Why the Tokyo Games didn’t deliver a ratings win for NBC
If streaming were an Olympic event, NBC would have walked away with the gold.
Through the first 14 days of the Tokyo Games, NBC said viewers streamed 3.5 billion minutes of Olympic content over the company’s streaming platforms — including its nascent Peacock service — already exceeding the number achieved at the 2016 Games in Rio with three nights to go.
Another 1 billion minutes of Olympics video were viewed on social media platforms such as YouTube and TikTok. Even a stream with a live feed of the flickering Olympic flame on a bridge near Tokyo Bay has drawn 1.5 million views on Peacock.
But Nielsen ratings, which determine the bulk of the ad revenue taken in for the Games, are still the historic metric for a successful TV event, and that’s where it got rough for the network that entered Tokyo amid myriad challenges that only seemed to mount as the events went on.
The 14-day average of 16.5 million viewers through Wednesday is down a whopping 41% from the audience for the 2016 Games in Rio.
The obstacles NBC faced in the Tokyo Games were apparent from the start. There was a year-long postponement, and a threat of cancellation loomed as Japan continues to struggle with the COVID-19 pandemic.
Based on how sports ratings suffered in the U.S. when teams played in empty arenas and stadiums during 2020, the lack of fans in the stands in Tokyo could not have helped. Even under optimal circumstances, a 13-hour time zone difference makes it nearly impossible to avoid learning the results of events that happen while most of the U.S. is asleep.
The other unexpected setbacks became headlines. Sha’Karri Richardson, a charismatic American sprinter, lost her spot on the team after testing positive for marijuana. American gymnast star Simone Biles opted out of most of her events to deal with mental health issues. Tennis phenom and Olympic torch-bearer Naomi Osaka was eliminated early after losing in straight sets in the third round to Czech player Markéta Vondroušová.
Despite the humbling TV ratings, NBC Sports Group Chairman Pete Bevacqua told The Times in an interview from Tokyo that the company views the Games as a success, with 150 million people watching some portion on TV or online.
“We were anticipating that it might be difficult kind of coming out of the gate here because of all of these curveballs,” Bevacqua said. “I’ve been encouraged that we have actually maintained the numbers for the duration of our time here.” (Olympics ratings typically drop off in the second week.)
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“The Olympics are one of the safest bets in the world when it comes to media,” Bevacqua added. “We wouldn’t trade places with anybody.”
Bevacqua acknowledged that NBC needs to improve its method of informing consumers where to find their favorite events among the 7,000 hours of coverage it offers. Many fans complained about being confused and overwhelmed by the process.
“I think one of the lessons that we have learned over the course of these Games is we need to do a better job of telling people where things are,” he said.
NBC said it was prepared for a ratings decline as the migration of viewers from traditional TV to streaming has upended nearly every major viewing event, with the exception of National Football League telecasts.
Since the last Summer Games were held five years ago, the U.S. has seen the launch of HBO Max, Disney+, Apple TV+, Paramount+ and scores of smaller players joining established behemoths Netflix and Amazon Prime Video, offering more options for the viewing public and making it difficult to amass the kind of mega-audiences the Olympics have drawn in the past.
Aware of the shifting landscape, NBC put aside a significant amount of unsold commercial inventory in the event of a major ratings shortfall. When ratings guarantees are not met, networks typically provide additional free commercials to make up the difference.
Bevacqua said nearly all of the advertisers who bought commercial time on the Games will reach the number of viewers they were guaranteed and no cash will have to be returned, the nightmare scenario for any network sales department.
“Over 99% of our advertisers will be made whole,” said Bevacqua, who reiterated that the Tokyo Games will be profitable for the company. NBC parent Comcast paid $1.3 billion for the rights to the Tokyo Games.
NBC is depending on the Olympics to give a boost to its Peacock streaming service, which was launched in July 2020 in anticipation of the Games. Although the company is not releasing any data, Bevacqua said the goal for Peacock sign-ups generated by the Olympics has been met.
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The company said its research also showed that nearly half of Olympics viewers were switching away from other streaming services to watch live Olympics coverage.
Bevacqua noted that Peacock is capturing the younger viewers who are leaving traditional TV. According to NBC, the median age of the Tokyo Games viewer on Peacock is 36. Nielsen data shows the median age for the Olympics TV viewer is typically in the low to mid 50s.
While older TV viewers may have scratched their heads at the amount of skateboarding shown on the network, the first-time Olympic sport ranked as the fifth most popular among the streaming audience. Gymnastics ranked first, followed by volleyball, basketball and track and field.
The streaming data will be welcome news to Comcast. Wall Street is rewarding publicly held media companies for the progress they are making with their streaming endeavors. ViacomCBS and AMC Networks reported strong financial earnings this week, citing streaming subscriber growth as a factor.
Comcast reported July 29 that Peacock, which comes in a free, ad-supported and paid subscribers versions, has about 20 million monthly active accounts, up from about 14 million in April. Overall it has been viewed as lagging behind the streaming services launched by large media conglomerates.
Lee Berke, president of the consulting firm LHB Sports, Entertainment & Media Inc., believes the Olympics provided a major lift for NBC’s streaming business. But the network tends to frustrate fans with its focus on prime-time broadcasts.
Biles’ bronze medal-winning performance on the balance beam aired live on NBC’s streaming platforms in the early morning hours on Tuesday. But the replay was not available until NBC played it on prime time TV that night.
“The Olympics is a 24/7 sports festival and there is media in place to cover all of it whenever it takes place,” Berke said. “Establishing prime time as sort of the ultimate goal is moving to lesser importance. I think everybody needs to acknowledge that.”
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