London 2012: Olympics Draw Australian TV Crowds, But No Profits
While NBCUniversal in the U.S. says it will break even, a challenging ad market means Australian networks face losses on their Olympic investments.
SYDNEY- Sports-obsessed Australians are eating up the Olympics diet that is being served to them by pay TV provider Foxtel and free-to-air broadcaster Nine Network, which between them are providing almost around the clock live coverage of the London 2012 games across a total of 10 channels here.
Foxtel is giving its sports tier subscribers – numbering around 30 percent of Australian TV households, or over 2.4 million homes - eight dedicated Olympics channels with over 3,200 hours of sport at no extra charge, billing it as the largest TV broadcast event in Australian history.
And the Nine Network is on air live with Olympics coverage for up to 19 hours a day on its primary channel, with a simulcast in high definition on one of its digital channels and trial 3D broadcasts.
It is a feast to tempt even the most timid sports watcher, and viewers are gorging so far, with the Nine Network posting a viewer share in excess of 83 percent for the opening ceremony and between 35 and 45 percent for live events in primetime over the first four days of the Summer Games.
While the numbers for the opening ceremony, which Nine carried exclusively, didn’t set any records, the 2.5 million viewers who watched from 5.30am to 9.30am local time Saturday were not far behind the Beijing 2008 audience here of 3.3 million, which were broadcast in a more viewer-friendly time zone.
And audiences for the sports extravaganza have been solid since Saturday with Nine’s coverage averaging between 2.2 and 2.8 million viewers nationally over the first four days.
That puts the Games broadcasts in the top tier of programs for the year. In Australia a show with a capital city audience of over 1 million is considered a hit.The Voice Australia, the year’s top-rated show to date, had an average Sunday audience of 2.8 million viewers.
But while audiences are winners, the Olympic broadcasts are being described as a loss leader for both Nine and Foxtel.
Foxtel and Nine locked up exclusive rights to the 2010 Vancouver Winter Olympics and the London summer games for a reported $120 million. But reports this week say that Nine will lose around $25 million on the Games amid weak advertising market.
Morgan Stanley media analyst Andrew McLeod said: "In good economic times a major event like the Olympics has grown the overall pool of advertising expenditure in Australia. But in a weak environment, such as the current, there is unlikely to be a meaningful incremental lift in ad spend," according to The Australian newspaper.
Instead both Nine and Foxtel are using the marquee event to promote their wares to a captive audience.
Nine is showcasing the new programs it will premiere during the second half of the year, with the network heavily promoting its revival of Big Brother, which returns to Australian TV after a four-year absence, as well as Anger Management and raft of new Australian dramas. Indeed the Olympics, coming on the back of other Nine successes this year, including The Voice and The Block, is giving the network some much-needed momentum as it seeks to regain the number one ratings crown from its long time rival the Seven network.
That will go some small way to easing the pain felt by Nine's parent, the Nine Entertainment Co., owned by private equity group CVC Asia Pacific, which is looking to restructure its $2.7 billion in debt.
Meanwhile Foxtel is using the games to drive subscriptions as it seeks to build its customer base beyond the 33 percent of Australian TV homes that pay for a Foxtel service to a penetration target of 50 percent .
Certainly the Olympics have boosted Foxtel’s audience. Its eight channel package was watched by over 770,000 people on Monday, according to figures released by the Nine network, but Foxtel has yet to announce updated subscriber numbers.
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