NBC battles China controversy and fickle viewers in bid for Olympic glory

It would have been tough to imagine a more difficult Olympics than last summer’s Games in Tokyo for NBC, the US television network.

Among its headaches were a double-digit time difference with the US market, the sterile experience of televised sporting events without cheering crowds and a long-term downward trend in viewer interest in the event. The result was a 40 per cent drop in the primetime audience compared with the Rio de Janeiro Olympics in 2016.

But the Beijing Olympics, whose opening ceremony took place on Friday, will present those same challenges and more — not least of which is the controversy over holding the Games in China amid widespread concerns over human rights violations against the Uyghur population in Xinjiang.

“This will be worse,” said Craig Moffett, an analyst at research firm MoffettNathanson. “You have all the problems you had in Tokyo . . . and the atrocious geopolitical backdrop of human rights abuses that inarguably taint the celebratory nature of what the Olympics are supposed to be about.”

NBCUniversal has a lot invested in the Games. The company, owned by Comcast, has held the US rights to the Games since the summer Olympics in 1988 — a lucrative franchise that has raked in billions of dollars in advertising over the years.

In 2014 it renewed its deal with the International Olympic Committee and paid $7.75bn for the exclusive US broadcast rights from 2022 to 2032 — a contract that was signed before the decision about where the events would be held had been made.

But there are concerns about the value of these rights amid a decline in traditional TV watching habits.

“The hype machine that for generations has fostered the human interest stories that make the Olympics compelling requires regular TV viewership. That’s just not there any more”

NBC’s success has been built in part on a “whole network” strategy that involved steadily building interest in the Olympics by profiling athletes on its morning show or covering the run-up to the Games on its news networks. By the time the Olympics began, audiences were invested in the athletes and their personal stories. But this has become more difficult as viewer interest has strayed from traditional television to streaming services, social media or video games.

“There is a bigger gestalt issue that is weighing on the Olympics in general,” Moffett said. “The hype machine that for generations has fostered the human interest stories that make the Olympics compelling requires regular TV viewership. That’s just not there any more because people are not watching as much linear TV.”

Despite disappointing viewership, the Tokyo Olympics still raked in $1.8bn in advertising revenue.

While marketing executives said brands are more cautious about associating with the Beijing Games, NBC said it has attracted nearly 100 advertisers — about the same as it had going into the 2018 Winter Games in Pyeongchang, South Korea — including 40 new advertisers. It also said that the average spending level is up “slightly” from four years ago.

One of NBC’s aims is to use the Olympics to attract more viewers to its streaming service, Peacock, which was criticised during the Tokyo Olympics for contributing to a confusing viewer experience. NBC executives say they have improved the navigation features on the streaming service and that ad revenue is higher.

“Our digital revenue is up double digits, which is really just an indication of how the Games are being consumed more and more across multiple platforms,” said Dan Lovinger, executive vice-president for advertising sales at NBC Sports.

While viewership of “big tent” live television broadcasts like the Olympics, Oscars and the Grammys have been in decline, NBC is optimistic that it can capitalise on the rare opportunity of two big events happening at the same time this year.

On February 13 it will broadcast the Super Bowl, which is expected to benefit from a surge in viewership — and give the network a chance to cross-promote the Beijing Olympics.

NBC said it has sold more than 70 ads at rates of $6.5mn for the Super Bowl, the biggest game in American football. The network expects viewership to reach more than 100mn, up from last year’s 14-year low of 96mn.

“There’s simply nothing bigger than having the two biggest media events together at NBC Sports — the Super Bowl and the Olympics — occur on the same day and on the same network,” said Jenny Storms, NBC’s chief marketing officer for sports.

Moffett said the Super Bowl may provide a boost for the Olympics viewership but noted that the winter Games tend to attract smaller audiences than the summer event. “Unfortunately the deck is stacked against them,” he said. “The awkward timezone means viewers will have seen the results on social media before the broadcast. And there’s also Olympics fatigue so closely on the heels of the Summer Olympics.”