TV viewership drops; online watching rises for Olympics

As the United States was leading the Rio Olympics with the most medals of any country, NBC was struggling to win ratings gold.

The network’s coverage of the Games is drawing audiences three times bigger than ABC, CBS and Fox combined. But a seismic shift toward online viewing has kept the Nielsen numbers from being as high as NBC hoped.

The average audience of 27.8 million viewers for the first 10 nights was down 17 percent from London’s 2012 Games.

With more competition airing live in prime time, NBC counted on the Rio ratings to be as good or better than London’s, the most-watched Olympics held outside the U.S.

Still upbeat

But NBC execs aren’t tossing in the towel. NBC Sports Group Chairman Mark Lazarus described the Rio Games as “the most economically successful” in history, factoring in the audiences for coverage on NBCUniversal’s cable networks and NBC’s free online streaming app.

“NBC’s broadcast is not the only way people are consuming the Olympics,” Lazarus said, “just like the way newspapers and magazines are not only consumed in print.”

Through Sunday, online users had streamed 1.86 billion minutes of NBC’s Rio 2016 coverage, topping the combined number for London and Sochi, Russia. The network is making videos of every Olympic event available on its app, and streaming its prime-time coverage of the Games for the first time.

NBC is also airing Olympics coverage on NBCUniversal’s cable networks NBCSN and Bravo during prime time, giving viewers an alternative to the events airing on the broadcast network. But online growth reflects a dramatic change in viewing habits over the past four years.

In the summer of 2012, Netflix had 25 million U.S. subscribers. Now, it’s up to 46 million. Millennials spend just over half of their TV viewing time bingewatching programs, according to a recent study by GfK Research, and far less time watching live. Primetime TV usage among 18- to 34-year-olds has declined 25 percent since the 2012-13 season.

“The number of available viewing choices has grown exponentially over the years, and with that choice comes some level of fragmentation that we know will inevitably continue to grow,” said Billie Gold, vice president and director of programming research at Amplifi US, a media buying service.

Gold attributes the drop in TV viewing of the Games among viewers ages 18 to 49 — down 25 percent compared with 2012 — to the availability of content online both through NBC and social media.

“Younger viewers have learned to consume content differently, knowing that if they miss a particular event, they can always catch the highlights in the news or online,” she said.

Cultural shift

NBC’s own research on Olympic audiences has shown viewer migration to streaming. Alan Wurtzel, president of research and media development for NBC, said among viewers surveyed who tuned in the first three days of the Rio Games, 80 percent said they are using TV and one other device, most likely a smartphone. That figure is up from 61 percent for the 2014 Winter Games.

But Andrew Zimbalist, a professor of economics at Smith College, says technology is not the sole reason younger viewers are watching less coverage on TV. “There is a cultural shift,” he said. “Young people today don’t watch as much television. When they do watch sports on television it’s because they are in a fantasy league.”

The Games’ home base in Rio has also made headlines. In the run-up to the Games, NBC execs insisted that reports about Zika virus fears, water pollution and economic strife in Brazil would not be a factor for audiences. But four members of the U.S. swimming team were robbed at gunpoint in Rio early Sunday, and officials struggled to clean up the green-tinged water at the Maria Lenk Aquatics Center.

Money rolling in

Despite lower-than-anticipated TV ratings, NBC expects a healthy profit — more than $120 million — on the record $1.2 billion in Olympic ad sales it booked. The figure includes dollars spent for online ads, but the bulk of the revenue comes from TV commercials.

An additional $30 million in ad time was sold after the Games started. But some of the commercials NBC had going into the Games will have to be used to make up for the primetime audience shortfall.

The Rio Games are averaging a 15.4 household rating, according to Nielsen, below the figure in the high teens NBC guaranteed to advertisers. Lazarus does not anticipate a problem meeting that commitment. “Overall our ratings consumption is meeting our expectations,” he said. “The mix is just a little different.”

Broadcast TV is still the biggest outlet for the Olympics. When that is no longer the case, NBCUniversal will adapt its deal with the International Olympic Committee to whatever platform people use. The company has more than $12 billion in rights fees tied up in the Games until 2032.