Scrapping the Olympics Playbook
The Olympics are such a television ratings juggernaut for NBCUniversal that rival U.S. networks have always watched from the sidelines, airing reruns and other cheap programs that are not going to attract many eyeballs.
But not this year.
With a growing number of people now viewing shows on-demand, CBS Corp (CBS.N) and Discovery Communications (DISCA.O) for the first time plan to pit new or popular shows against the global sporting event.
CBS, for example, will debut a scripted series about politics by the creators of hit show “The Good Wife.” Not to be outdone, Discovery is bringing back its popular series “Naked and Afraid XL” — a reality show where contestants must survive in the wilderness for 40 days with only one or two items.
Those decision show how quickly changing viewing habits are forcing media companies to reassess old ways of doing business to keep audiences engaged, and compete with on-demand programming from the likes of Netflix Inc (NFLX.O).
Also helping matters is that August — when the Summer Olympics airs this year — marks the all-important back-to-school season when retailers spend big advertising dollars on TV commercials to market their clothes and school supplies.
“It used to be that we would just do enough programming to keep the lights on during the Olympics,” said Michael Greco, executive vice president of programming and research at Discovery. “That discussion has completely changed.”
This year’s Olympic Games in Rio de Janeiro is expected to draw more viewers than the record 217 million people who watched the 2012 London games because they will take place with just a one hour time difference from the heavily-populated U.S. east coast.
While CBS and Discovery recognize that many people will watch the games, they are also betting they will tune into shows using video on-demand (VOD) or apps from networks or cable companies that stream programming.
“People have so many more options to catch up on these shows,” said Kelly Kahl, senior executive vice president at CBS Primetime. “Today, it doesn’t feel like you have a losing battle against the Olympics.”
The summer programming strategy comes with risks because not all viewers are using, or have access to, video on-demand. Fifty one percent of U.S. cable subscribers used VOD in the past month in 2015, up from 34 percent in 2010, according to Leichtman Research Group.
That’s why many networks, like Fox Broadcasting, have scheduled new shows to end before the Olympics, said Dan Harrison, head of scheduling at Fox Broadcasting, a division of 21st Century Fox (FOXA.O). Representatives at other networks, including Walt Disney Co’s (DIS.N) ABC, did not return requests seeking comment on their summer programming.
Still there are advertisers, such as retailers who want to get in front of customers for back to school season, that are looking for opportunities to advertise, according to Krista Lang, executive director of media and analytics at Atlanta-based ad agency of at 22squared. This is particularly true for advertisers who did not want to pay for the premium to run ads on NBCU during the Olympics, she said.
“ALL IN” vs THE OLYMPICS
CBS is debuting two new original scripted series this summer, “BrainDead,” a comedic-thriller set in Washington, D.C. and “American Gothic” a murder mystery drama. Both start in June and will run through the Olympics.
Similarly, Discovery Channel plans to run 23 hours of new programming during prime time when the Olympics airs. That is up from nine hours four years ago, said Discovery’s Greco.
The network is also going head to head with the Olympics with “Seven Countries in Seven Days,” where different shows on the network will take place in different countries in order to tap into the international spirit of the Olympics, according to Greco. For example, the network will air an episode of “Treasure Quest,” which features treasure hunters, in Brazil.
“We are definitely all in over the Olympics,” Greco said.
(Reporting By Jessica Toonkel; editing by Edward Tobin)