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Volume 21 No. 6
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Content, expansion establishes Olympic Channel

The Olympic Channel turns one year old today, and like a human of the same age, it’s accomplished much but still must look to the future for the real payoff. In the meantime, it’s costing its parents a lot of money.

Launched as a website and app at the end of the Rio Games, the Olympic Channel has spent the last 12 months aggressively developing content, obtaining rights to dozens of sports and laying the groundwork for linear programming in key markets. On July 15, it took a major step by launching the U.S. cable version, then added linear programming on Eurosport stations on Aug. 2, and is planning a Chinese channel launch at some point in 2018.

“For us it’s a sprint over a marathon right now, and we’ve been running as fast as we can,” said General Manager Mark Parkman. “I think what we’ve done in the first year is establish the Olympic Channel as a place that people can find very interesting, thought-provoking and useful content.”

He boasts the channel has created 6,000 pieces of original content, aired more than 500 live events, expanded to 11 languages and has developed series in 22 different countries. It has 6 million followers on social media, more than 76 percent of them under 35.

While the input has been strong, the output — in terms of deliverable audience and revenue — has been slower to develop. So far, the IOC has sold three “founding partner” sponsorships to Bridgestone, Alibaba and Toyota, just half of the original target of six.

“I think the major headwind at the beginning was we were talking about something that didn’t exist,” said Timo Lumme, IOC managing director of television and marketing services, in a July interview. “Now we’re talking about a toddler that’s 10 months old. It can’t walk yet, but it’s grabbing at the chair legs and trying to hold itself up. We’re moving as fast as we can, in developing and growing up and building the model out.”

After getting IOC approval in 2014, the Olympic Channel has been staked to a $575 million startup budget, offset in part by a $100 million signing bonus agreed to by NBCUniversal in its $7.75 billion rights deal in 2014.

Yiannis Exarchos, Olympic Channel Services CEO, hosts IOC President Thomas Bach.
It’s not expected to sustain itself for another six years, said Yiannis Exarchos, Olympic Channel Services CEO. According to IOC financial reports, the body spent $75 million in 2015 and 2016 as it hired nearly 100 staffers and began developing content.

Global IOC sponsor Bridgestone bought one of the founding partnerships with the Olympic Channel, and has run ads on the site and sponsored original branded content such as the series “Against All Odds.”

Michael Fluck, Bridgestone’s senior director of digital marketing and strategy, said the channel is conceptually a major extension of Bridgestone’s Olympic rights because it truly covers the globe in ways a particular Games or national Olympic committee sponsorship does not.

But the impressions are a work in progress, he said.

“It’s growing,” Fluck said of the audience. “Frankly as a marketer, I wish it was higher. I wish there had been an opportunity to launch during Rio rather than post Rio. It’s trending in the right direction.”

The channel is at the forefront of two strategic imperatives for the IOC: reestablishing Olympic passion among youth and increasing the value of Olympic sponsorships.

NBCUniversal, the single largest source of revenue for the IOC, has rights locked up through 2032, meaning the IOC must look elsewhere for rapid revenue growth in the coming years. To pick up the slack, the IOC hopes to engineer great leaps in sponsorship revenue, and must develop more assets that fill in the long gaps between the Games to justify the price increases. After 2020, Lumme said, they expect to include the channel in all global sponsorships.
Gary Zenkel, president of NBC Olympics and Business, expressed a similar desire while discussing ad sales for the new channel, which launched July 15 in just above 36 million U.S. homes. (It is not rated.) As the channel gets established, Zenkel hopes Olympic sponsors “will see this is in fact the opportunity they’ve been asking us for for years, which is the chance to extend their Olympic activation beyond that Olympic window.”

NBC’s Gary Zenkel, the IOC’s Mark Parkman, NBC’s Mike Tirico, the USOC’s Lisa Baird and NBC’s Jim Bell promote the launch of the U.S. linear channel in July.
NBC is in charge of selling the linear channel, which is a joint venture with equity contributions from the USOC and the IOC. The linear channels are a key part of the initiative’s overall revenue goals, and officials hope the cable station can drive viewership to the Olympic Games broadcasts starting with the Pyeongchang Winter Games in February.
But Exarchos said it’s a mistake to measure the channel only by how it augments the Games themselves — it’s meant to extend the brand 365 days a year. For instance, the Chinese version is expected to go live in 2018 but probably not in time for the Pyeongchang Games. Distribution and depth of programming are more important, he said.

In its first year, executives in the channel’s Spain headquarters discovered an opportunity they hadn’t accounted for in planning, Parkman said: back-end services for international sports federations. For instance, the Olympic Channel is providing a video streaming platform to United World Wrestling, and also is helping federations digitize their video archives. Those won’t generate revenue, but it does add more distribution by getting Olympic Channel coverage onto more platforms. It’s another example of the channel’s vast mission: to help the Olympics, dozens of sports and national Olympic teams reach consumers with endless competing options for their attention.

“It’s been an incredible adventure,” Parkman said. “Because there’s never enough time in the day, because we’re always trying to create new things, explore new ideas, find ways to get more distribution and viewership.”