Olympic Broadcasting And its Development in the Era of New Media. YIP Shui Fong, Hester

Transcription

1 Olympic Broadcasting And its Development in the Era of New Media YIP Shui Fong, Hester A Project Submitted In Partial Fulfillment of the Requirements For the Degree of MSocSc in Media Management Supervisor: Mr. Ng Sek Fai, Raymond School of Communication and School of Business Hong Kong Baptist University Hong Kong May

2 Table of Content I. Introduction... 3 II. Philosophies of the Olympic Games and Olympism... 5 III. Decipherment of the International Olympic Committee, the Radio and Television Commission, the TV Rights and New Media Commission and Olympic Broadcast Services... 9 IV. The Evolution of Olympic Broadcasting V. Olympic Broadcasting Polices, Strategies, Programming and Operations VI. The Contribution of Olympic Broadcasting to the Olympic Movement VII. Financial statements and Viewership of the recent Olympic Games VIII. The Emergence of New Media Partner of the Olympic Games IX. Changes brought about by the new media to Olympic Broadcasting X. Conclusion Appendix 1: Biography of Mr Manolo Romero, Managing Director of OBS Appendix 2: Countries Broadcasting the Olympic Games Appendix 3: Countries Broadcasting the Olympic Winter Games Appendix 4: Olympic Games Broadcast Revenue History Appendix 5: Olympic Broadcast Revenue Distribution References:

3 Endnotes: The important thing in life is not the triumph, but the fight; the essential thing is not to have won, but to have fought well. Pierre de Frédy, Baron de Coubertin, President of the International Olympic Committee from 1896 to

4 I. Introduction The ancient Olympic Games were held for the first time in the city of Olympiad, Greece in 776 BC, then at four-year intervals in the same place until the year 393 AD. The Olympic Games were revived in modern times in The International Olympic Committee (IOC) was established in 1894 and held the first session in Paris in June During this first Session, the Greek city of Athens was selected to be the Host City for the Games of the I Olympiad in which delegations from fourteen nations participated in In 2008, the Games of the XXIX Olympiad will be held in Beijing. Over 200 nations and ten thousand athletes will participate and compete for the glory. The First Olympic Winter Games were held in Chamonix, France in 1924 and since then, twenty Winter Games have been celebrated with the latest Winter Games held in Torino, Italy in The 1936 Olympic Games were held in Berlin and two important features were introduced. The first was the Torch Relay. A torch was lit in the city of Olympiad and carried from the origin of the Olympic Games to the Host City. The second feature which significantly affected the Games was the broadcast of the Games on television. The number of countries to televise the Olympic Games rose from only one in Berlin 1936, to forty in Tokyo 1964, to one hundred and twenty-four in Montreal 1976, and to two hundred and twenty in Sydney The worldwide 3

5 audience created by this television coverage of the Olympic Games in turn enhanced the importance of the Games. Sportsmanship and the philosophy of Olympism were widely spread throughout the world to promote the Olympic Movement. An essential impact of television broadcast of the Olympic Games was the revenue generated which contributed to a stable financial foundation to stage the Games. Nowadays, broadcasting is an indispensable part of the Olympic Games. The Olympic Games cannot succeed without the successful worldwide broadcast of the Games. In turn, the Olympic Games have become the most important media sports event viewed by highest number of spectators globally.. In the following sections, the concept of Olympism will be examined. The contribution of Olympic Broadcasting to the Olympic Movement will be studied. The development of Olympic Broadcasting through history and into the era when new media evolves will be analyzed. Thereafter, the future of Olympic Broadcasting will be predicted. 4

6 II. Philosophies of the Olympic Games and Olympism The fundamental principles of Olympism are written in the Olympic Charter. The Charter embodies the guiding principles of the Olympic Games, the rules and by-laws. The International Olympic Committee (IOC), the International Federations (IFs), the National Olympic Committees (NOCs) and each Organizing Committee of the Olympic Games (OCOG) are governed by the rules and by-laws set forth in the Charter. Olympism is a philosophy of life, exalting and combining in a balanced whole the qualities of body, will and mind. Blending sport with culture and education, Olympism seeks to create a way of life based on the joy of effort, the educational value of good example and respect for universal fundamental ethical principles. i Olympism spreads the spirit of the Olympic Games from sports over to culture, ethics and way of life. It dissolves and surpasses the boundaries of nations and upholds the values of the Games in a universal language. The goal of Olympism is to place sport at the service of the harmonious development of man, with a view to promoting a peaceful society concerned with the preservation of human dignity. ii Olympism places the highest goal of the Games to the development of mankind towards peace and harmony. In a world beleaguered by unrest, animosity 5

7 and wars, the Olympic Games strive to protect the interests of the athletes and sport. The concept of the Olympic Truce was adapted from the ancient Greek Olympic Games to ensure the safety of athletes, artists and pilgrims in their journeys to and from the Games. iii The modern Olympic Truce intends to bring the ancient philosophy alive to promote peace and contribute to solving conflicts diplomatically. One of the ideals of the Olympic Games is to build peace and friendship by the sharing and togetherness of the participation in the sports. The Olympic Movement is the concerted, organized, universal and permanent action, carried out under the supreme authority of the International Olympic Committee, of all individuals and entities who are inspired by the values of Olympism. It covers the five continents. It reaches its peak with the bringing together of the world s athletes at the great sports festival, the Olympic Games. Its symbol is five interlaced rings. iv The well-known interlaced Olympic Rings, adopted as the Olympic Emblem since the birth of the IOC in 1894, in blue, yellow, black, green and red on a white background symbolize the five continents of the world unified by Olympism. The six colors including the background white signify all nations of the world being knitted together by the Games. The practice of sport is a human right. Every individual must have the 6

