Judges' tally: NBC scores historic online video numbers at Sochi Olympics, but will it bank on OTT viewers?

By Samantha Bookman

Olympics closing ceremonies

Winter Olympics closing ceremonies. (Courtesy of the IOC)

The Winter Olympics officially ended Sunday night, and the results for online video viewing are beginning to roll in. As expected, the Sochi Games were the most streamed Olympics ever, surpassing the London Olympics--not a surprise, as ownership of connected devices continues to rise steadily and demand for over-the-top viewing rises with it.

Without implicitly saying so, NBC Sports made its online video coverage, via its authenticated Live Extra app and nbcolympics.com website, a feature within its ratings reports. And it needed to. TV ratings for the Sochi Winter Olympics were down 9 percent from the 2010 Vancouver Games, according to The New York Times, and both the opening and closing ceremonies had lackluster ratings. The network used the 2006 Turin Games as its ratings benchmark rather than Vancouver in nearly all of its reports during the event, a telling move.

NBC Olympics

Live Extra Olympics event highlights. (Courtesy of NBC Sports Group)

At the same time, Live Extra streaming saw its biggest viewership, enough to make at least a small impact on global Internet traffic. Akamai said that traffic during the U.S.-Russia hockey match in the first week of the Games reached 1.6 Tbps; on Feb. 19, during hockey quarterfinals featuring the U.S. vs. Czech Republic and Canada vs. Latvia, traffic peaked as high as 2.5 Tbps.

What are the game-changers to note here? In 2012, the London Olympics not only marked the first time NBC really took online video streaming seriously--offering almost all the events over Live Extra--but the analytics took note of a sea change in how viewers took in online video.

"NBC's final tally of online video viewing noted that users averaged 111.4 streaming minutes per viewer on the Web, and 94.3 streaming minutes per viewer over one of its two streaming apps: Live Extra or NBC Olympics," we noted in a post-Summer Olympics feature. "And PC users spent an average of 30 minutes per visit on NBCOlympics.com, well up from 2008, when 12.3 minutes was the norm."

If the last Games revealed that users were spending much more time viewing online video, this Games was a proving point for sheer demand. Users didn't consider the Live Extra app a side benefit to prime-time viewing; they expected it to provide at least the same coverage and similar quality to NBC's TV broadcasts.

Here's a few charts detailing some of the hallmarks of streaming video during the Winter Olympics:

TV viewership of the Games was lackluster, with 22.5 million viewers on average throughout the two-week event. Sochi sits squarely in the middle of the ratings between Turin in 2006 and Vancouver in 2010.

Average TV viewership of winter olympics

Live Extra streaming was the highest ever for any Winter Olympics, with 61.8 million unique users on its digital platforms, topping Vancouver by 29 percent.

Total unique viewers online winter olympics

According to an Akamai spokesperson, online video traffic peaked at 2.5 Tbps on Feb. 19, during the men's hockey quarterfinals. The U.S. vs. Russia hockey game on Feb. 15 saw a peak traffic rate of 1.6 Tbps, with figure skating and snowboarding finals running close behind at 1.3 Tbps.

By contrast, peak traffic during the 2012 London Games reached 873 Gbps during the men's 100 meter final on Aug. 5.

peak online video winter olympics

The Opening Ceremonies were not as popular in Sochi as in London: Procera said streaming of the ceremonies made up only 1 percent of total Internet traffic in the Southern U.S. while it peaked at about 10 percent of Internet traffic for one large cable provider in several Northern states.

Procera cable operator online viewing olympics

Hits on an unnamed large cable operator's regional U.S. network. Netflix (orange) takes the lion's share of bandwidth while Olympics online viewing (green) barely registers. (Source: Procera)

For mobile streaming, the host country showed a lot of continuing interest in the Games. In Moscow, LTE streaming stayed steady throughout the first week, according to Cam Cullen, vice president of marketing for Procera.

Procera mobile LTE olympics regional

LTE traffic in the Moscow area for Feb. 3 through Feb. 9. (Source: Procera)

Europe in general saw more streaming traffic related to Sochi than the Americas, according to Akamai.

Akamai olympics internet traffic regional

Cutaway of Olympics-related traffic by region during the first week of the Games, including Americas, Europe and Asia (Source: Akamai)

But Akamai's chart mirrored Procera's in that Olympics streaming traffic was a very small fraction of total Internet traffic.

Akamai olympics vs. global internet traffic

Cutaway of Olympics online traffic vs. total traffic rates worldwide during the first week of the Games. (Source: Akamai)

The devices

According to a 2013 Pew Research report, 91 percent of Americans own mobile phones, and 55 percent of those are smartphones. Additionally, 42 percent have a tablet computer. And while desktop computer ownership is dropping, from 68 percent in 2006 to 58 percent in 2013, they still represent a large part of online video viewers.

Pew Research U.S. device ownership

Seventy percent of U.S. adults have a high speed broadband connection at home, Pew says, although the survey didn't specify what connection speed defined broadband.

Pew Research broadband access US

The money

Despite touting its online video offering as an entertainment destination unto itself, NBC Sports sold just $50 million in digital ads for the Sochi Olympics. While that is double the amount sold for the 2010 Vancouver Games, it is far below the $800 million in national ad sales the broadcaster booked for Sochi.

NBC Olympics cost vs. advertising sold

Bloomberg's Joshua Brustein complained about the incessant repetition of the same ads over and over during online video ad breaks. "Seeing the same cluster of commercials repeated over an hours-long broadcast isn't unusual for sports fans. But what's merely annoying on television can be torturous for streaming video audiences, where the ad inventory tends to be far more limited." Yet, he notes, NBC claims it had no problem convincing companies to buy digital ads. "So with robust interest from digital sponsors, why are online audiences sitting through the same handful of ads from Coca-Cola, General Electric, and Proctor & Gamble on a Groundhog Day-esque loop?"

NBC reportedly hedged its bets on TV ratings for the Games in order to avoid disappointing ad buyers. "While NBC declined to comment on its ratings targets, media buyers said the network is making lower guarantees than in years past, setting a 12.6 household rating as the benchmark for Sochi," Adweek reported before the Games opened in early February. "The Vancouver Games averaged a 13.9 HH rating, per Nielsen live-plus-same-day data."

The broadcaster reported an average 12.3 national household rating for the Sochi Games overall, with Minneapolis, Salt Lake City and Denver as the top television markets.

The broadcaster isn't quite ready to rely on its online video product to carry it into profitability. It's understandable, considering NBC lost around $225 million broadcasting the Vancouver Games.  In Sochi, with its production costs hovering above $100 million and having paid $775 million for broadcast rights, NBC wasn't going to take chances on its ad sales.

Will that reliance on television ads carry through to the 2016 and 2018 Games? At this moment in time, that seems likely, considering that NBC shelled out $4.38 billion for 10 years of exclusive broadcast rights in the United States. But a lot can change in the online video landscape in four years. While digital ad sales in Rio will likely supplement national ad sales, as they did for Sochi, it's not far-fetched to predict that NBC will increase its total well beyond $50 million.

Judges' tally: NBC scores historic online video numbers at Sochi Olympics, but will it bank on OTT viewers?
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