Our Multimedia Olympics Obsession

It was no surprise that the Olympics was a ratings blockbuster for NBC. The network’s ratings more than doubled during February Sweeps, up 105% from last year, according to Nielsen and RBC Capital Markets research. The interesting footnote, however, is GE’s cross-platform success on the Web and mobile. According to RBC Capital Market’s latest report, “Media and Entertainment: 1Q10 Preview & Outlook,” one third of the people watching the Olympics on their television were also on NBC’s website.

We may have stomped our feet and threw Twitter tantrums in response to NBC’s frustrating coverage—including chronic tape delays and the never-ending parade of the Marriage Ref. ads (Kelly Ripa’s laugh still echoes in my head)—but we watched, we clicked and we downloaded again and again. We watched Kim Yu-Na win the gold medal on live television then checked commentary online, we tracked the live blogging of the alpine skiers and watched a live web stream of curling. When we weren’t online many of us were fiddling with our Olympics iPhone apps.

In total, 1.2 million iPhone users downloaded NBC’s Olympics app. Reflecting on the growing success of cross-platform strategies, RBC notes: “Content owners haven’t found a way to monetize this kind of activity in any material way yet and it’s not clear how they can. But if it ultimately leads to more hours in front of the TV, increased engagement and meeting consumer preferences becomes a benefit even without direct monetization.”

To further illustrate the shift in media consumption habits, the report brings up the case of Entourage. In 2004 all of the ratings came from HBO channels, five years later in 2009,  54% came from HBO channels, 25% were video on demand, and 21% were DVR. As viewers diversify their media usage and spend more time online, we could see price drops. In the report, RBC predicts that Apple may win its battle to drop TV show prices to 99 cents from $1.99.  “If Apple can prove that price elasticity is such that lowering the price of TV episodes to only $0.99 could materially accelerate the consumption of download-to-own TV episodes, we’d expect the TV networks to move more aggressively on pricing to help alleviate some of the slackening demand in DVD-related TV content.” In other words, as people shift from DVDs to downloads, lowering the price of those downloads will help spur the growth of that market.