8 possibility of practicing sport, without discrimination of any kind and in the Olympic spirit, which requires mutual understanding with a spirit of friendship, solidarity and fair play. v Hence the organization, administration and management of sport must be controlled by independent sports organizations. The International Olympic Committee, the International Federations, the National Olympic Committees and the Organization Committee of the Olympic Games respect and strive to eliminate discrimination towards a nation or a person on the basis of ethnicity, religion, politics or gender. The ultimate sport spirit of Olympism is expressed in the Olympic Motto Citius Altius Fortius. The Latin words mean swifter, higher and stronger, the aspiration for athletes and the whole Olympic Movement. In sport, the spirit of fair play comes first in the IOC s mission. The role of the IOC is to encourage and support the promotion of ethics in sport as well as education of youth through sport and to dedicate its efforts to ensuring that, in sport, the spirit of fair play prevails and violence is banned. vi The fair play philosophy is further elaborated and protected in the Technical Manuals which serve as part of the Host City Contract. The Host City is obliged to follow the guidelines put forth in the Technical Manuals. In the Technical Manual on Broadcasting, the Host Broadcaster produces the International Television and Radio 7

9 Signals to provide to the Rights Holding Broadcasters. These Signals must be produced in an objective and universal manner so as not to concentrate only on athletes from one or a number of countries, but rather to cover the events with the impartiality required by an international audience. The signals must exclude elements of a national character, both in vision and sound, such as interviews, on-camera appearances of commentators and any form of advertising, unless expressly permitted by the OC. vii The fundamental IOC broadcast policy was set forth in the Olympic Charter is to ensure maximum coverage of the Olympic Games for the world to see. The IOC takes all necessary steps to ensure the fullest news coverage by the different media and the widest possible audience in the world for the Olympic Games. viii The philosophies of the Olympic Games encompass sportsmanship, fair play, equality, ethics, culture, peace and human rights. Olympism aspires to promote all these values to the people of the world irrespective of nationalityand race. It aspires to promote a harmonious way of life. 8

10 III. Decipherment of the International Olympic Committee, the Radio and Television Commission, the TV Rights and New Media Commission and Olympic Broadcast Services 1. The International Olympic Committee To comprehend Olympic Broadcasting, the roles and functions of some organizations and commissions have to be deciphered. From a legal standpoint, the IOC is an international non-governmental non-profit organization, of unlimited duration, in the form of an association with the status of a legal person, recognized by the Swiss Federal Council. ix The International Olympic Committee, established in Paris but relocated to Lausanne in Switzerland in the early twentieth century, acts as the supreme authority of the Olympic Movement. The Olympic Movement includes organizations (the IOC, NOCs, IFs and OCOGs), sponsors, broadcasters, media, athletes and people who concur to the Olympic Charter. It promotes sport in accordance with the Olympic Charter. It ensures the celebration of each edition of the Olympic Games at regular intervals by selecting the appropriate Host Cities. Furthermore, it promotes women, youth, ethics in sport and the protection of athletes. The IOC retains all rights of marketing, broadcasting and reproduction of the Games. As a result, it can ensure that the Games will continue to be a unique and 9

11 universal sporting event. Respective commissions were established to examine specialized subjects and to recommend strategies and policies to the Executive Board of the IOC. 2. The Radio and Television Commission The Radio and Television Commission (RTV Commission) is composed of experts in Olympic Broadcasting. Its purpose is to advise the OCOGs and the Olympic Broadcasting Organizations on the possible provisions of the best working conditions for the broadcast media. Hence, the RTV Commission plays an essential role both in the worldwide dissemination of the Olympic Games and the promotion of Olympism. 3. The TV Rights and New Media Commission The TV Rights and New Media Commission prepares and implements the overall strategy of negotiations of future broadcast rights. Marketing expertise and up-to-date marketing information enable the Commission to draft packages to invite tenders from respective territories. The Commission negotiates with Broadcasters and deals with broadcast rights issues. More and more, the strategies tend to target long term relationship with Broadcasters with various policies. The Commission in order to ensure improved worldwide coverage of the Olympic Games to fulfill the final goals of promoting Olympism and the Olympic 10

12 Movement in all the continents, the strategy is to establish long-term broadcasting rights fees contracts, which include profit-sharing arrangements and commitments to provide additional Olympic programming. x 4. Olympic Broadcast Services The IOC established Olympic Broadcasting Services (OBS) in May The organization was created to ensure the highest standards of broadcasting of the coming editions of the Olympic Games to greet the new millennium. OBS together with the Beijing Organizing Committee of the Olympic Games have set up Beijing Olympic Broadcasting Company Limited (BOB), a joint venture to serve as the Host Broadcaster for Beijing Under OBS s management, BOB will carry out the daily operations in Beijing. Thereafter, OBS will be the Host Broadcaster for the 2010 Olympic Winter Games in Vancouver and London 2012, via the operations of OBS Vancouver (set up in December 2006) and OBS London (to be established) respectively. The Host Broadcaster s role is to provide pictures, images and broadcasting services to the Rights Holding Broadcasters (RHBs), who have acquired from the IOC the television and radio rights of the Olympic Games. The following duties have to be performed by the Host Broadcaster (HB). The HB will produce the International Television and Radio (ITVR) Signals 11

13 of the Olympic Games to feed to all RHBs uniformly. The HB will design, build, install and operate and then dismantle the International Broadcast Centre (IBC). xi The IBC will be the Olympic Broadcasting Headquarter, the broadcasting brain, during Games Time. Signals of the Games will be sent out from here to over 220 countries in the world. The HB will also perform the same (design, build, install and operate and then dismantle) to the broadcast facilities at all competition venues. Moreover, the HB will coordinate and provide broadcasting facilities and services to the RHBs, and more importantly, the HB represents the needs and interests of the RHBs to the OCOGs. The HB assists the OCOGs to design and build the infrastructure to facilitate the operations of the HB and RHBs at the competition venues. Finally, the IOC owns all rights of the Games but it depends on the HB to produce the archive footage which will be managed by the Olympic Television Archive Bureau ( People can access the Olympic archive, including athletes, media, OCOGs and advertising agencies etc., either at a cost or free of charge, on a case by case basis. The ultimate responsibilities of OBS are to manage Olympic Broadcasting by supervising the operations of the HB in the Host Cities; to develop a consistent system to run the Olympic Broadcasting operations; to equip the Olympic Games with an efficient approach to successful broadcasts; to make progress in television 12

