DNP Editorial NBC's Olympics and the steely grip of old media

Owners and stakeholders of Big Media have thick skins. So the persistent trending of #NBCFail, and the riotous reading that the tweet stream provides, is probably bouncing right off their leathery hides. For one thing, the complaints were surely foreseen. They are largely the same criticisms NBC withstood in previous Olympics -- over-curating, ill-placed commercials, tape delays, scandalously inane commentary, and a generally inferior Olympics presentation compared to other countries. The unspoken shrugging answer, of course, is financial. The lessons learned from that answer say things about how slowly institutional power inches into the future, the impatience of the digital class, brand ecosystem as a preeminent business battleground, and the ideology breakdown of the International Olympic Committee.

When the web got rolling in the '90s, it was clear that disintermediation was going to be its great leveling effect. The roles of value scavengers that got between customer and product would be reduced or eliminated. The principle of direct access has proven out in some ways -- just ask the music labels, or several other business agencies that couldn't or wouldn't adapt to consumer empowerment in the connection era.

NBC's role in curating the 2012 Olympics for the American audience demonstrates that old-media values hold sway as forcefully as ever when the dollars have enough zeroes in them.

At the same time, if there is a lesson I have re-learned more times than any other during 20 years online, it is that change happens slower than idealists expect. Futurism plays out in theory more smoothly than in fact. NBC's role in curating the 2012 Olympics for the American audience demonstrates that old-media values hold sway as forcefully as ever when the dollars have enough zeroes in them. NBC paid nine zeroes to extend its exclusive Olympics presentation rights through 2020. (Actually, $4.4 billion.)

That bare fact shines stark light on the values and assets in play. NBC knows that it has little value in this equation. The two primary business values of the Olympics are: the event and the audience. The role of media in a digitally connected world, ideally, is to bring audience and event together with no blockage or artificial friction.

But the Olympics reality is all frictional and intermediary, because NBC's two assets are inherently low-value: machines (broadcasting technology) and commentary (the witheringly maligned hosts). The internet as an unaffiliated global medium solves both the machinery issue (with internet infrastructure and web services), and the commentary space (with social media). In a flat view uncolored by business opportunism, NBC brings zero value to the challenge of exposing a global event to a hungry national audience.

A huge portion of the audience probably enjoyed the skewed curation, but my Twitter feed was spitting bile.

By necessity, then, NBC treats its licensed content like an immense lump of clay. It sculpts value by shaping the clay profitably. Because the monumental investment is risky, NBC must concentrate its bets through three profit lenses: Audience (American home television viewers), Time (evening prime), and Interest (glamorous events and competition celebrities). That is why, on the first Saturday night, NBC's main TV outlet seemed pathologically fixated on Michael Phelps and Ryan Lochte commentary instead of using valuable U.S. prime time to show us, you know, actual sports. A huge portion of the audience probably enjoyed the skewed curation, but my Twitter feed was spitting bile.

NBC spokespeople threw tweet-darts right back, citing the live internet feeds of the games. Not a bad point, but here is where NBC's strategy is the most noncompliant with free-information ideals. By limiting stream access to cable or satellite subscribers (with NBC / CNBC packages), this scheme enforces ecosystem buy-in that opposes any idea that the Olympics belong to everyone. You must be on the grid; worse than that, you must be on one of NBC's grids to reach another of NBC's grids. The have-nots, whether by necessity or cord-cutting choice, are mostly blacked out of the Olympics experience in their homes.

NBC's customers are its advertisers.

So we're left with a first-world problem for the haves, and aggravated resentment for the have-nots. None of us, on either side of that divide, is a customer of NBC. NBC's customers are its advertisers. And whether or not NBC's licensing bet pays off, old media plants a massive victory stake in the ground, pushing aside technology's rightful role of connecting the world in shared moments, impervious to the sharpened sticks hurled by the digerati.

But honestly, is there a clear-cut right to NBC's arguably wrong strategy? I've seen calls to boycott the TV coverage, but ratings for the first two prime-time sessions were through the roof. There is obviously a willing audience for The Phelps & Lochte Show, one that suffers no dissatisfaction from shunting aside badminton and skeet shooting. Jeff Jarvis wrote, "The problem for NBC as for other media is that it is trying to preserve old business models in a new reality." Not trying, Jeff: succeeding. The old model still evidently works in large-event, must-watch scenarios.

Where is the International Olympic Committee (IOC) in this? It is on the receiving end, $4.4 billion richer, selling out the idealist's wish for a global, real-time community around one of civilization's oldest and most-sanctified celebrations of human skill and comradeship. If there is one institution with the clout to insist on universal joining of every individual who can reach a screen, it should be, and must be, but isn't, the IOC.

For the fomenting digerati, #NBCFail might be the wrong hashtag.

Brad Hill is the VP, Audience Development at AOL. He is the former Director and General Manager of Weblogs, Inc.