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Watching the Games

The lesson of this year's Olympics? The Internet drives viewership, both online and off.

August 14, 2008

The International Olympic Committee distinguished this year's Games not just by awarding them to China but by allowing them to be shown live on the Internet. That's because it was finally satisfied that webcasters could use technology to stop their video streams from crossing national borders. This technology enabled the committee to sell online rights separately in each country and, more important, helped protect its main source of revenue: the exorbitant sums that broadcasters paid for the privilege of televising the Olympics. After all, if NBC had to compete for viewers with online feeds from around the globe, would it have been willing to pay $894 million?

And so it is that we have this nice parallel: The year the Games are held in a country whose government aggressively censors the Net, the IOC begins allowing live coverage online -- if it's electronically restricted. Evidently, the committee doesn't have a sense of irony. NBC has added some limits of its own, by delaying or omitting online feeds for some of the most popular events. But here's another parallel: Just as the Great Firewall of China hasn't stopped determined Chinese residents from accessing banned websites, neither have the broadcasters' restrictions stopped avid sports fans from finding ways to watch and share Olympic videos. The wide availability of unauthorized feeds is a reminder of a 21st century reality: Once content is made available somewhere, it becomes available everywhere. Rights holders can make their content hard to find online, but they can't really make it scarce.

Is that a bad thing for broadcasters? NBC's boffo TV ratings suggest the opposite. The company is drawing record-setting crowds to its ample online feeds (2,200 hours of streaming video, compared with 1,400 hours on the air), with more visitors and page views each day than it attracted during the entire 2004 Olympics in Athens. Yet the enormous audience for the TV broadcasts -- a total of 157 million people through Monday -- dwarfs the number of Web users watching video streams, NBC executives said. By their count, 90% of the audience is watching the Games only on TV, compared with 0.2% watching only online.

Granted, NBC's numbers don't include those tuning in to bootlegged streams and downloads. The unauthorized online audience is in the millions, judging by the popularity of a pirated high-definition recording of the opening ceremony. Yet as the network's statistics show, people will watch big televised events on their TV sets, not on their PCs, if they can -- even when the programming is available in advance online. The lesson here is that the Internet is the route to more viewers, online and off. And if broadcasters don't serve the online audience, someone else will.

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