Zucker Defends NBCU's Online Strategy for Olympics

In response to Sen. Kohl's concerns, NBC Univeral chief says company is "extremely proud" of Vancouver coverage
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NBC Universal CEO Jeff Zucker defended the
company's
multiplatform coverage of the 2010 Vancouver Olympics in a March 31
letter to
Senator Herb Kohl (D-Wis.), saying he was "extremely proud" with
how the company presented the event.

"[O]verall both the 90% of American viewers who
receive their
television through MVPDs and the 10% of American viewers who receive
their television
on an ad supported basis over the air had access to more coverage than
in any
prior Winter Olympics," Zucker wrote.

Kohl had sent a letter to Zucker in late
February, expressing concern
over how Olympics video was distributed online. Kohl wondered why NBC
didn't
just offer consumers the ability to buy that content directly, instead
of
through an intermediary, like the cable or satellite company.

NBC limited live event streaming at the games
to curling and hockey,
and required users to subscribe to a multichannel video programming
distributor, like Comcast, DirecTV or Verizon FiOS, to view some videos.
Participating MVPDs paid NBCU an additional monthly fee for access to
the
Olympics content on the NBCU-owned cable networks and on video on-demand.
Videos were made available to everyone, including people who did not
subscribe
to an MVPD service, after a 40 hour window.

"The fees paid by MVPDs for the incremental
Olympics programming
are a significant factor in NBCU's ability to recoup the enormous cost
of
both securing the Olympic distribution rights and producing extensive
Olympics coverage,"
Zucker said in the letter.

He cited NBC's Olympics Triple Cast service,
the experiment that provided
three channels of pay-per-view Olympics content during the 1992
Barcelona games.

"NBCU did not generate the required additional
revenue to offset
the costs of producing additional coverage, and in fact suffered a
substantial
financial loss as a result of the pay per view offering," Zucker wrote,
adding that even with the MVPD-centric approach, the 2010 games were not
a
profitable product for the company.

Still, Zucker said that the Olympics are "very
important" to
NBCU, and that they expect new products to be available for future
Olympics
games.

"Given the rapid evolution of online video, we
also expect that
new and different viewing options for future Olympics will continue to
be
developed," he wrote.

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