14 broadcast with state-of-the-art technology; to fulfill all contractual obligations signed by the IOC and the RHBs; and to strive for the optimization of resources and efficiencies of operations. The standards of Olympic Broadcasting will be set at each edition of the Games and the goal will be to keep progressing for the good of the broadcasters, athletes and the Olympic Movement. The IOC, the Commissions and OBS are the key influences in Olympic Broadcasting. 13

15 IV. The Evolution of Olympic Broadcasting 1. First television broadcast of the Olympic Games The Olympic Games were broadcast for the first time in history in the 1936 Olympic Summer Games in Berlin. Before this time, the Olympic Games in Amsterdam (1928) and Los Angeles (1932) were only broadcast on radio limitedly. Two German firms, Telefunken and Fernseh marked the first live television coverage of a sports event. Three electronic cameras and 24 movie cameras were employed to cover the Games. Available only in Berlin and Potsdam, approximately 160,000 viewers gathered in "Public Television Offices" to watch the competitions. At the same time, extensive radio coverage of the Games was broadcast in 28 different languages. After the Second World War, the Olympic Games were resumed in London in New technologies advanced and the Olympic Games grew extensively. Olympic Broadcasting expanded and became more sophisticated at each stage. In London 1948, some events were filmed by three to four cameras for the first time. The domestic Broadcaster of the Host City performed the role and duties of the HB. Only limited viewers in some cities in the country of the Host City had access to the broadcast programs. Only a total of sixty-four hours of the event in London was telecast. In 2004, the global television coverage of the Games in Athens reached 14

16 44,000 hours in total. xii The 1950s witnessed a regress of Olympic Broadcasting. The Helsinki 1952 Games were only broadcast on radio as it remained the major medium then. In 1956, the Melbourne Organizing Committee had the pioneering idea of requesting television broadcast fees from the international broadcast community. Nevertheless, the European Broadcast Union and all three North America broadcasters (NBC, ABC, and CBS) had refused to pay for the access to television feeds. Consequently, the Games were only televised in Australia. 2. Olympic Broadcast outside the Host Country The first time in Olympic history that the Games were broadcast on television outside the Host Country was in During the Olympic Winter Games held in Cortina d Ampezzo, Radiotelevisione Italiana (RAI) used the EBU land line (Eurovision) to supply the Olympic Games footage to Western Europe. The Eurovision was created in 1953 as a concerted production system to link union members and create pool operations to broadcast regional sports programs. Olympic Broadcasting gradually matured and audiences grew in number. The broadcast fees system began. US$1.2 million in broadcast revenues were generated in RAI was once again acting as the Broadcaster of the Host City. Live television feeds were fed to 18 European countries. A total of 21 countries 15

17 received the feeds from RAI. 3. Broadcast by satellite The advent of the new technology of satellite further broke down boundaries set by the oceans. A breakthrough was achieved by the Tokyo Games in The Games were first transmitted by satellite to the world audience. More than 20 states in the USA and Canada received simultaneous signals via the Syncom III satellite. Forty countries tuned in to watch the Games and a total of US$1.6 million in broadcast rights fees were received by the Tokyo Organizing Committee. Friendship and cooperation started to blossom in Olympic Broadcasting in Mexico 1968 which saw major international partnerships. Telesistema Mexicano created a pool with ABC, NHK, CBC and the EBU. All of them sent staff equipped with production equipment and mobile units to cover the Games. Telesistema Mexicano produced the international signal in cooperation with the pool of the international broadcasting organizations. The broadcasters produced their signals individually, and exchanged them among themselves. Six hundred million viewers were recorded for the 1968 Olympics. 4. Host Broadcaster system The Host Broadcast production system began to take shape in Munich The international signal was produced for global distribution which was separate and 16

18 distinctive from the domestic broadcast. The German broadcasters ARD and ZDF formed a special international team to produce the international signal assisted by the mobile units sent by BBC from Britain, NOS from the Netherlands, ORG from Austria, RAI from Italy and SBC from Switzerland. The Host Broadcaster system as it is today was formed in Los Angeles ABC, the U.S. domestic Rights Holder, assumed the role of the Host Broadcaster and served other RHBs with the international signal. Broadcasters then supplemented the international signal with their independently-produced unilateral signals produced by their unilateral cameras. Subsequently, the broadcasters could conduct interviews and closely follow the progress of athletes from their home countries. Up until this point, the domestic Broadcaster of the Host City had played the dominant role in Olympic Broadcasting. The drastic change came in the 1990s - triggered by an amendment to the IOC Media Guidelines. The Host Broadcaster no longer needed to come from the Host City. International broadcast professionals grouped together to form a specialist team to take on the task of producing the international signal for the Olympics. In 1992, Radio Television Olimpica (RTO 92) was set up to become the Host Broadcaster and part of the OCOG. The Host Broadcaster had been a part of the OCOG from 1992 (Barcelona) through 1996 (Atlanta), onto 2000 (Sydney) including 17

19 three Olympic Winter Games. 5. Bid for the Host Broadcaster Another turn happened for the Salt Lake City Winter Games in 2002 when the IOC decided that an international tender process was to seek a company or consortium of companies to bid for the Host Broadcaster s role. International Sports Broadcasting (ISB), consisting of experienced Olympic broadcast professionals, won the bid for the 2002 Host Broadcaster. ISB won a second time the bid for the seat of the Host Broadcaster of the Athens 2004 Games and jointly established Athens Olympic Broadcasting (AOB) with the Athens Organizing Committee to broadcast the Games. 6. Permanent Host Broadcaster - OBS In order to establish a long term consistent approach of the permanent Host Broadcaster system, the IOC announced the establishment of Olympic Broadcasting Services (OBS) in May OBS was funded by the IOC and was to be henceforth under the direct supervision of the IOC. The IOC appointed Mr Manolo Romero to be the Managing Director of OBS. Mr Romero, from Spain, had participated in 20 Olympic Summer and Winter Games since He was also the CEO of ISB and AOB. OBS and the Beijing Organizing Committee for the Olympic Games jointly 18

