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Guest Opinion: NBC Vs Internet ?

NBC's television ratings in the US are the lowest in the history of Olympic broadcasting. Are we at a watershed in media technology - and of the Olympics themselves ? Adam Bogacki Writes from Sydney.

The situation is in fact a bit more complex.

Jonathan Klein, a “former high-level executive at the American CBS network” has staked $US35 million in venture capital on a new web site known as FeedRoom which recently made it’s public debut offering users television-style news reports on the Internet in bits which can be put together as personalized newscasts. Yahoo has a similar offering, as does another newcomer, Zatso.com. (‘I.T.’ section, Sydney Morning Herald, 22 August 2000, sourced, undated, from the New York Times).

These services are based on the assumption that consumers want information/entertainment on demand and that high-speed broadband will deliver it. Klein predicts that the new style of newscast will replace the traditional TV networks.

Those reports will be provided by stations around the US that contracted to provide video to FeedRoom, which in turn will share advertising revenue and design their web pages. Klein recently announced an agreement with NBC television, among others.

NBC is also involved in joint ventures with MicroSoft (eg. MSNBC). It is therefore very much a player in this area although, as Jay Ireland, President of the NBC group pointed out, “we still have a very large, successful broadcast business that we have to continue to run and grow”.

This provides some background to it’s legal injunctions against local Sydney media, preventing them uploading streaming audio and video of Olympic events in order to protect rights it has paid the IOC more than US$1 Billion for. This, however, has not prevented it achieving historically low ratings in the US for an Olympic television broadcast.

NBC’s need to recoup this investment has forced it to use delayed broadcasts in US prime time. However, people in the most wired nation on earth have been overcoming the time difference of eight to twelve hours by using the Internet, Canadian television, and other sources.

It is difficult to see how NBC’s injunctions could have ever worked. Given the mass marketing of digital video and audio equipment, it is doubtful that the authorities would risk disruption of the Games by confiscating them from the crowd. The Internet, also, has its own dynamics.

This issue has become a watershed not only in broadcast media but also in the business model underlying the Olympics themselves.

Atlanta was the first time the Olympics had a web site. Sydney has demonstrated the limitations of the current media model and the rate of change in the technology underlying it (eg. VHS-quality video via 56K modem is now possible http://pcworld.idg.com.au/lcd). These developments will have progressed further by the time of the Athens Games.

They will also confer unprecedented bargaining power upon the main players in negotiating conditions for future Olympics, creating an opportunity for reform of the current structure, especially the IOC.

As noted before, there are many reasons to believe that the Olympics as we know them have reached some kind of logical end, the rationale for their reform having been spelled out by others (Jennings, 1996). This reform would principally involve removing an unaccountable and self-perpetuating IOC from the rest of the organization and replacing it by professional and transparent management.

However, whether this will be the goal of the major players remains to be seen.

In the meantime, NBC’s impending losses suggest that the value of the Olympic franchise has declined. We live, after all, in an era not only of changing technology but also of a generation which increasingly has more knowledge and information at its fingertips than ever before. It is used to receiving data, images, and voice instantaneously rather than traveling half way around the world for the privilege.

This has been a major problem at these games. Many small business people have noted that things were very quiet until the second week when things were already starting to wind down. Overall, the flood of big-spending tourists who were expected to arrive weeks, if not months before the Games – and travel around Australasia around for months later – have simply not happened

In some ways this has been the fault of SOCOG and other Games boosters who, after the ‘arrogant incompetence’ of Atlanta, have used the repeated mantra of “the best Games ever” to set the benchmark. This has – over the seven years leading up to the Games – set off a gold rush among many people, particularly in the building sector. A piece in the Sydney Morning Herald once estimated that the city has undergone “the greatest period of development since the beginning of the colony”.

This has affected restaurants, hotels, pubs, and speculative high-rise unit development to the extent that Sydney has been estimated to have more restaurant seats than London or New York. Of course, it does not have the same demand - much of it fuelled by a steady inflow of tourists - and a rationalization of the restaurant industry commenced long before the Games with some well-known establishments changing name and ownership, notably the Ampersand at Cockle Bay.

Recent news reports have stated that hotels in Sydney are only “half-full”, as is the ‘New Amsterdam’, an ocean liner leased by SOCOG and berthed at Garden Island.

One does not have to be a Treasury analyst to see that such massive overcapitalization will lead to an economic downturn shortly after the games; it is length and dimensions unclear.

I have heard that the IOC has offered SOCOG the 2004 Olympics if they withdraw it from Athens. I have also heard that the Athens Organising Committee intends their Games to be a return to the principles of the ancient Olympics, running the marathon from Marathon.

It would be a pity if much-needed Olympic renewal were being undermined. In addition, can Sydney afford another massive diversion of its resources as the Australian dollar declines ?

Reference.

Jennings, Andrew. “The New Lords of The Rings.” Simon & Schuster, 1996.

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