NBC Reverses Declines by Embracing Behavior Changes

Written by on August 26th, 2008

Social media, online community, interactive websites provide businesses new opportunities

A central theme of my book Internet Dough is that the behavior of consumers have significantly changed by the introduction of practical, compelling and in most cases free services on the Internet.

It doesn’t seem that long ago that we were having to discuss “who provides the Internet?”, “Why is it free?”, “Who then pays for it?”  Later there were hours and hours of discussion about not putting personal information online and or using ones credit card.

All that started to change in 2004 as social media in the form on online communities, photo sharing sites and even ecommerce sites became more interactive and engaging.  Since that time, businesses of all types started to introduce Internet strategies to:

  1. Allow customers to “self serve”
  2. Deliver services faster
  3. Offer new products and services
  4. Reduce costs to the consumer
  5. Cut costs

In the process, by adopting Internet strategies companies world wide collectively began to change the behavior of consumers.  The more practical web based services offered, the more time consumers spent on line.  Today, according to a Time Magazine study, consumers are spending an hour more online per day than they do watching TV

NBC risks ONE Billion dollars!

No one understands the behavior of their consumers are changing more than NBC.  With nearly a billion dollars invested in paying for the rights to the Olympics and the cost to produce it, it had a lot at stake in order to get a return on their investment.

One of their many challenges was figuring out how to embrace the Internet and use it as a vehicle to drive more viewers to the TV.  With all that money at risk, NBC did the unthinkable! They made the decision to deliver 2,200 live hours of the Olympics at their NBCOlympics.com website.   Instead of ignoring a growing consumer demand for web based information, they decided to not only offer it, but find a way to drive viewers back to their TV.  The results were incredible. The site served up 1.2 billion pages and 72 million video streams as of August 23rd 2008.   (according to NYTimes article by Brian Stelter).

There is another side of this story and a lesson all business owners need to understand.  If you don’t move rapidly toward a companywide Internet strategy, you risk losing your market share and mindshare of your customers.  Why?  Read on!

Yahoo and AOL play for free!

We just discussed what NBC had at risk right?  But other  new media channels had virtually (pun intended) nothing to lose.  Both Yahoo and AOL were free to offer photos and stories about the Olympics (NBC had exclusive rights to video) .   Neither had anything at risk?  Nothing!  Yet Yahoo’s website delivered nearly the same viewership numbers as NBC.  In fact according to Nielsen, the rating company, Yahoo drew an average of 4.7 million unique visitors a day through Aug 18th compared with 4.3 million for NBC. Even AOL’s Olympic coverage pulled 1.3 million visitors a day.

Had NBC made a corporate decision to say the Internet was going to reduce viewership, they would have left open a HUGE demand that would have gone exclusively to Yahoo AND AOL for their Olympic news and information. Plus, they would not have had an opportunity to use the Internet to drive viewers back to their TV sets!

There is no going back!

Broadband, social media, practical services and a sundry other things have changed the behavior of consumers FOREVER. There is no going back to the days of Ozzie and Harriott.  The cats out of the bag, the horse has left the barn and the train has left the station.

Your customer’s behavior has changed.  And it’s not only changed but it’s changing faster than even the experts can predict.  According to Jimmy Pitaro, head of sports and entertainment for Yahoo, “The demand that we’re seeing has far exceeded even our wildest expectations!” If Yahoo, who is completely focused on the Internet, is wowed by consumer reaction to a service they delivered, you’d better take notice and begin building a comprehensive Internet strategy for your company before you become irrelevant to your customers!

Kudo’s to NBC and team for adopting a cross platform strategy!

So the burning question is…. “Did the web steal from their TV viewership?”  That’s the 64,000 dollar question, and on the surface the numbers say no!  From the sources I could find, viewership was running an average of 10 percent higher than the Athens Olympics.  (30.8 million vs. 26.4 million)

It takes guts to put a billion dollars on the line.  More guts to make decisions that could “gut” your investment.  But the point I’ll leave you with is the reminder, “If you don’t do it, someone else will!”

So what’s your thoughts?

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