20 formed Beijing Olympic Broadcasting Co. Ltd (BOB) as the Host Broadcaster for the 2008 Games. The board of directors includes IOC members and BOCOG representatives. BOB would handle the daily operations in Beijing under the supervision of OBS. BOB was staffed with Olympic Broadcast professionals from around the world and local TV specialists. OBS further takes charge of broadcasting operations for the Vancouver Winter Games in 2010 and the London Games in OBS will manage the project from its office in Madrid while creating in time an on-site subsidiary for the daily operations of the Host Broadcast in the Host City. OBS Vancouver Limited (OBSV) was established in Vancouver and OBS London will be established soon. Mr Romero also serves as the CEO of BOB and OBSV. By adapting this continuous approach, the expertise and equipment, experience and proven success could be passed on from Games to Games. There would be no need to rebuild the Host Broadcast operations time and again. The principles of the Olympic Charter will be upheld consistently and continuously. 19

21 V. Olympic Broadcast Polices, Strategies, Programming and Operations 1. Policies and Strategies The IOC is the ultimate owner of the broadcast rights, including television, mobile and internet, for the Olympic Games and Olympic Winter Games. The IOC is also responsible for the allocation of the Olympic broadcast rights to media organizations in every country by negotiating and entering into mutually beneficial agreements with them. The IOC manages Olympic broadcast partnerships in the view of protecting the long-term interests of the Olympic Movement. The principal criteria of assigning television rights to the Olympic Games to broadcasters are based on the guarantee of the broadest coverage throughout their respective territories and the quality of the coverage. Agreements will be signed with broadcasters with prior Olympic broadcast experience. The criteria for awarding broadcast rights will include not only financial consideration, but also the amount of exposure given to Olympic coverage and the quality of the production of that coverage. xiii The long term Olympic Broadcast Partnerships marketing strategies are formulated to achieve the following objectives. First and foremost, the program has to ensure the long-term stable financial foundation of the Olympic Movement and the staging of the Games. The partnerships are established to provide additional Olympic 20

22 programming to improve the global coverage of the Games, to promote Olympism, and finally to enhance global awareness of the Olympic Movement. Broadcasters entering the partnership program are well experienced to produce the highest quality Olympic programs. In these programs, the image of the Games will be strongly advocated, the broadcasters are allowed to firmly associate with the Olympics building their Olympic partner identities within their territories, exposure of the Games will be maximized across the media platforms and new technologies, and the links between broadcasters, sponsors and the Olympic Family will be strengthened. The partnership will forge the legacy of Olympic Broadcasting to carry on in successive Games allowing future OCOGs to utilize the growing pool of support, experience and technology. The broadcasting of the Olympic Games and the Olympic Winter Games are the principal contributor to communicating the ideals of Olympism throughout the world. In pursuit of the primary objective of Olympic Broadcasting - to allow the largest television audience possible to experience the Games - efforts are made to broaden the coverage of the Games in enlarging the territories, markets and on different media platforms by new technologies. 2. Olympic Broadcast Programming The Host Broadcaster is responsible for generating Olympic broadcast 21

23 programs. The television and radio signals are generated from each competition venue and delivered to the Rights Holding Broadcasters and also to the 80,000 meter square International Broadcast Centre. The Broadcasters will then air the programs over various media platforms in their territories throughout the world. Made possible by new technologies and capacities, the Host Broadcaster has greatly expanded to include live feeds of every sport and ceremonies including the Opening, Closing and Medal Ceremonies. In August 2008, forty Olympic TV Channels produced by Beijing Olympic Broadcasting (BOB), the Host Broadcaster, will feed the Rights Holding Broadcasters with the sports competitions taking place in 44 venues. Approximately 1,000 cameras will be employed to cover all the sports to cater for the audience in 220 countries. The RHBs will choose at their own discretion the programs to be transmitted to their countries, including the competition footage, beauty shots of all the Co-Host Cities and their selfproduced unilateral signals. Although the full range of available ITVR Signals will be impartial, the RHBs can choose to deliver the sports and athletes of greatest interest to their target audience. Hence, broadcasters will air different programs at the same time. Some programs will be aired live and some at a later time. The flexibility and capacity of programming will allow a more comprehensive coverage of all the events. The IOC will work with all the Broadcast 22

24 Partners how to deliver full coverage of the Games to a global audience. Latest technologies will always be exploited to enforce this goal. A big advance from the Athens 2004 which was partially broadcast in High Definition, the 2008 Olympics will be fully broadcast in High Definition and discrete 5.1 surround sound system. Of course, the countries not yet adopting the HDTV system will still be broadcasting in Standard Definition format. 3. Olympic Broadcasting Operations The Host Broadcaster works coherently with the Organizing Committee. It manages its staff and advises the Committee on all issues relating to the broadcasting of the Games. Starting from the infrastructure of the IBC and all the competition venues, the Host Broadcaster designs the facilities to be constructed by the Committee. The IBC houses the Host Broadcaster, equipment, satellite farms and provides operational spaces at a cost for all Rights Holding Broadcasters. At each competition venue, the Host Broadcaster will operate mainly at the Broadcast Compound, equipped with the Technical Operation Centre, the HB office, dining area, kitchen, outside broadcast vans and satellite news gathering vans, and the RHB cabins. Most importantly,, the HB will place the 1,000 cameras (as in Beijing 2008) at the best positions at the 44 venues to capture the best quality coverage of all the events. 23

25 All ITVR Signals are transmitted to the IBC using the latest technology. In 2008, the ITVR Signals will be transmitted to the IBC in Beijing using optic fiber, no matter whether the venue is in Hong Kong, Shanghai or Qinghuangdao, to avoid the illegal interceptions of satellite signals. The main RHB operation areas include Commentary Positions, the Mixed Zone, the Press Conference Room and the Broadcast Information Office. The Commentary Positions are located at the spectators stand where the RHB will rent and place their own commentators to comment on the competition. The commentary together with the ITVR Signals and/or their unilateral signals will be transmitted to their own countries. The Mixed Zone is located next to the Field of Play where the competitions take place. Athletes are obliged to pass through the Mixed Zone housing the RHBs and the press respectively, but they are not obliged to answer any questions. The Press Conference Room will serve both the RHBs and the press with camera platforms and photographers seats to meet the medalists. The Host Broadcaster will also advise the Organizing Committee on the television lighting for the Field of Play, the Mixed Zone and the Press Conference Room. In order to guarantee a smooth and unobstructed broadcast of the Games, the HB will also comment on the operations of the competition venues by the Committee including competition schedules, venue technical provisions, telecommunications, 24

