The Great Experiment has flopped.
For whatever reason-the recession, the wrong sports, the marketing-the Olympic TripleCast looms as the biggest financial fiasco in the history of pay-per-view television.
According to industry figures, fewer than 250,000 people signed up for the service, or only about 12 percent of the original projection. The TripleCast stands to lose as much as $100 million for partners NBC and Cablevision Systems Corp.
With the economy`s growth rate slowing in the second quarter and indicators pointing to lagging consumer confidence, the TripleCast was in trouble before the first event aired July 26.
And without consumer confidence, discretionary spending on things like the TripleCast is a likely first cut in any budget.
The TripleCast originally was conceived to help NBC offset part of the $401 million the network paid the International Olympic Committee for the U.S. broadcasting rights to the 1992 Summer Games.
In conjunction with Cablevision, NBC`s unprecedented idea was to present non-stop coverage of the Olympics on three cable channels. The pricing structure originally was set at $170, $125 and $95. As the Games neared, a one-day package at $29.95 was added.
Finally, four days after the Games started, the TripleCast announced what amounted to a fire sale-the daily rate would drop to $19.95 and the weekend rate would fall to $29.95 for both Saturday and Sunday.
The TripleCast-whose marketing ploys were questioned inside and outside NBC from the beginning-even resorted to buying advertising spots on, of all things, cable`s Comedy Central, whose ”Olympiacs” reports poked fun at the whole idea.
Subscriptions picked up, according to TripleCast officials and local cable operators.
”(Last) weekend had a modest increase,” said a TripleCast spokesman.
”It looks like we`ll have more than 200,000 (subscribers) but less than 500,000.” This is a still-optimistic figure according to some pay-per-view observers. And still a long way from the 2 million predicted.
All of which has led to projections of losses incurred by the TripleCast between $30 million (the network`s) and $100 million (industry sources). With Cablevision reportedly liable for up to $50 million in losses, NBC conceivably could break even on the TripleCast. But it wouldn`t make a dime toward offsetting the $401 million rights fee.
According to a survey done this week by Pay-Per-View Update, the $125 package has a buy rate of .6 percent (or 240,000 subscribers), while the daily package is less than .2 percent (80,000).
”We were wrong,” Cablevision chairman Chuck Dolan told the New York Times. ”The public didn`t find enough incremental value for the Triplecast over what they could get on NBC. . . . Clearly we did not read the research well.”
Those who did buy the whole package were pleased by what they saw.
”I`d say the investment has been a good one,” said one buyer, who said he purchased the whole package because he`s a track and field fan. ”I love watching what I choose and not what NBC thinks I should watch.”
The TripleCast also offered something missing on NBC`s network broadcasts.
”I enjoy seeing the achievements of all athletes, not just the ones in red, white and blue,” said the same viewer. ”It doesn`t hurt to hear `Oh, Canada` or `God Save the Queen.` ”
But the artistic and production successes aside, the TripleCast has been a monumental financial flop. The question is what went wrong. The answers have ranged from price to concept to competition from the network.
”Their projections were way off from the beginning,” said Dantia Gould, a PPV Update executive, pointing to the 5-percent buy rate forecasted by TripleCast executives. ”And they became more and more adamant about it.”
Gould said a survey of cable operators done before the Olympics started showed ”optimistically” a buy rate of 2-3 percent.
”It was one of those things people didn`t get excited about,” Gould said. ”There was too much on free TV.”
While Gould called the effort ”ill-conceived,” she added the experiment ”increased viewer awareness of pay-per-view. But this was a major, major disappointment.”
Even NBC Sports President Dick Ebersol agreed. ”The folks who did the marketing and the promotions never were able to strike the same chord the first day of production was able to strike,” said Ebersol, who produced the telecasts for the network and the TripleCast. ”By the time that chord had struck, people had seen how effective the broadcast coverage was.”
A TripleCast format probably won`t be used for the 1996 Summer Games. Since the Olympics will be in Atlanta-and the IOC charter stipulates that telecasts in the host country must be available to the widest possible audience-pay-per-view is out of the question. Almost.
”Maybe when one of the networks gets the rights, it may want to sell off badminton,” Ebersol said. ”They won`t let you do any of the major sports (on pay-per-view) because of the charter.”
Which, after the TripleCast, probably is a blessing.
