While the costs associated with acquiring the rights to broadcast the Olympic games continues to climb each year, broadcasters are struggling to increase viewership in an increasingly digital world.
Although viewership for the Olympic games routinely finds itself in the billions worldwide, that number has stagnated in the past decade and broadcasters are now scrambling to find ways to ensure those numbers don’t decline and the Olympic games remains the largest sporting event worldwide.
It has been reported that NBC paid $963 million to acquire the rights to broadcast the 2018 winter games. That’s 24% more than they paid in 2014 for the Sochi winter games ($775 million). Although that’s an admittedly hefty price tag, the reputation of the Olympics means advertisers are still willing to pay for the coveted time slots during the games and NBC has reportedly already made close to $900 million in ad sales in 2018. That’s a record-breaking advertising profit, according to the network.
However, viewership for the Olympic games is declining. In 2016, NBC simultaneously streamed the games online in addition to its television broadcasting. Still, viewership combining both platforms fell 9% from the 2012 summer games, even with its added platform that was designed to appeal to the younger generation of viewers
In the US, NBC has already paid $7.65 billion for the rights to air the games through 2032. Yet, decline in viewership seems to be an unfortunate trend that will continue to unfold. With the United States having a well-known presence at the games and a landscape where television reigns supreme it is unclear how these trends will affect other countries especially as other countries, including the CBC in Canada, refuse to disclose how much they pay for the broadcasting rights to the Olympics.
Still, what all broadcasters will have in common in the coming years is the need to adapt to technological changes and a demand from viewers for more access across multiple platforms.
In 1992, CBC paid roughly $5 million to broadcast about 200 hours of Olympic coverage across one television station in Canada. Compare that to 2018 in which approximately 870 hours of coverage will be broadcast on television. Add that to approximately 2,500 hours of coverage that will be streamed across smartphones, tablets and computers. This means that in 2018 virtually every moment of the Olympics is available for viewing. So why are less people watching? It turns out, it might not even matter.
Andrew Billings, the director of the University of Alabama’s Sports Communications program remains optimistic. In an interview with CBC, he said, “The Olympics are that property that, even if the ratings are flat, in comparison to all other forms of television they will still be a very valuable product,” Billings says. “So I think [rights fees] could even go higher in the future.”
Billings is currently conducting a study, commissioned by the IOC, in which he is attempting to learn whether or not watching content on a phone or computer is driving viewers to watch content on television.
“When people go to Facebook or other non-television venues for Olympic coverage, does that make them more likely to watch more Olympics or does it mean they don’t feel the need to consume that larger television product?” Billings says. “The IOC is very interested in this because a bulk of their revenue comes from television contracts. And if those start to erode, they have to find a new financial model in order to exist.”
Even with changing trends and advanced technology, the Olympic games remains as one of the few events that can create big moments that dominate the media. With that in mind, the Olympics seem set to remain a lucrative venture for broadcasters and viewers alike.