NBC's Olympics coverage, both on TV and online, hasn't won high marks. Business Insider writes that NBC's TV coverage is “ruining the Olympics for millions of Americans.” Harsh. Its Internet coverage is also unavailable to the millions of Americans who watch TV over the air, undermining NBC's position that broadcast television remains an important part of its business.
It seems that over-the-air viewers, who probably watch more ads per hour than DVR-addicted home theater types–not to mention cord-cutters and “Cable's Lost Generation“–are harder to monetize than cable, satellite, and telco video subscription customers. The idea of supporting programming through ad revenue is forgotten, and the kernel of justification behind similar schemes, like TV Everywhere, falls apart. Tying Internet video to cable subscriptions is a problem–but how can you justify this with content that is already available free over the air?
A few days ago, Consumerist put up a story titled “NBC Blocking Certain ISPs From Online Olympic Streaming.” As Karl Bode at DSL Reports clarified, NBC wasn't blocking access to certain ISPs per se, but only allowing access to certain “MVPD”(cable, satellite, etc) subscribers.
It's right there in the terms of use:
Access to portions of NBC Olympics live streaming and on-demand Site content (“Premium Content”) is available only to users in the United States who currently: (i) receive video service from a cable, satellite or IPTV provider that has partnered with NBC Olympics (each a “Distribution Partner”) and (ii) subscribe to a level of video service required by their Distribution Partner.
I'm not one of those people who think that the Internet is the only suitable model for content delivery. The one-to-many model of broadcasting and traditional cable is, at least, very efficient for live sports, national news events, and emergency communications–even with multicasting, IP networks are not as efficient at delivering the same content to many viewers simultaneously.
But, while there is a continuing role for one-to-many communication, it remains to be seen whether broadcasting has to be the technology that provides it. Maybe we should get rid of the TV broadcasters and buy everyone who depends on free TV a cable subscription? Thomas Hazlett has been beating this drum for years, and though PK might disagree with him on spectrum policy, he's dead-on right that huge amounts of spectrum are squandered on broadcasting. In fact, one reason that many TV stations exist at all is that cable companies must carry local broadcasters.
Still, I'm not convinced that broadcasting needs to join the optical telegraph and party lines in the annals of communications history. (Ok, maybe HD Radio does.) Spectrum policy is a complex topic, and too many people seem to be advocating a system that is designed to hand over spectrum from the broadcasters right to AT&T and Verizon. I doubt that would be a win for consumers. Not only can a sane spectrum policy accommodate broadcasters, in any event we're stuck with them, like it or not.
NBC definitely sees a future for its broadcast operations. While most of its lobbying on this topic is done through the National Association of Broadcasters, who can be very eloquent on the continuing importance of its members, NBC itself has defended the over-the-air model, which is “much better suited to the one?to?many distribution model in which video can be delivered to millions of users simultaneously in a given metropolitan area.” In the “Public Interest Commitments” issued to smooth the way for its proposed merger with Comcast, NBC stated that it “remains committed to continuing to provide free over-the-air television.”
That commitment only goes so far. In the new Internet ecosystem, over-the-air viewers don't count for much.