NBC and the Olympics: Why Cord-cutting Will Be Slow and Hard

NBC’s exclusive U.S. coverage of the the 2012 London Olympic Games has not, to say the very least, been a hit in the tech world. Twitter has been buzzing since last Friday about NBC’s delayed showing of major events, endless commercials, insufferable commentary, cheerleading for U.S. athletes, mawkishness, sentimentality, and a hundred other sins. All of it is true, and all of it has marked coverage of every Olympics I can remember.

There are two important things new. One is the ubiquity of social media, which have grown tremendously since the 2008 Beijing games. Twitter, Facebook, and the rest give us a global water cooler where we can we can grumble and complain to anyone who will listen. The other  is the ubiquitous availability of streaming media on our phones, tablets, PCs, game consoles, and just about anything else with or connected to a screen.

The  combination has created a strange sense of entitlement among many of the tech savvy. who seems to feel it has a right to watch the Olympics live wherever  and whenever they want. The problem is that for all the quasi-governmental, nationalistic trappings of the games, the International Olympic Committee is a private organization to which NBC Universal, another private organization, has paid a grade deal of money for the rights to televise the games in the U.S. For reasons well explained by The Atlantic‘s Megan Garber, NBC’s economic interests lie with the status quo, and are likely to for some time to come. This bodes ill for those who are counting on the internet to disrupt the way television content is delivered.

First, no one has a right to anything other than over-the-air content broadcast by local stations. Some local stations offer streaming, but it’s only of their own content, mainly news, because that is all they own the rights to. Networks offer selected shows, either on their own sites or through service such as Hulu.com, but what they offer and when they make it available is entirely up to them. That is why calls for a Federal Communications Commission investigation of NBC’s delayed and mangled streaming of the Olympic opening ceremony were nothing more than venting.

The situation is not going to change as long as those who control the content don’t see cord-cutters, who who would rely exclusively on over-the-top delivery on the internet, as a major economic threat to their very lucrative relationship with cable and satellite operators on the one hand and content owners, such as studios and sports leagues, on the other. That is why they are taking only baby steps to stream their content, and why Olympic streamcasts and services such as HBO Go are available only to people who are already cable subscribers. (Of course, NBC’s relationship to cable is more than close; NBC Universal is owned by Comcast.)

Furthermore, the distribution of content is tied up in a maze of contractual agreements. ESPN, for example, has contracts with Major League Baseball, the National Football League, the National Basketball Assn., the NCAA, and the College Football Assn., among others, and each specifies just how the content may be distributed. These contracts will evolve, but slowly.

One thing that is absolutely clear is no matter what alternative means for delivering content are developed, you are going to pay for the good stuff. Like newspapers, television content distributors have not found an internet advertising model that works anywhere near as well as traditional broadcast or cable. In the future, you may be able to subscribe via the internet, but you are still going to pay.

I pay a lot of money for my Verizon FiOS video service and don;t really watch very much television. I sympathize with those who only want to watch Game of Thrones but are unwilling to pay for a cable subscriptions plus an HBO premium just to get the one show they really want to see. I don’t know that HBO will ever sell subscriptions to individual shows–it doesn’t suit their business model well. But I’m sure the time will come when you will be able to subscribe to HBO without going through a cable company.It’s just going to take a while, and that is more likely to be measured in years than months.

Maybe by 2016, we’ll be able to subscribe to live feeds of the Rio de Janeiro Olympics (Rio is just one hour ahead of Eastern time, so there’s not much of an excuse for delays.) I certainly hope so. But for the time being, we all need some patience.