NBC Seems To Have Learned The Wrong Lesson About Scarcity

from the an-olympic-gold-in-misunderstanding dept

Wed, Aug 20th 2008 5:34am — Mike Masnick

Of the various television companies, NBC Universal has always had the most trouble grasping the basic economics of scarcity and abundance, so perhaps it's no surprise that it's still misinterpreting the data that shows its mistake in trying to stop anyone from watching any of the major Olympic events live online. Instead, it forced people to wait until it was aired, hours later, on TV. This is leading to massive frustration, as people hear about various events, but can't see them for a while. Stunningly, NBC Universal boss Jeff Zucker seems to think this is a good thing, claiming:

"There's no question we did the right thing in holding the opening ceremony to air in prime time on NBC that night. The excitement that built out of word of mouth that the opening ceremony was the most spectacular thing that people had seen, that China had wanted to make a statement and they made a statement and people wanted to see that."

Read that a few times and spot the logical inconsistency. He's basically saying that by forbidding people from seeing the content and frustrating them, it built up word of mouth excitement. Apparently, it hasn't occurred to him (despite what his own data suggests) that another way to have built up word of mouth about the events would be to show them so that people could watch them live and tell their friends about it getting them to go see it when it gets rebroadcast again in prime time.

At the link above, Chris Matyszczyk, lays on the satire in responding to this view that forced deprivation breeds word of mouth demand:

So one assumes, given that this strategy has been so successful, the next time NBC's cameras exclusively witness, say, an assassination or a politician saying or doing something nutty, they will keep it to themselves until prime time comes along. You know, just to build up the excitement.

Let's hold NBC to this standard, shall we?

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: olympics, scarcity
Companies: nbc universal

34 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

eleete, 20 Aug 2008 @ 5:45am

Did he just say....
Assassination huh ?
[ link to this | view in thread ]
Thomas, 20 Aug 2008 @ 5:49am

GoodWill
And of course they don't realize that people will hate them for delaying the broadcast.
[ link to this | view in thread ]
W4RM4N, 20 Aug 2008 @ 5:55am

Where Did They See it?
The excitement that built out of word of mouth that the opening ceremony was the most spectacular thing that people had seen
...
So where did they see it if it wasn't live on NBC? (sarcasm) Is he admitting that where they saw it benefits NBC?
[ link to this | view in thread ]
Spin Spotter, 20 Aug 2008 @ 6:20am

The means justify the means
IMHO the president of NBC is claiming success to validate his own policies and opinions (aka the subject line).

Of course he is going to defend his strategy, no matter how many gaps others see in his strategic plan. He is not going to come out and publically admit missed opportunities or outright failure. American Media does not see it's own faults. If they did, we would call them CBC or BBC and not NBC or any other American media corporation. We Americans, with our current legal system, could claim insanity to admit culpability to any public failure. Corporate presidents and CEOs especially fall into this category. If they admitted failure publically, they would find themselves out of a job before the comments hit the news wires.

In this day and age of the Internet, satellite broadcasting and other forms of communication; why would consumers decide that they must rely solely on NBC for entertainment? There are other broadcasting organizations around the world who do offer streaming video in real-time of the Olympic events. (UK, Canada, Germany, France...)

If consumers really want to send a message to NBC about how effective their strategies are, watch an international competitor's site and shun NBC. No matter how you spin negative numbers, it will still be a negative number and even all the spin the CEO hypes will still be seen on the bottom line of the fiscal balance sheets.
[ link to this | view in thread ]
Longfellowx, 20 Aug 2008 @ 6:33am

Settle down kids
Aren't we overreacting a little bit to a delayed broadcast? While you could question NBC's decision to withhold certain events until primetime, for them, the numbers have worked out spectacularly. In this age of media overabundance, it's remarkable how much unifying attention NBC and the Olympics have gathered. Credit Michael Phelps and the American gymnasts, but you can also credit NBC for ensuring that many of the most anticipated sporting events happened live in American primetime. I'm not sure what this last character is talking about with "spotting spin." NBC has made a killing on these Olympics. If you expect them to change their strategy after Beijing, you will almost certainly be disappointed.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 6:37am

I think the Author underestimates NBC
When has TV ever become about good TV programming? NBC, CBS, ABC, Fox, etc... Have always been about selling advertising and instead of putting on quality programming. The Olympics = big advertising dollars. While many of us would rather watch our normal programs instead of the badmitten matches it really dont matter so much to the Execs. The Olympics are going to get higher ratings then any of NBC's normal programming. So the execs are obviously happy because they are making a killing off of the advertising.

This of course was the phony statement NBC released to the public: "There's no question we did the right thing in holding the opening ceremony to air in prime time on NBC that night. The excitement that built out of word of mouth that the opening ceremony was the most spectacular thing that people had seen, that China had wanted to make a statement and they made a statement and people wanted to see that."

