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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 nbcolympics.com, 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%.