The 2014 Winter Olympics reached a record of $977 million, easily beating the previous high of $831 million set in 2006, while the 539 total hours aired by NBCU across its broadcast and cable networks also set a record and represented an increase of nearly 25% from 2010, according to Kantar Media. It was the third highest-grossing sporting event of 2014, after the NFL post-season ($1.23 billion of TV spending) and the NCAA Men’s Basketball Tournament ($1.13 billion).
But this year’s Olympics, which begin 8 February and will run for 17 days, will give Americans unprecedented options to follow on not just television but also digital platforms. NBC Universal plans to show more than 625 hours of programming on its linear TV channels, together with over 1,800 hours of live streaming video coverage, a significant increase from the 2014 Olympics, Kantar said, when 1,000 hours of live streaming video coverage was offered at www.nbcolympics.comwww.nbcolympics.com.
According to the company’s analysis, US domestic rights fees for the Winter Olympics have increased 150% over the past 20 years, and are approaching the billion-dollar threshold. But the company predicts that future fees will be going up at a slower pace. The International Olympic Committee (IOC) pairs Winter and Summer Games together and sells the media rights as a package. NBCU, which has the US rights locked up through 2032, will see its fees increase from $2.38 billion for the 2018-2020 pairing to $2.59 billion in 2030-2032 for an average increase of 3% per cycle.
The big increase between 2010 and 2014 in linear TV programming resulted in more commercial units for sale. NBCU cable properties were the main beneficiaries. At the 2014 Sochi Games, 66% of programming hours and 54% of ad time were on these complementary channels.
Even though Olympics programming is spread across multiple channels, the NBC broadcast network gets an overwhelming majority of the viewing. This will be true again in 2018, Kantar predicts.
“The drawing power of NBC is aided by its programming focus on events with strong audience appeal, such as figure skating, snowboarding and alpine skiing,” the firm said. “In past Winter Olympics, NBCU cable networks typically finished their daily Olympics coverage by 8pm, leaving a clear field for NBC’s primetime telecasts. That will change this year. NBC Sports Network will be the lead cable network and it will feature ten days of 24-hour coverage as well as live primetime coverage nearly every night throughout the Games.”
In 2014, the NBC telecasts had an average 54% more paid ad time per hour as compared to sister cable networks. Within NBC’s full-day Olympic schedule, prime time had a slightly heavier ad load than other day parts. Squeezing more sponsor messages into higher-rated programming is an established monetisation strategy.
Due to the combination of larger audiences and more ad time, the NBC network by itself accounted for approximately 85% of the audience delivery in the 2012 Olympics. NBC prime time was responsible for about 55%.
One outcome of more programming content this year will be audience fragmentation as viewers distribute their consumption across the expanding array of linear and digital options, leading to declines in average unit rates given the lower available audience.
“However, having more choices can increase the aggregate number of Olympics viewers even as the average audience per channel and per spot declines,” Kantar said. “Ad revenue growth thus becomes more dependent on volume than average price.”