26 broadcast accreditation and zoning, transport arrangements for the media and broadcasters, security issues, logistic facilities and media accommodation. 25

27 VI. The Contribution of Olympic Broadcasting to the Olympic Movement 1. Greatest source of revenue generation The IOC is a non-governmental, non-profit organization. Sources of revenues for the Olympic Games are TOP (The Olympic Partners) program, Domestic Sponsors, Broadcast Partners, Ticketing and Licensing. Illustrated in the below table, broadcast revenues contribute to around 50% of the total Olympic generated revenues, totaling the revenues derived from the four other sources. Revenues Generated by IOC and OCOGs for the quadrennia and (in millions of USD) Source Broadcasting 1,845 2,232 TOP program Domestic sponsorship Ticketing Licensing Total 3,770 4,125 (Source: The IOC Factsheet: Revenue Generation and Distribution Update - December 2005) 26

28 For more than thirty years, Olympic broadcast partnership has remained the greatest source of revenue for the Olympic Movement. Broadcast rights fees started contributing to the hosting of the Olympic Games in Looking at the increases in the Olympic broadcast revenues generated in the past twenty to thirty years which contributed significantly both to the success of the Olympics and to the support of the Olympic Movement, including the IOC, NOCs and IFs, the IOC may be advised to relax on the sound financial support given by the government. Mr Romero, Managing Director of OBS responded to the following question. It was said that the Olympics were not able to survive in the 1980 s. However, the revenues from TV broadcasts have saved the Olympics. How did the marketing strategies for the Olympics evolve? He replied, From a financial standpoint, the Olympics became a more valuable product in the 1980s due to more aggressive marketing plans implemented for the 1984 Games in Los Angeles and the increasing revenue generated from the sale of the broadcasting rights throughout the world. In order to develop greater stability and growth, the IOC built more long-term relationships with broadcast organizations by reaching agreements over multiple Olympic Games. With broadcast contracts covering successive Games, broad television coverage was secured as was 27

29 the financial security of the future Host Cities and ultimately, the overall Olympic Movement. The 1984 Games in Los Angeles had set the model for successive Games. After the terrorist attack in Munich 1972 and the financial recession of 1976, Los Angeles was the only candidate city to bid for the right to host the 1984 Olympic Games. It was the first time since 1896 that the Games were staged without government financing. The organizers had to depend heavily on existing facilities and corporate sponsors. Broadcasting of the Games became a huge source of revenue. Large amounts of broadcast rights fees rolled in. At the end of the Games, it was reported that the Organizing Committee had generated a profit of US$ 223 million. xiv The 1984 Los Angeles Olympic Games set a perfect example for future Games. 2. Broadcast Revenue: Contributions to the Olympic Movement The IOC distributes 49% of the Olympic broadcast revenue to the Organizing Committee to support the staging of the Games and 51% throughout the Olympic Family, providing financial support to the NOCs, the IFs, and the IOC to promote sports and the Olympic ideals, according to the 2008 Olympic Marketing Fact File (Appendix 5). Prior to 2004, the percentage distributed to the Organizing Committee was 60%. However, as the broadcast revenues are continuously rising, the actual amount of the contributions will increase despite the decrease in the 28

30 percentage. 3. Government support However, the IOC still regards government support as one of the prerequisites of the success of staging the Games. In the selection process of the Host City, the stable funding supported by the government remains a critical criterion in the decision making. In the April 2001 Report of the IOC Evaluation Commission for the Games of the XXIX Olympiad in 2008, Beijing was chosen as one of the three final candidate cities that would stage an excellent Games together with Toronto and Paris. The comments of the Commission on Beijing included, The Commission is confident that the comprehensive Government involvement and underwriting for all OCOG and non-ocog financial aspects of the bid mean the budgets are fundamentally sound. (P.63) and The presence of substantial guarantees on construction of sports venues and additions to infrastructure from both National Government and the Beijing Municipal Government are strengths of the bid. The budget, fully backed by the Government, is viable and sound. (P.74) 29

31 VII. Financial statements and Viewership of the recent Olympic Games Olympic Games Broadcast Rights Fees History: Regional Contribution Million Million Million US US US Territory Broadcaster 2000 Sydney % 2004 Athens % 2008 Beijing % USA NBC % % % Canada CBC 28 2% 37 2% 45 2% Central/South America OTI 12 1% 18 1% 28 1% Caribbean CBU % % % Puerto Rico Telemundo 1 0% % % Asia ABU 12 1% % % Japan Japan Pool 135 9% 155 8% 180 8% Arab States ASBU 4.5 0% 5.5 0% 8.5 0% Korea Korea Pool % % % Europe EBU % % % Australia Channel % % % New Zealand TVNZ 10 1% 3.5 0% % 30

32 1. USA, Europe and Caribbean Broadcasting Partners The figures in the table before calculations were drawn from the Olympic Fact File 2008 Edition. USA continues to be the most important broadcasting partner of the Olympic Games, contributing to 40% of the total broadcast revenues. Caribbean Broadcasting Union and European Broadcasting Union each contribute around 20% of the total. Japan alone accounts for almost 10% of the world s total. Considering that Japan is relatively small in geographical territories, the proportion of its contribution to the Olympic broadcast revenues is large. USA and Japan can be said to be more enthusiastic to the Olympic Games than the others. It is also worth noting that a single broadcasting organization bid for the television rights in USA, Canada and Australia among the important broadcasters. Most others bid for the rights by its broadcasting unions, such as Asia Pacific Broadcasting Union, European Union and Caribbean Broadcasting Union. One of the factors will be historical as the regions bidding for the rights started the bidding process by the unions. However, the insight can be the keener and more intensive competition in the television business in USA, Canada and Australia than the other regions. 31

