- Live TV has been carrying the TV industry, but questions of the Olympics being canceled due to the coronavirus is another reminder of its vulnerability.
- Live sports has been a bright spot in an otherwise declining TV business as people cut the cord and shift to online viewing.
- Longtime Olympics broadcaster NBCUniversal said it was “full steam ahead” for the Olympics.
- A cancellation could dent ratings and the rollout of NBCU’s new streaming service, Peacock, though, sources said.
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Live events have been propping up the TV industry, but questions of the Olympics being canceled or delayed due to the coronavirus is another big reminder of its vulnerability.
The International Olympic Committee announced March 3 that the games would go on as planned from July 24 to August 9 in Tokyo, but Japan’s Olympics minister also said they could be postponed until later in the year.
The $70 billion TV advertising business has been in slow decline as people cut the cord and shift to online viewing, and if not for the Olympics and 2020 election, TV advertising was expected to decline further in 2020, according to forecaster Magna. Longtime Olympics broadcaster NBCUniversal said it sold a record $1.5 billion in ads around the games.
“Live sports is what drives live TV today — [the Olympics] is still the most extraordinary live sports event,” said Barry Lowenthal, CEO of The Media Kitchen. “For that to go away will have a ripple effect across the industry.”
“The linear television business is perhaps more dependent on reality programming and sports than it has ever been before, and the Olympics is arguably the crown jewel of sports programming,” said Tim Hanlon, founder and CEO of Vertere Group, a consultancy that works with media and advertising companies. “If things change with the Olympic scheduling and presentation, that is a huge gaping hole in the NBCUniversal universe.”
Hanlon said attendance at sports events is becoming less important than TV audiences because of the piles of money that advertisers are willing to spend on live sports, where advertisers can count on viewers seeing their ads instead of fast-forwarding through them.
“Sports is increasingly becoming more of a television-first economic model while attendance and in-game experiences are secondary,” Hanlon said. “There is something to be said that television trumps everything — you’re talking about millions of viewers versus tens of thousands of in-person fans.”
Comcast said the virus’s impact would be minimal
NBCU said the impact on its business would be small. It has insurance to cover its investment. And a lot of clients’ Olympics ad packages, which range from $5 million to more than $100 million, would just be shifted to other parts of the NBCU ecosystem if the games are canceled, said a media-buying executive who has several clients advertising in the Olympics and works closely with NBCU. This exec also said the logistical challenges of relocating 15,000 athletes and the number of international sports broadcasting contracts make postponement unlikely.
“The Olympics are obviously on everybody’s mind. What I know is it’s full steam ahead,” NBCU parent Comcast chairman and CEO Brian Roberts said March 3. “There should be no losses should there not be an Olympics. [There] just wouldn’t be a profit this year.”
NBCU is riding on the Olympics to drive interest in Peacock
Still, the Olympics getting canceled or postponed would require the network to fill the airtime with new programming, which could leave them with a weaker lineup and dent ratings.
Further, it could hurt Peacock, NBC’s big bet to win back viewers who are fleeing to streaming services. Its planned April launch was timed to ride the wave of interest in the Olympics, said Adam Simon, SVP and executive director of strategy at UM’s IPG Media Lab.
The opening and closing ceremonies for the Olympics were planned to first be broadcast on Peacock before being aired to national TV audiences, and after the games end, NBCUniversal was supposed to air other types of live sports coverage like the Ryder Cup and NASCAR content on Peacock. Peacock has secured big launch advertisers like State Farm, Target and Unilever.
Asked for comment on Peacock, NBCU said there was no impact on its Olympics preparations as of now.
On the other hand, Vertere Group’s Hanlon said NBCU might use an Olympics void to promote Peacock, including airing content slated exclusively for the service on national TV.
“If Olympic content were delayed or evaporated, it potentially could be a creative opportunity for NBCUniversal to kill the lost time with things that promote Peacock,” he said.
But that’s a big “if.”
“While Peacock has its fair share of content, the Olympics were seen as the primary launch tent pole for the service, which might struggle to gain immediate traction without them, as the last in a long line of streaming launches,” Simon said.
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