In reality this is what he would have said, "We have sponsors doing backflips trying to get their spots on during the Olympics. We stand to make millions on this one. I wish the olympics where held every 6 months. We had major sponsorship for the opening ceremonies and the money will be rolling in for most all of the Olympic content. I just couldnt be happier that NBC is carrying the Olympics. If we lose a few viewers by flooding the programming with Olympic content it wont really matter. Chances are the viewers are going to come back when its over. You cant make an omlette without breaking some eggs.
[ link to this | view in thread ]
Magnanimous Cowered, 20 Aug 2008 @ 6:50am

Delay?
Delayed by hours? C'mon, I had it downloaded within a half hour of the original broadcast.

Piracy...once again providing content where content providers refuse.

NBC == fail
[ link to this | view in thread ]
Mark, 20 Aug 2008 @ 6:51am

Thankfully I live near Canada
I watched the opening ceremonies on Canadian TV Live! Living in the Detroit area you can get Channel 9 out of Windsor over the air and all cable companies carry it. It's great. It's like the coverage of the Olympics when I was a kid. They spend time on each sport, good commentary and relevant information. As opposed to the NBC version tailored to people with 30 second attention spans and "introspectives of what the first coach had for breakfast when the athelete was 10 years old" flash back crap.
[ link to this | view in thread ]
MadJo (profile), 20 Aug 2008 @ 6:53am

NBC was not the only provider...
I've heard from a number of people that they downloaded it off of bittorrent after it was fully aired in other countries, because they couldn't wait until NBC finally showed it on the web or on tv.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 7:06am

Re: NBC was not the only provider...
Wait, hold on a second here. So what you're saying is that people illegally download TV shows from the Internet? I'm shocked! Shocked I say!
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 7:14am

If they have exclusive access
If they exclusive video of an assasination say, they would be entirely likely to hold as long as they could. Using teasers into every commecrcial to maintain viewers and build excitement. They may not hold the story of an assasination attempt, but if they had the ONLY exclusive video of said attempt, my guess is they would milk that cow as long as possible.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 7:20am

The Olympics are happening?
[ link to this | view in thread ]
A nonny Moose Cow Herd, 20 Aug 2008 @ 8:01am

Re: If they have exclusive access
... and then spend the next 744 hours pontificating and postulating and commenting on the foot attire of the passers-by, etc. Just like good old OJ Simpson, Anna Nicole Smith and Brittney Spears before then.
[ link to this | view in thread ]
deadzone (profile), 20 Aug 2008 @ 8:38am

Re: Re: NBC was not the only provider...
I'm sorry? Are you implying that we have to pay the watch the Olympics on NBC? Wow, I did not know that!

How is it an "illegally downloaded tv show" if all they did was essentially time-shift not unlike what most of us do everyday with our DVR? It's not Pay-Per-View or On Demand or something like that.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 8:45am

DONT WATCH THE STUPID OLYMPICS, ITS ALL A FARCE ANYWAY!

BOYCOTT!!!
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 8:46am

China doctored the ages of their gymnastics to show they were over 16 when in fact they are younger.

The Olympics are FIXED!
[ link to this | view in thread ]
bshock, 20 Aug 2008 @ 8:47am

I know it's the principle of the thing, but...
You people still give a good healthy bowel movement about the Olympics? And you watch network tv?

You really are hopeless.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 8:50am

network TV is for losers that have nothing better to do then watch commercials since at least 50% of it is advertising!
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 9:31am

Re: Re: Re: NBC was not the only provider...
IANAL, but I'm pretty sure that downloading television content from BitTorrent or other non-owner-sanctioned media is illegal. Do you honestly think that just because the Olympics isn't pay-per-view or on-demand, that NBC wouldn't believe that their copyright was being violated by unauthorized Internet downloads? If that's the case, the original post would be a non-issue because people would be able to just download the videos from YouTube or their preferred video source.
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 9:35am

NBC owns the Olympics? I don't think so, not that it matters, its become corrupted anyway.

Keep your Olympics, I don't want it!
[ link to this | view in thread ]
Eskimo Heel, 20 Aug 2008 @ 9:36am

NBC, BBC, and the Olympics
On what must be a related issue, I was reading today the BBC web site story on Usain Bolt's new world record win in the 200M race. However, the site reported the video of the race was "not available in my territory". Is this because NBC wants to to only see the event on its show tonight, 10 hours late?
[ link to this | view in thread ]
johnr, 20 Aug 2008 @ 9:41am

NBC's Olympic lead medal
I live in the UK and, after reading this oh boy do I appreciate the BBC (live and online coverage).
[ link to this | view in thread ]
Anonymous Coward, 20 Aug 2008 @ 10:09am

Why do you even care, Mike? This has been happening for years. You act like this is a new development. Just like the fact that the Chinese aren't going to change all of their laws for the Olympics. Time and time again you prove to be clueless to reality. Sure everyone on your site would love to watch the olympics on the internet, but I am guessing most people would rather watch it on their large TV than their little (in comparsion) computer monitor.
[ link to this | view in thread ]
m, 20 Aug 2008 @ 10:16am

I live on the west coast, and every single event was delayed by at least three hours. Many events, like gymnastics and track and field were delayed across the board by 10+ hours! Why not broadcast the live coverage, and then offer rebroadcasts? This way those who can watch it live are able to, and those who either want to re-watch an event, or need a prime time slot have access as well.