33 2. Increase in Broadcasting Rights Budget Olympic Games Broadcast Rights Fees History: Budget Increments Million Million Million US US US Region Broadcaster 2000 Sydney 2004 Athens +/- % 2008 Beijing +/- % USA NBC % % Canada CBC % 45 22% Central/South America OTI % 28 56% Caribbean CBU % % Puerto Rico Telemundo % % Asia ABU % % Japan Japan Pool % % Arab States ASBU % % Korea Korea Pool % % Europe EBU % % Australia Channel % % New Zealand TVNZ % % There has been a very steady increase in the broadcast budgets putting on the successive Games. USA, Europe and Korea all placed a 13% increment on the 32

34 broadcast rights agreement from 2000 to Japan is steadily increasing the budget by 15%. Drastic changes are seen in Caribbean, the Arab States, Australia and New Zealand. The Arab States are getting rich and the spill over effects of the Doha Asian Games 2006 ignited the passion of Arab populations in the Olympic Games. New Zealand put a lot of effort into covering the Sydney 2000 Games due to the vicinity factor and reverted to the moderate approach of spending 3 to 4 million US on the broadcast rights. Australia is becoming more aggressive as a result of the keen competition in the media business. In general, the Olympic Movement is gaining more attention and respect. The global audience is increasingly interested in watching the Games and getting more enthusiastic about supporting the athletes from their countries by watching the Games. 3. Increments in Coverage of the Games and Viewer Hours The following tables indicate the coverage of the Sydney 2000 and Athens 2004 Games on television and the viewer hours. The numbers were taken in the countries with audited people-metered systems only. Total Viewer Hours allowed for comparison between events with different program duration. The coverage of the Athens 2004 Games increased largely when compared to the Sydney 2000 especially in Asia and Europe, with an increase of 60% and 38% 33

35 respectively. Despite the different time zone between Asia and Athens, the increase of coverage showed the immense importance placed on the Games. Coverage of the Last Two Games and Viewer Hours Sydney 2000 Athens 2004 Coverage Viewer Hours Coverage Viewer Hours* Region hh:mm hh:mm Africa 160:00 216,917, :54 90,650,292 Asia 3766:31 17,961,441, :39 17,133,248,647 Central/South America 3229:20 4,586,772, :05 4,107,672,915 Europe 10331:27 4,463,681, :32 7,049,285,544 North America 1196:56 2,458,493, :49 2,890,348,862 Oceania 1454:08 847,285, :08 495,762,095 *Viewer Hours: The total number of hours watched by all viewers (program duration x program audience) in terms of defining the popularity of the event. As the viewer hours in China reviewed only the viewing on the national CCTV network, the transmissions by regional broadcasters were not included in this survey, the total number of viewer hours would definitely exceed the numbers in the table. The fall in the coverage and viewer hours in Oceania could be linked to the 34

36 fact that Sydney was the Host City in It would be predictable that people in Australia and New Zealand would not be as keen to watch the Games as they were in Increment/Decline of Coverage and Viewer Hour from Sydney 2000 to Athens 2004 Region Coverage +/- Viewer Hour +/- Africa 26% -58% Asia 60% -5% Central/South America 6% -10% Europe 38% 58% North America 28% 18% Oceania -45% -41% (Source: Athens 2004 Olympic Games Global Television Report. International Olympic Committee. December 2004) The above figures are indicative but will not predict future trends with one hundred percent accuracy. The Olympic Movement and awareness are on the rise. More budgets and more resources will be spent on the coverage of the Games. Logically, more audience will be captured to watch the Games in 2008, especially in Asia and Oceania. The tide will turn to Europe when the Games move to London in 35

37 2012. Mr Manolo Romero told the author, The television coverage and the interest in the Games have just continued to grow. My first Games in Mexico City in 1968 drew somewhere around 600 million viewers. In Athens, 3.9 billion viewers in 220 countries watched some of the Games and I expect those numbers will escalate in Beijing. 36

38 VIII. The Emergence of New Media Partner of the Olympic Games 1. New Technologies, Greater Choice The plethora of alternative real-time media to follow events and several technological firsts allowed audiences to share the Athens 2004 Olympic Games experience in immediate and dynamic ways. xv Live broadcast started to be available on Internet and Interactive TV. Video and highlights clips could be streamed on the mobile phone handsets from dedicated Olympic websites via the Internet. Some Olympic programs are available in High Definition. In the Beijing 2008 Games, all programs are produced in HDTV and discrete 5.1 surround sound. Huge strides are being made in Olympic Broadcasting. Technologies are shaping the broadcasts of the Games. In the UK, interactive TV was popular. During the Athens 2004 Games, around 58% of interactive TV users made use of the button which empowered them to tailor their own Olympic programming according to their sports of choice. 8.9 million viewers used the interactive service provided by BBC. NBC video highlights on their website received 12.2 million visitors. Further development of the interactive service could enable offerings from broadcasters to audience the choice of programming every single event into a single channel in the coming Games. 37

39 Satellite transmissions enabled the live coverage of the Games to be brought to millions and subsequently billions of viewers throughout the world. Prior to the use of satellite coverage, the range of the feed was often limited to the host country and the coverage was most often delayed. Today there are satellite and optic fiber. In the future other technologies like IPTV will be utilized, said Mr Manolo Romero. 2. Free-to-air TV No Longer Guarantees Broadest Audience In the IOC Internet Guidelines for Rights Holding Broadcasters, Beijing 2008, it was written, The Internet can enhance the quality, presentation, immediacy and comprehension of Olympic Broadcasts, and the IOC encourages all such enhancements. The IOC will continue to work closely with broadcast right-holders in developing suitable promotional opportunities on-line. In December 2007, the IOC announced an agreement with CCTV.com assigning the Internet and mobile platform exhibition rights within China for the Beijing 2008 Games. CCTV was already the Rights Holding Broadcaster in China. CCTV.com was selected on the basis of its capacity over a range of digital platforms and its commitment to promote the Games and the Olympic Movement. Jacques Rogge, IOC President, said: The Beijing 2008 Olympic Games will be a landmark moment in Olympic history, and is obviously an event of huge 38

