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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerYesterday, the under-performing conglomerate announced that it had sold $1 billion in advertising for the games.
"We've always said that the Olympics is one of the most powerful properties in all of television," said Seth Winter, Senior Vice President Sales & Marketing NBC Sports & Olympics, said in a press release. "While we are thrilled with this milestone, we still expect to write more business as the Games begin and great stories continue to evolve."
Of course, such gushing is to be expected from an ad sales guy. But one thing that often gets forgotten when people write about television advertising is that commercial time is sold based on the network guaranteeing that a certain number of viewers will watch the show. If the audience does not materialize, the network has to give what's known as a make-good: usually free commercials on another show. The viewer numbers NBC has to hit are a closely guarded secret.
But it's important to remember that past Olympics have not been successes. For instance, the 2006 Winter Olympics in Torino, Italy, was the least watched Winter Olympics since at least 1988 averaging 20.2 million viewers, according to USA Today.
Moreover, the games are being held in August, a time when many Americans are on vacation and way from their TV sets. CNBC's Julia Boorstin points out that the "Olympics are far more than just a boost for NBC Universal, they're also an unprecedented experiment with online content distribution, bound to transform the way media companies distribute their content." If she's right, does it really matter for GE's bottom line?
For GE's shareholders, the games underscore their Olympic-sized frustration. Even if the games are a resounding success, their impact is too small to help the embattled conglomerate whose shares have slumped xxx percent this years. There is no thrill of victory there unless GE decides to spin-off NBC Universal.
Moreover, the games are being held in August, a time when many Americans are on vacation and way from their TV sets. CNBC's Julia Boorstin points out that the "Olympics are far more than just a boost for NBC Universal, they're also an unprecedented experiment with online content distribution, bound to transform the way media companies distribute their content." If she's right, does it really matter for GE's bottom line?
For GE's shareholders, the games underscore their Olympic-sized frustration. Even if the games are a resounding success, their impact is too small to help the embattled conglomerate whose shares have slumped xxx percent this years. There is no thrill of victory there unless GE decides to spin-off NBC Universal.
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Reader Comments (Page 1 of 1)
8-09-2008 @ 1:36PM
Bill Rothschild said...
I totally agree that when you are dealing with a $175 billion company...nothing really makes a major impact. This is one of the disadvantages of the Immelt "GO BIG/ GO GLOBAL" game plan. I would prefer the opportunity to purchase pieces of GE than the total conglomerate. "Tracking stocks" should be considered...
Bill Rothschild, author of The Secret to GE's Success (now in Simplified Chinese and five other languages) and GEWatcher blog (www.strategyleader.com)...