Part of the fun of watching the Olympics is the suspense of competition. It's not just about computer generated fireworks and lip-syncing singers. As much as I tried to avoid any media coverage, it was still easy to bump into the information if the event happened over 3 hours ago. NBC ruined the fun of watching the Olympics because more often than not, I already knew the outcome of the events.

Forcing everyone to wait until NBC decides to air the events in order to increase their ratings is despicable. They've held the Olympic games' US audience hostage.
[ link to this | view in thread ]
Hulser, 20 Aug 2008 @ 10:21am

Re: NBC, BBC, and the Olympics
Is this because NBC wants to to only see the event on its show tonight, 10 hours late?

Yes, in fact I think that this is one of the main points of the original post, that NBC wants to prevent anyone in the US from viewing the events in any way other than on their authorized TV channels. The problem with this is, of course, having the exclusive rights to show the Olympics (or any event, really) ain't what it used to be. Given the various outlets made available by the Internet (and exacerbated by the time difference between the US and China) people know that the content it out there, so of course they want to see it. Maybe 20 years ago, it was easy to lock down your "exlusive TV rights", but today you get increasingly silly tactics like the BBC site blocking video when accessed by the US.
[ link to this | view in thread ]
bhahahaha, 20 Aug 2008 @ 10:24am

N.o
B.loodthirsty
C.orporations

!!!!lulz
[ link to this | view in thread ]
Mike (profile), 20 Aug 2008 @ 10:33am

Re:
Why do you even care, Mike?

I care because NBC is doing something stupid and could be doing a better job, serving its viewers and advertisers better -- and they seem to not realize it.

This has been happening for years.

And thus I shouldn't be allowed to talk about it?

You act like this is a new development.

No, I'm quite familiar with how long it's been going on. I'm just pointing out why it's wrong.

Time and time again you prove to be clueless to reality.

Which reality would that be? The one where NBC is pissing off a bunch of folks?

Sure everyone on your site would love to watch the olympics on the internet, but I am guessing most people would rather watch it on their large TV than their little (in comparsion) computer monitor.

I wasn't saying the should necessarily broadcast it only on the internet. I was saying they should broadcast it live ON TV, and then they can replay the stuff in prime time again if they're so concerned about people watching in prime time.

The point is that a lot of people are unable to watch what they want when it's live -- which is when most people enjoy watching sporting events.
[ link to this | view in thread ]
Nobody, 20 Aug 2008 @ 10:39am

Re:
My 52" wide screen high-definition screen IS my computer monitor for watching dowloaded videos.
[ link to this | view in thread ]
OC, 20 Aug 2008 @ 10:43am

That's like rule 3 in Brockian Ultra-Cricket.

Ref: http://en.wikipedia.org/wiki/Brockian_Ultra_Cricket

Rule Three: Put your team and the opposing team in a large field and build a high wall round them.
The reason for this is that, though the game is a major spectator sport, the frustration experienced by the audience at not actually being able to see what's going on leads them to imagine that it's a lot more exciting than it actually is. A crowd that has just watched a rather humdrum game experiences far less life-affirmation than a crowd that believes it has just missed the most dramatic event in sporting history.
[ link to this | view in thread ]
Greg, 20 Aug 2008 @ 10:52am

Games vs Ceremony
Remember we are talking here about a ceremony and not an olympic event. By in large most of the viewing audience that NBC is coveting would be able to tune in during primetime hours versus non-prime. Yes there is a percentage that would be outraged not to see it live and have the means to watch it on the web or what have you, but based on the spectacle of the whole thing I think it made for better viewing while relaxed in front of the TV. People seem to freak when things are not nicely dropped in our time zone live, but there is a big difference between here and China. I'm sure if everything was beamed live, we'd hear complaints about having to watch at weird times. You can't please everyone, but networks need to please advertisers because, well, it's a business.
[ link to this | view in thread ]
Craig, 20 Aug 2008 @ 11:24am

Re: Games vs Ceremony
[...] but networks need to please advertisers because, well, it's a business.

Yes they do need to please advertisers, by making sure that eyeballs are firmly glued on the set ready to absorb the commercial messages. However, you don't make viewers happy by limiting their choices or their access to programming. You can't have one without the other!
[ link to this | view in thread ]
m, 20 Aug 2008 @ 2:37pm

Re: Games vs Ceremony
Greg-
It's not just the ceremony that was delayed. Practically the entirety has been broadcast on a delay. Some events already work out to exist in prime time. If they are happening in the morning in Beijing, they're happening in prime time in the US, but even those events were aired delayed if you don't live in EST. They could have easily been aired live.
[ link to this | view in thread ]
peterK, 20 Aug 2008 @ 3:17pm

If I read a headline saying who won a match
I simply will not sit down for 2 hours to see the result I was already made aware of... Just by hitting Yahoo mail, cnn or many other online channels I knew what happened
[ link to this | view in thread ]
Anonymous Coward, 21 Aug 2008 @ 11:44am

#16

http://www.foxnews.com/story/0,2933,407803,00.html
[ link to this | view in thread ]