40 national interest in China. When this is coupled with China's digital media potential, it means our agreement with CCTV.com represents a very exciting partnership for the Olympic Movement. In November 2007, the IOC announced an agreement with Television New Zealand (TVNZ) for the internet and mobile platform exhibition rights within New Zealand for the Beijing 2008 Olympic Games. TVNZ was also the free-to-air Rights Holder. The Beijing 2008 Games will be a milestone for new media broadcast of the Olympic Games. In April 2008, the IOC announced the agreement signed with the Japan Consortium (Japan Broadcasting Corporation and the National Association of Commercial Broadcasters in Japan) for the broadcast rights within Japan for Vancouver 2010 and London 2012, including free-to-air television, subscription television and digital media (internet and mobile phone). In February 2008, the IOC announced an agreement with SKY Italia for the broadcast rights within Italy for Vancouver 2010 and London 2012, across all broadcast platforms, including free-to-air television, subscription television, internet and mobile phone. New Media surely are bringing changes to Olympic Broadcasting. In the 39

41 Olympic Charter, the principle of TV broadcast is to the widest audience through free to air television. However, television and new media rights of the 2010 Olympic Games and London 2012 Olympic Games are awarded to Cable TV for the Hong Kong territories. The IOC entered into an agreement with i-cable Sports Limited for the exclusive Internet and mobile platform exhibition broadcast rights within Hong Kong for Beijing i-cable had already acquired the exclusive Broadcast and Exhibition rights across all media platforms for Vancouver 2010 and London 2012 within Hong Kong. The free-to-air television broadcast does not necessarily link to the broadest audience. A media organization with a variety of established exhibition platforms will be considered as having an advantage over the traditional free-to-air television. The IOC in the press release stated having done the assessment on the capacity to reach the broadest possible audience on a variety of broadcast platforms, the ability to meet the highest standards in Internet and broadcast quality and security, and the commitment to promoting the Olympic Games and the values of the Olympic Movement. The question towards pay TV and free-to-air TV was raised to Mr Manolo Romero. He replied, In many countries, cable television is seen in a comparable number of homes as free-to-air. The IOC continues with its plan to make the Games 40

42 available to as many potential viewers as possible and some of these viewers will come from non-traditional sources. Therefore, the IOC will attempt to identify which television partners can deliver as many options of distribution as possible. 41

43 IX. Changes brought about by the new media to Olympic Broadcasting 1. Autonomy The Internet and other forms of media or communication are playing an ever-growing role in the interaction between the Olympic Movement and its audiences. The impact of the emergence of these new media or communication technologies in relation to the manner in which the IOC brings the Olympic Games experience to the world and in which it generates its revenues may be significant. The IOC will continue to work with the Rights Holders to determine how best to capitalize on new media technologies to enhance the broadcast experience of the Olympic Games. xvi The changes will be brought about in big leaps forward. There is no turning back. New media enables non-tv watchers to watch the Olympics on mobile phones and on the Internet. More platforms logically will attract more viewers to the Games. The interactive TV, streaming of video clips and Internet will enable people to watch at a time of their choice. Programming will not be fixed. Individual viewers will be empowered to make choices. The broadcasting partners will change gradually; either joined together with other digital platforms or shifted away from single platform media organizations. Internet and new media guidelines may be issued by the IOC for each 42

44 edition of the Olympic Games specifying how the Rights Holders and other accredited media can use the Internet and other forms of media and communication technologies. These guidelines will be established in the best interest of the Olympic Movement with a view to protecting the interests of the Rights Holders. Such policies and guidelines will depend largely on the development of these new technologies. xvii The importance of Internet will grow in Olympic Broadcasting. With the Games in Beijing, the IOC has partners for the first time in the non-traditional mode of distribution. The New Media rights holders will enable more people to have access to the Games when and how they choose, which enables the Olympics to further extend its presence to more viewers. said Mr Manolo Romero. Already in the forthcoming Beijing 2008, various technologies are being adapted in order to serve all of the broadcasters new or different requirements. First and foremost, a high-quality signal will be produced from all of the venues and delivered to the Rights Holding Broadcasters at the IBC. This video and audio package will be made available to the traditional broadcast partners in High Definition. But for the first time in Beijing, a special New Media package will also be made available for their particular needs. This package, available in multiple different bandwidth levels, will carry the same feeds as our standard video and audio package and also be provided in HD. The Rights Holders will choose the ultimate distribution 43

45 platform. 2. Threats to Traditional Free-to-air Television Many of the traditional broadcasters are also engaged in New Media. All broadcasting distributors are actively taking advantage of new technology so it is not necessarily a difference between old and new. The distribution method or platform may be different but the distributors may be the same. When will be the time when Internet becomes as imminent as traditional television? One answer will be, only time will tell, when and if, these platforms have as many viewers as traditional methods of distribution. At the same time, the New Media will certainly broaden the accessibility and the audience of the Games and this can only serve to further strengthen the Olympic Movement. 3. Supplementary Functions of New Media to Traditional Television According to Alan Zhang, the Deputy Director of Baidu.com, Internet and television will benefit each other. Internet provides more choices for the users. It is also more interactive. Television is easy to appreciate especially for the non-regular computer users. It is a different way of life for different people. The contents of the programs will be different as well. Will new media develop into the main stream of appreciation of the 44

46 Olympic Games? In the short term, television will still be the main stream for Olympic Broadcasting. However, broadcasters will exploit different media if possible to cater for the needs of different audience. Further, the different needs may actually be created by the broadcasters if there are more choices available. Take the example of China, the population is 1.3 billion. Television covers 95.81% of the population, which indicates that the television population could be as high as billion. Internet users in China amount to 170 million people. Internet is far from being a direct competitor of television. Nonetheless, the influence of Internet on society and life style is growing gradually. 45

