Tough heat
Quokka's troubles highlight the vast competitive gulf between Web companies and established media, such as television, in covering high-profile events such as the Olympics.NBC refused to comment on the financial performance of its Olympics coverage. Nevertheless, some estimates put the company's take from the Sydney Games in excess of US$50 million, on US$900 million in advertising sold over the 17-day event. Broadcast rights cost US$705 million, and production costs came in around US$125 million.
Surprisingly, the company earned a profit despite disappointing Nielsen ratings for the games, which the company decided to broadcast with a several-hour delay to reach prime-time audiences. The company garnered on average just 13.8 percent of US TV viewership - down 36 percent from the 1996 Atlanta games and 20 percent below NBC's own projections.
NBC paid US$545 million for the rights to the upcoming Winter Games broadcast. The company is expecting better results at Salt Lake City, which will not face the time handicap of Sydney.
By contrast, NBC has viewed the Web as a sideline aimed primarily at promoting its TV programming.
According to Nielsen/NetRatings, NBCOlympics.com drew 4.4 million unique US visitors in September during the games. Although the numbers appeared to show a host of fans tuned into coverage on the Web, analysts were unimpressed, noting that NBC kept the Internet coverage of the Olympics relatively low key.
Significantly, NBCOlympics.com offered no live coverage of the games, providing only short video segments of events that had already been televised.
Other parties
NBC is not prepared to drop its Internet coverage completely, however, and is in discussions with various Web companies to find a replacement for Quokka, according to NBC spokesman Mike McCarley.
"We are in talks with several different companies," he said, declining to offer specific details about the talks.
A Yahoo representative said the company is in discussions with the Salt Lake Organizing Committee and NBC to offer Web site hosting.
"We've been talking to (the Salt Lake Organizing Committee) in terms of their plans for the Web site," the representative said. "I don't want to go into those things until something is finalised."
Analysts also said that RealNetworks and Microsoft, which compete in providing software for viewing live video over the Net, may be interested in becoming players in upcoming games.
RealNetworks in particular has aggressively signed up sports programming for its subscription Internet streaming service, GoldPass, which offers Major League Baseball and National Basketball Association games as part of a US$9.95 a month package.
The streaming media company declined to comment on its Olympics plans.
How the next Internet partner is chosen to cover the Olympics may create a blueprint for granting rights to online media companies. Whether an Internet company will eventually have its own set of rights will depend on how widespread the medium grows and how lucrative these deals could become for the IOC.
But for now, at least, the committee appears to be in a quandary about the Internet's role in coverage. The question is not whether the Web will play a role in disseminating information, but how.
"Somewhere down the line there will be an Internet rights holder, and that's taking shape," the US Olympic Committee's Condron said. "How they want to do it will probably be in a relationship with a rights-holding network. The main thrust is to not diminish the broadcasting-rights holders who pay pretty goodly sums to bring the message to the world live."
