Why Even Fight, Customers Not Demanding Two Olympic Cable Channels

For a moment, put aside the fact that the USOC completely dropped the ball by announcing the launch of its Olympic TV Network without having the IOC on board, without previously working with other NGB’s to secure rights, and without some handshake agreement with NBC – the TV czar of all things Olympics. Even without these factors, launching this network is still a bad decision.

NBC partnered with InterMedia Partners for Universal Sports, a network essentially premised on the same strategy as Olympic TV Network. It fit well into NBC’s Olympic coverage, where NBC disperses events across a group of cable networks. However, the two years between Olympics remain somewhat of an abyss.

If ever there was a time to push the Olympic theme, I agree now is that time. Michael Phelps is still prominent in the public eye, Chicago is in the mix for the 2016 games, Bejing is still fresh in everyone’s mind, and a cable network can provide the marketing platform that Olympic sports desperately need to return to the mainstream. However, further segmenting an already small, niche audience is not typically a successful strategy. Neither is creating negative PR with in fighting among various governing bodies. The USOC-Comcast backed network launch may do more harm than good.

Clearly, with Comcast involved as an equity partner the network will get some distribution – replicating the recent strategy used by multiple sports networks to achieve wide distribution. But it goes against the current of the overall cable industry movement. Providers face a dilemma. Continuing to add programming increases MSO expenses, while competition from telcos and Internet viewers puts downward pressure on prices, squeezing profits at a time when ad dollars have disappeared. The proliferation of niche cable networks through the 1990’s and early 2000’s is not a sustainable business model for cable because none of these networks can directly increase customer revenue. Adding a second network based on programming with minimal interest outside of two bi-annual windows is not a good economic decision for MSO’s.

The USOC and Comcast would have added more value by trying to partner with the Universal Sports network and maximize the value delivered by Olympic programming. Develop a solid, singular marketing platform that promotes it as the place to go for Olympic coverage. The competition is the entire sports universe, not each other. MLB Network competes against ESPN, TBS, ESPN 2, Versus, multiple regional RSNs, TNT, and the other league networks. Another entity walking in to start a baseball-only network to compete with MLB makes no sense because you weaken each other in a fight against other behemoths that already hold an advantage.

Throw into the fire the haste the USOC showed in announcing this, and it has all the makings of a disaster. I have a hard time seeing either of these networks succeed unless they dump money into marketing and find a way to generate interest in more than Michael Phelps during the time between Olympics. And if the US lost the Chicago for reasons related to this situation, cable viewers would never forgive them.

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One Response

  1. Customers are not even demanding 1 Olympics channel. Maybe its finally time that the IOC cuts its relationship with NBC.

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