47 X. Conclusion In 1894, founder of the modern Olympic Games, Pierre de Frédy, Baron de Coubertin intended to revive the Games for the sake of peace, culture, education and sports. He had not thought of the Olympics being watched by the world s citizens around the globe at the same time despite the time zone differences. He spent his fortune on promoting the Games. He had not considered the Olympics as a magnet for revenue. The IOC, thanks to its non-government non-profit status, can remain uninfluenced by political and economic forces. The revenues from Olympic Broadcasting and other TOP and marketing programs enable the Games to remain neutral to exterior forces. Instead, the Olympic Games are influencing the world. At least for the period during the Games, people from many countries will sit at the competition venues and some 4 billion audiences in 220 countries will sit in front of the television, the computer or their mobile phones and appreciate the Games. Changes will happen and new media or new technologies will push the Games and the Olympic Movement forward. The changes will happen quicker in the new millennium than in the last one. That coincides with the Olympic Motto, Citius Altius Fortius. THE END 46

48 Appendix 1: Biography of Mr Manolo Romero, Managing Director of OBS Manolo Romero is regarded as one of the leading executives in internationally televised sporting events. With a career spanning more than 40 years, Mr. Romero has been involved with the television coverage of every Olympic Games both Summer and Winter since the 1968 Olympic Summer Games in Mexico City. Currently, Mr. Romero serves as the Managing Director of Olympic Broadcasting Services (OBS). OBS was created by the International Olympic Committee (IOC) in May 2001, marking a new era in the broadcasting of the Olympic Games. OBS was formed to serve as the permanent Host Broadcaster for future Olympic Games. The OBS obligations have commenced with the 2008 Olympic Games in Beijing. For the 2008 Olympic Games, OBS and the Beijing Organizing Committee (BOCOG) formed Beijing Olympic Broadcasting (BOB). Under the guidance of Mr. Romero, who serves as the organization s CEO, BOB is responsible for the Host Broadcast of the 2008 Games. At the same time, Mr. Romero serves as CEO of Olympic Broadcasting Services Vancouver (OBSV), the on-site Host Broadcaster for the 2010 Olympic Winter Games and continues planning efforts with OBS for the upcoming Games in 47

49 London (2012) and Sochi (2014). Prior to the development of OBS, Mr. Romero served as the Chief Executive Officer of the Torino Olympic Broadcasting Organization (TOBO), the Host Broadcaster for the 2006 Olympic Winter Games. In addition to his role with OBS, Mr. Romero is also the President/CEO of International Sports Broadcasting, which he established and which served as the Host Broadcaster for the Salt Lake City 2002 Olympic Winter Games. ISB was also awarded the contract and, in partnership with Athens 2004, formed Athens Olympic Broadcasting (AOB), the Host Broadcaster for the 2004 Games. Mr. Romero served as the Managing Director of AOB. ISB also served as Host Broadcaster for the 2007 Pan American Games in Rio. During previous Olympic Games, Mr. Romero served as the Chief Executive of Sydney Olympic Broadcasting Organization (SOBO) for the Sydney 2000 Olympic Summer Games and Chief of Atlanta Olympic Broadcasting (AOB) and Managing Director of the Atlanta Committee for the Olympic Games (ACOG) for the 1996 Olympic Games in Atlanta, and the Organización de Radio y Television Olímpica (ORTO) of the 1992 Olympic Games in Barcelona. Mr. Romero previously served as the Head of EBU Sports Operations for Production for the 1998 Olympic Winter Games in Nagano and Head of EBU Sports 48

50 International, where he managed the production of the World Feed for the 1994 World Cup. A native of Seville, Spain, Mr. Romero began his career in 1965 in the engineering department for TVE, a Spanish television network, and quickly rose to direct that division and was placed in charge of the Host Broadcast operations for the 1982 World Cup in his native land. He then joined the American Broadcasting Company (ABC) as its Director of European Operations and later was named head of International Operations for ABC at the 1984 Olympic Games in Los Angeles. His duties included overseeing the Host Broadcast coverage supplied to the world by ABC, for which he received an Emmy Award. Mr. Romero has received a total of seven Emmy Awards during his career. He has also received two Ondas Awards, a Spanish television honor and was named Engineer of the Year in Spain earlier in his career. Following his work on the Barcelona Games, he received the Golden Rings, the highest honor given by the IOC, and the Medal of the City from the leaders of Barcelona. Mr. Romero received a degree from the University of Madrid, majoring in telecommunications engineering with a minor in economics. He later served the University as an Assistant Professor of Engineering. 49

51 Appendix 2: Countries Broadcasting the Olympic Games (Source: Olympic Marketing Fact File 2008 Edition) Olympic Games Number of Countries / Territories Broadcasting 1936 Berlin London Helsinki Melbourne Rome Tokyo Mexico City n/a 1972 Munich Montreal Moscow Los Angeles Seoul Barcelona Atlanta Sydney Athens

52 Appendix 3: Countries Broadcasting the Olympic Winter Games (Source: Olympic Marketing Fact File 2008 Edition) Olympic Winter Games Number of Countries / Territories Broadcasting 1956 Cortina Squaw Valley Innsbruck Grenoble Sapporo Innsbruck Lake Placid Sarajevo Calgary Albertville Lillehammer Nagano Salt Lake City Torino

53 Appendix 4: Olympic Games Broadcast Revenue History (Source: Olympic Marketing Fact File 2008 Edition) Olympic Games Broadcast Revenue 1960 Rome US$1.2 million 1964 Tokyo US$1.6 million 1968 Mexico City US$9.8 million 1972 Munich US$17.8 million 1976 Montreal US$34.9 million 1980 Moscow US$88 million 1984 Los Angeles US$286.9 million 1988 Seoul US$402.6 million 1992 Barcelona US$636.1 million 1996 Atlanta US$898.3 million 2000 Sydney US$1,331.6 million 2004 Athens US$1,494 million 2008 Beijing US$1,737 million (estimate to date) 52

54 Appendix 5: Olympic Broadcast Revenue Distribution 49% is provided to the OCOG to support the staging of the Games. 51% is distributed throughout the Olympic Family to support the Olympic Movement worldwide. This revenue is shared among the NOCs, the IFs, and the IOC. (Source: Olympic Marketing Fact File, 2008 Edition) 53