The Olympics: Does it still have a ring to it?

Will the Olympics die? After Rio, there are strong forces working against this longstanding, iconic event.

Rio TV audiences were down between 17 and 20% depending on which figures are quoted. Alarmingly the opening event attracted 30% fewer viewers than that recorded for the epochal 2008 Beijing Summer Olympics which were seen by 4.7 billion people (minimum 1 minute watched).

Media industry heavyweights bravely explained the decimation of TV viewers as a technical shift: “Audiences have migrated to streaming” they said, pointing out that live viewing on computer and mobile screens had in fact climbed substantially. However the new online adopters accounted for 5-10% extra daily viewers. They did not compensate for the steep decline in traditional TV viewers*.

NBCSN: NBC Sports Network - a cable and satellite channel

Furthermore, there is no advertising revenue from much of this new type of viewing including ‘time-shifted’ viewing (the watching of pre-recorded footage). The current paradigm relies on traditional TV audiences because big TV audiences justify high advertising rates which translate into broadcast rights fees paid to the Olympics organisation (IOC). This remains their chief revenue source. No audience - no Olympics.

Source: www.olympic.org

Paying big fees to the IOC is what NBC has done. In a fit of optimistic joie de vivre NBC paid $4.4bn to secure the global TV rights for the Olympics up to the year 2020, and then went back for more, forking out a further $8bn for rights until 2032. That fewer people watched the Rio Olympics is now an open secret. This drove NBC managers to offer clients additional free prime-time advertising slots to make up for the unrealised Rio audiences.

Source: Nielsen

However, a simple decline in monetisable audiences may not tell the whole story. There is an easily overlooked generational development. The steepest audience declines were in the key youth segment where up to 30%**of those aged 18-34 simply evaporated. The “future” vanished. Analysts were again quick to point out that younger viewers did engage with the Olympics via non TV media but we know that much of the claimed youth interest had little to do with traditional athletic prowess. For instance younger profiled Buzzfeed suggestions included “How many athletes ‘hook-up’ in the Olympic village” eliciting shock and dismay amongst IOC officials. TV risks becoming irrelevant in the younger, connected world. A post-Olympics media news headline pertinently read: TV has seen the future of TV.

Re-inforcing the youthful migration away from TV are their strong peer group bonds that seem to be impervious to top-down messaging and branded role models offered through traditional media. While the youth may be interested to know that androgynous Caster Semenya won a medal and big-footed Phelps many more, they are not on the verge of a new wave of idolatry such as that which followed Mark Spitz’s victories a few decades ago. The world has changed.

Young people have a greater level of self-confidence under-pinning a stronger sense of identity than recent generations. Modern youth identity is diverging from external figures, labels and commercial abstractions. (See  http://noted.co.za/work-and-advertising-did-marx-foresee-this/ )   

With the Olympics producing a repetitive inter-nation big-media athletic circus it risks becoming tomorrow’s anachronism as youth interests and communication preferences diverge.

There are other forces acting against the Olympics – well known to us. The exorbitant costs and losses that befall host cities, the drug and performance enhancing scandals, the politicisation of the event including boycotts and national grandstanding, even the branding police. These coalesce to diminish the compelling spectacle it once was.

Finally there’s the Seneca Cliff. Yes, Lucius  Annaeus Seneca was a Roman Stoic philosopher that amongst many things described how complex systems decay faster than they develop. Put differently, things that take a long time to develop will often collapse rapidly. (This has been subsequently demonstrated mathematically):

At a basic existential level, survival of the Olympics will be threatened by its size and “complexity”. The combination of forces listed above suggest the IOC needs to embrace the attitudinal and value shift occurring in the emerging future audience. Yes, the Olympics can die, yet more so without rapid innovation and readiness to adapt.

Andrew Barnes

Partner at NOTED Thinking

September 2016

*Audience measurement is not directly comparable across traditional TV where audiences are measured in people versus streaming where the measurement is “minutes” viewed or available, with no comparable estimate of people actually watching. Audience estimates are for the USA.

** Some estimates claim a higher figure.