Update: The NYTimes’ Brian Stelter has a great story on the success of NBC (he asserts the same point that I wrote over the weekend). Brian writes “NBC treated the Olympics like a research laboratory, and it says it is gleaning information about how people preferred to consume content from its combination of television, online and mobile offerings. (Critics charge that because the network did not stream the most popular sporting events live, its findings are skewed.) Regardless, the network is using the Olympics to assert that TV is the preferred medium of consumers, with the vast majority of viewing — 93 percent — done via television.” – It’s basically a great success and shows that the long tail distribution applies to this great example from NBC of converged media- As the saying goes “It’s all good”.
— my orginal post
NBC’s web site strategy for the Olympics was brilliant from a business perspective. Pump the hell out of it via promotion (like a crack dealer handing out samples) then do the “take away”. Everyone was so jacked to get online coverage – sure they did – Live Ping Pong and Fencing. The big show’s was the TV coverage.
What’s so smart about this move? NBC just followed the money. They have “scale” on the broadcast signal and advertising on TV. The Internet at best is just a social media promotional tool. Why ADVERTISING DOESN’T WORK on the Internet. Better said broadcast advertising techniques don’t work on the web. It’s a simple numbers game. NBC just could never scale up the broadcast online to get the kind of return that they can command on the TV side. An example EMarketer calculated its ad-revenue estimates based on the number of video streams that NBC said it generated during the first seven days of the Games. EMarketer estimated that NBC charged on average $50 per thousand ad impressions. This is a joke on return on the video ads.
So I say NBC was smart. On the user side they just didn’t get the coverage that they wanted, but hell NBC paid for the rights. NBC wins and users loose.
The Wall Street Journal article by Emily Steele frames NBC’s online effort as a failure. No way Emily they did fine. There is no there there online for NBC. The end game was the TV broadcast and TV advertising. The web was a promotional and fringe service.
I’m bullish on online video but the market for broadcasting online is in absolute turmoil.
Henry Blogett has a good take on his blog SAI. Of course I’m biased because he agrees with me. In fact I’m hard pressed to find someone to disagree with me on this post (except the web 2.0 echo chamber).