Archive | May, 2015

When is US $4 billion+ not enough?

1 May




Follow the $$ trail.  It is complicated but interesting–and has a huge bearing on horse sport.

IOC gets $$ from selling TV broadcast rights to the highest bidder.
TV gets $$ from selling commercial spots, not merely on traditional TV but also online and other media platforms.
NBC has traditionally dominated the US television Olympic coverage. The US market represents a huge part of the $$ IOC gets. But NBC reportedly lost around $223 million on the 2010 Winter Olympics. Everyone was worried about 2012, part of their existing contract/bid.
In 2011, NBC, FOX and ESPN bid for TV rights once again. NBC won out with a monster US $ 4.38 billion bid—but spread that amount over the next 4 Olympics 2014, 2016 2018 and 2020.
Influenced by NBC’s longtime commitment-=-and loss the year before—IOC accepted the bid ( ESPN and Fox each bid over 1 billion for the rights to 2014 and 2016). But NBC had a plan to use social media to hype the Olympics, drive what turned out to be  38% more viewers to the TV—and a hefty percentage to its online platforms.

NBC discovered the effect of raising TV viewing spilled over in the most amazing (and lucrative) ways:
“”Archery is the new curling. It’s delivered an average of 1.5 million viewers making it the highest-rated cable sports, beating out basketball,” says Alan Wurtzel, head of research for NBC .
Yes, NBC has found a way in using social and online media to drive viewers to prime time to make money on old-media TV where it can charge the highest rates.
This got new sponsors to want commercial time—and they had to pay a lot more than those who had locked in their rate well before the actual air date of the Olympics. And of course, NBC, now owned by Comcast, is looking to cable for further profits. ““If you can add 20 or 30 million subscribers,” says NBC’s Neal Pilson, “and raise fees by 30 or 40 cents a sub, that’s significant money.”
SO more money .  dollar signs
Which is why IOC now is , um, pained that it accepted “only” 4+ billion $$ while “allowing” NBC to rake in huge profits.
IOC creates its own product coverage of the Olympics and sells the broadcast rights to various local markets that for whatever reason shave not bid already for exclusive rights. Olympic Broadcasting Services (OBS) is an agency of the International Olympic Committee, established in 2001 to be responsible for host broadcasting – the world feeds provided to all international broadcasters of the Olympic Games and Paralympic Games from 2008 on. Previously the host broadcaster role was delegated to the local organising committees or to third-party broadcasters. Then in 2008, IOC woke up and smelled the money.

Taking a page from NBC, it recently realized that social media and online media are key to getting more interest from potential sponsors/selling commercial time for ever more money.
And here we are—with FEI dutifully telling us the New Way To Go: more social media, more appeal to teenagers, more bling and emotion and circus and costume. More countries (because then IOC will then have more markets that might want to see a local boy or girl competing).
Because their own survey shows that 86% want to feel some emotion, not be hushed up and told to quietly appreciate the finer points.

Show jumping and eventing provide all of that (although eventing needs to stick with Pretty Pictures of course—no problems on XC)
Reining was fine before FEI and therefore drives its own bus. They have flowing manes, sliding stops, guys in cowboy hats and jeans, loud whooping crowds and announcers, music and costumed freestyles. Yup, they are in the driver’s seat!
Para is even better off—there is hardly any story/competitor in para equestrian who does not come with a true and heartfelt Story.

So that leaves dressage, the fusty old auntie in white gloves, sipping sherry, hushing everyone, clapping quietly at the end of the performance.

Maybe they have a point or two.
Just hope the beauty of dressage, the reality that it is the ONLY horse sport where welfare is truly paramount (don’t hit me, it is true) doesn’t go under the bus.