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The Media Blues

Tokyo — NBC’s Beijing Olympics coverage was over the top, with more coverage over the air, on its cable networks, and online than in all the years since the 1960 Olympics, combined. But here’s the shocker: despite streaming most of this — thousands of hours — over, the Games drew less than $6 million in online advertising revenues. That’s a tiny fraction of the $1 Billion NBC recouped on legacy media toward what it spent to acquire American broadcasting rights.

On a revenue-per-hour basis, the web is a bust. A great public service maybe, but neither NBC nor anyone else can make money like this.

Is this one more sign that the end times are near for traditional media?

By all accounts, the Olympics provide the kind of content that still attracts advertisers with wide-open wallets: it’s live, it’s big, it’s must-see TV. NBC broadcast in the high definition medium, which is as unlike TV as is radio, and for which the Olympics are made. NBC even released extra advertising inventory in the middle of the games in order to meet demand. But online died where it stood.

To make the new web media work will take the kind of major innovation initiatives for which we designed our Corporate Innovation Project.

We know that consumers are more and more willing to pay for content. The time they devote to paid content is rising at a healthy pace: up 16% over the last five years. This content includes pay TV on cable and satellite, movies (rentals and in theater), recorded music, video games, books and expenditures on the Internet and for mobile content.

But, advertising-based media (including broadcast TV, radio, newspapers and magazines) are off 8%.

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