Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.bonus From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: bonus Tue, Aug 11 1992 Date: Tue, 11 Aug 92 04:32:26 EDT Message-ID: 08-11 0000 BONUS: Triplecast is big loser USA TODAY Update Aug. 10, 1992 Source: USA TODAY:Gannett National Information Network The Olympic ideal of sport for sport's sake rather than financial gain appears dead on the playing fields of the world. Not at NBC. In Barcelona, Spain, NBC produced one of the most watchable Olympic Games in memory, using its six- to nine-hour time advantage to pare away the tedious and give viewers the most compelling competition and human stories. DID NBC MAKE A PROFIT? The network that came through for viewers and advertisers flopped for shareholders of parent company General Electric: Losses from the network broadcast and NBC's Triplecast pay-per-view experiment on cable TV are expected to hit $100 million and could go higher. "The first lesson," says former CBS sales chief Jerry Dominus, "is that if you've got great stuff to show people, they will still come sit down at their TV sets for two weeks. The second lesson is: Think twice before you assume people will lay out a lot of money for something they can already see for free." WAS THE TRIPLECAST NBC'S ONLY PROBLEMS? The network clearly overpaid for U.S. TV rights to the Games. When bidding took place in 1988, NBC's $401 million bid topped that of rival CBS by an astounding $51 million. ABC was never a factor. NBC's 209 affiliate stations agreed to help the network, allowing it to raise $30 million the next three years by selling commercials during air time normally reserved for the local stations. WHERE DID THE TRIPLECAST IDEA COME FROM? NBC tried to hedge further with Triplecast, a 50-50 venture with Cablevision Systems of Long Island, N.Y. The two came up with the idea for 1,080 hours of Olympics coverage - three channels of commercial-free, round-the-clock Games that would dwarf the 161 network hours shown free by NBC. The network moved $100 million of its $401 million rights payment over to the Triplecast's books and got Cablevision's promise to split losses up to $100 million. WHAT WERE THE EXPECTATIONS FOR THE TRIPLECAST? The partners hoped for 3 million Triplecast subscribers at a pricey $125 each. But by some estimates, they got no more than 165,000 sign-ups for the full 16-day package. "They must have been hit by sunspots when they dreamed that up," says Dominus, a senior vice president at J. Walter Thompson ad agency. "There aren't enough sports bars in America to make that work." DID THE TRIPLECAST UPSET ANY GROUPS? NBC alienated its affiliates and advertisers with Triplecast. The affiliates were furious when the network used its Barcelona broadcasts to promote the Triplecast, then allowed cable viewers to sample the Triplecast free for two days on CNBC. Advertisers wondered aloud why they shelled out up to $335,000 for a 30-second prime-time ad only to have NBC tout its commercial-free cable coverage. DID THE TRIPLECAST HELP ANY GROUPS? Oddly, the Triplecast appears to have helped the affiliates. "The network spent all that money promoting Triplecast, but in the end, people who were turned on by the Olympics decided to go where they always go for the Games - to broadcast," says Jim Waterbury, general manager of KWWL-TV in Waterloo, Iowa, and president of the NBC affiliates group. "Triplecast was a tremendous thorn in our sides, but (promotions for it) helped increase our viewership by 10% to 20%." HOW DID AD SALES GO? The network stemmed the tide of red ink with a heroic effort by its advertising sales team. In the midst of a three-year advertising slump, NBC generated an estimated $500 million in ad revenue, leaving it with about $425 million after paying sales commissions. A 30-second commercial cost advertisers $200,000 to $335,000 during prime time, $150,000 for a weekend afternoon spot, $65,000 for a weekend morning, $55,000 for late night and $30,000 for a weekday morning. WHAT DID NBC DO WITH UNSOLD TIME? Left with some unsold commercial time on the eve of the Games, NBC rewarded its biggest customers, such as Coca-Cola, by letting them run ads free or at deep discounts. NBC filled other unsold time with GE ads for which the parent company paid little or nothing, according to trade magazine Advertising Age. WERE ALL ADVERTISERS HAPPY? Some advertisers criticized NBC for overcommercializing the Games. At prime time, the network shoehorned up to 18 minutes of ads into each hour, vs. the normal 12 minutes to 14 minutes. And the line between commercials and coverage was blurred by the network's decision to have host Bob Costas introduce music videos tied to a Coca-Cola marketing promotion. WHAT WERE THE RATINGS? NBC did deliver for advertisers. During prime time, it guaranteed them a 16 rating, equal to 14.7 million households. Ratings, especially the first week of the Games, comfortably exceeded the guarantee. A prime-time ratings average of 17.5 means NBC probably will not have to make refunds to advertisers in the form of free or discounted commercial time. NBC averaged a 17.8 rating in Seoul, South Korea. But network executives note that the Barcelona Games faced stiffer competition from cable TV and the Fox network, more formidable now than in 1988. IS THERE A PRESTIGE FACTOR? Network executives argue that it is impossible to place a dollar value on the prestige and marketing push NBC got from the Games. NBC was able to showcase a talented corps of sportscasters, pepper its Olympics broadcasts with promotions for its fall program lineup and keep viewers from tuning in to the competition. DID NBC LEARN FROM 1988 GAMES? Industry observers say NBC obviously learned painful lessons from its widely criticized coverage of the 1988 Summer Games. Costas proved more popular and upbeat than Bryant Gumbel, who treated the Seoul Games as a news event rather than a sporting spectacle. Female viewers, in particular, responded to the network's decision to load its first week of prime-time broadcasts with coverage of swimming, diving and women's gymnastics. DID THE RATINGS STAY HIGH? NBC's ratings tumbled the second week, but they remained impressive considering disappointing finishes by highly touted stars such as decathlete Dave Johnson and gymnast Kim Zmeskal, the absence of a single close game for the U.S. basketball Dream Team and the lack of a Cold War rival to stir U.S. nationalism. WILL THE PRICE OF THE TV RIGHTS GO DOWN FOR 1996 GAMES? Despite NBC's steep losses, Olympics organizers hope to peddle U.S. TV rights to the 1996 Summer Games in Atlanta for $600 million - a 50% increase. The Triplecast is unlikely to resurface, but the network that wins the rights to the Atlanta Games almost certainly will have a cable partner. ABC likely would pair up with its ESPN all-sports channel. NBC or CBS likely would team with Atlanta-based Turner Broadcasting. Bonus Editor: Ed Kelleher. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM