not much different from Nagano.
“It's pretty much doing what we expected it to do,” says Sternberg. “Maybe slightly worse, but not much.”
The Olympics are not strictly about ratings to networks, which view them as a vital marketing tool for building goodwill among viewers and advertisers. But the numbers were low enough that NBC offered make-goods to its advertisers, say media buyers, who add that marketers appear pleased with their return on investment. “Our clients, though disappointed in the overall ratings, are in very good shape with the Olympics,” one says.
Despite the slipping ratings, NBC Universal Television Group President Randy Falco envisioned a profit of $60 million-$70 million on the Games.
No Kwan Do
While ratings expectations prior to the event were tempered due to the time difference from Italy and the fact that results could be known long before the network's delayed broadcast, NBC has had bad luck as well. Several of the American athletes it had hoped would drive ratings failed to perform.
Prior to the Games, NBC was touting what could have been the Americans' best Winter Games ever, with network Entertainment President Kevin Reilly saying, “The extraordinary human events that come out of that are directly correlative with ratings.” But from skier Bode Miller's struggles to skating star Michelle Kwan's injury, NBC missed out on the chance to build on many of the American success stories that have driven viewership in the past.
NBC's prime time woes also hurt its Olympic performance, both in the lower numbers of viewers it could promote prior to the Games and the fact that the other networks counter-programmed aggressively. “Up until this Olympics, NBC was the No. 1 dominant network,” says Preston Beckman, Fox executive VP, strategic program planning and research. “The big shows were on NBC, so there weren't as many big shows to compete with the Olympics.”
Fox's American Idol surprised many by dominating the Olympics in head-to-head nights. “I don't think any of us expected Idol to do the kind of numbers it did against the Olympics,” says Beckman.
Falco called it an unprecedented level of counterprogramming: “The Olympics have never faced such competitive programming—seven of the top 12 shows right now. We faced no top-10 shows in Salt Lake.”
Lower Olympic ratings also mean that NBC has less of an audience to promote its regular lineup to as it looks to turn around its prime time fortunes. But Magna's Sternberg says NBC at least promoted the right shows during the older-skewing Games: “You've hardly seen any ads for really young shows like Scrubs or The Office, but you have seen a lot for Las Vegas, Law & Order and Conviction. They are doing a better job of promoting the right shows; a lot of networks have struggled with this in the past.”
With the Summer Games in Beijing in 2008 and the Winter competition in Vancouver in 2010, many expect the Olympics to regain its mojo—especially if the high-profile American athletes can avoid disqualifications and injuries. “Beijing will get huge corporate support from sponsors and advertisers, and there is a great amount of curiosity here in the U.S. about China,” says former CBS Sports President Neal Pilson, who consulted for the International Olympic Committee on television deals for the 2010 and 2012 Games. “Ratings have always been strongest when the Games are in North America, so Vancouver should do very well.”
Sternberg expects the Olympics to remain relevant. “When you are projecting four years from now, the Olympics will probably decline at approximately the same rate as prime time in general, which is good for NBC,” he says. “That means it remains a big event.”
But one unknown is how much online viewing will play a role. The Torino Games have been a success story for NBCOlympics.com. While NBC does put video highlights on the site, for the most part, it did not stream events live nor make clips available until after the event aired on television, although that probably won't be the case in Beijing in 2008. Falco says around 100,000 hours of Olympic video were viewed on the Web
And as broadband becomes a more popular platform for viewing TV, it will become an increasingly valuable ad-sales asset, according to Brad Adgate, director of corporate research for ad buyer Horizon Media. “Come 2008,” he says, “I think it would not be a bad move to sell the broadband video with the TV as an integrated package for the advertisers.”