July 10 (Bloomberg) -- Comcast Corp.'s NBC Universal is providing live online coverage of every Olympics event for the first time this year. The catch is you have to be a pay-TV subscriber to watch with your tablet, PC or mobile phone.
The network plans to produce 3,500 hours of online coverage, including all 32 sports and 302 medal events from NBCOlympics.com. A company website will help viewers get a username and password from their cable or satellite service.
By extending the viewer relationship to the Internet with live coverage, NBC is embracing a vision of pay TV that extends beyond the living room. That's especially important as younger consumers, some who've never paid for cable, flock to Netflix Inc., Hulu LLC and other Web services. Streaming events live also lets NBC satisfy fans who might be annoyed by tape delays or loud-mouthed spoilers in the next cubicle.
"In theory, you'd test authentication in a smaller way first, and then go for the big gorilla, but this is the event where we have an opportunity to make a splash," Mark Lazarus, NBC Sports Group chairman, said in an interview. "This is more than a test. This is a business imperative as we roll into the future."
NBC Universal, which became part of Comcast in January 2011, plans to stream events starting July 25, two days before the opening ceremony. The 3,500 hours of online coverage compares with 2,200 hours from Beijing four years ago.
Streaming Options
Subscribers at 104 U.S. pay-TV systems will have online access, according to the NBC website, potentially making the service available in more than 100 million U.S. homes, including some that don't get the company's new NBC Sports Network. Some subscribers may need to call their service provider to obtain a username and password. Pay-TV operators may also limit the number of devices to prevent account sharing.
Streaming will be available at NBCOlympics.com, as well as a version of the website optimized for mobile devices, according to NBC. Service will also be available through an application, called Live Extra, for Apple Inc.'s iPad and iPhone, as well as mobile phones and tablets running Google Inc.'s Android operating system software.
During live events that aren't simultaneously broadcast on one of NBC Universal's TV networks, viewers at times will only hear the sound in the arena or Olympics-provided announcers, NBC said. The advertising load will also be different online.
Clips of events will be posted after they conclude and won't require a pay-TV account, Lazarus said.
"We'll have more digital eyeballs and advertising revenue this Olympics than many companies have in a year," he said.
Younger Viewers
With Olympic events available to so many viewers, NBC Universal's strategy may help Comcast, the biggest U.S. cable system, and other cable, telecom and satellite operators sign up a generation of 18-to-20-year-olds who have never subscribed to pay-television, according to Laura Martin, a Pasadena, California-based analyst at Needham & Co.
"When people learn they can watch Usain Bolt or Michael Phelps in real time on their smartphones and tablets, as long as they enter a code, you have the opportunity to change how people think about television," Martin said in an interview.
When the Olympics officially open July 27, the games will become the most widely available authenticated online programming ever offered, exceeding the TV Everywhere services by Time Warner Inc.'s HBO, Walt Disney Co.'s ESPN and CBS Corp.'s Showtime, according to Martin's estimates.
NBC will lose $100 million to $200 million on the London Olympics, according to David Joyce, an analyst at Miller Tabak & Co. in New York. The media company says it paid $1.18 billion for the rights.
Revenue Outlook
The London Olympics telecast, carried on the NBC broadcast network, as well as on the NBC Sports Network, Bravo, CNBC, MSNBC and Telemundo, will collect at least $950 million in revenue, Seth Winter, a senior vice president for NBC Sports, said at a June 27 media briefing. That's about $100 million more than the Beijing Games four years ago.
Comcast, based in Philadelphia, fell 0.3 percent to $31.72 yesterday in New York. The shares have climbed 32 percent this year.
To make it easier for viewers to locate a username and password, and log on for the first time, NBC created a video with "The Voice" host Carson Daly to explain the process. The company is encouraging viewers to authenticate early to avoid a logjam that could potentially hobble the system. It's also providing a temporary log-in that provides four hours of access to anyone.
During the 2010 Winter Olympics in Vancouver, NBC dropped the authentication requirement and provided unrestricted access when viewers had trouble logging in with their pay-TV accounts.
Fast, Simple
This time, the process is simpler and faster, said Michael Bishara, vice president and general manager for TV Everywhere at Buffalo, New York-based Synacor Inc., which is overseeing the login process for about 40 pay-TV systems with 25 million customers.
"The education effort behind this is very smart and very well thought out," Bishara said in an interview.
Streaming will probably be highest during the day, while people are at work, Bishara said, citing other events including the "March Madness" U.S. college basketball championship. Online viewing will probably spike during opening and closing ceremonies, swimming competition featuring Michael Phelps and gymnastics, he said.
Comcast isn't charging pay-TV operators or subscribers any additional fee for online access, Lazarus said. Limiting the additional service to people who already have pay-TV underscores the value of the programming, he said.
"Providers pay us for our networks," Lazarus said. "If someone is going to pay you for something, you don't give it away to someone else for less or for free. If you're paying a premium for cable, your neighbor that isn't paying for cable shouldn't get the same value."
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