NBC, sports site ink Olympic coverage deal
Quokka Sports is gambling the Olympics can bring it Internet gold in what analysts are calling a risky online partnership with NBC.
In a joint NBC/Quokka Ventures deal announced this week, the company plans to provide up-close-and-personal coverage of the Olympics in a bid to raise its profile and boost traffic. But Quokka's agreement with the network is no slam dunk, according to analysts, who point out that most production costs fall to the sports company, and any potential profits must be shared with NBC.
NBC has also signed an agreement with the U.S. Olympic Committee to sell official USOC and Sydney Olympic merchandise through a new online store in the spring.
The deal comes as a cloud continues to hang over online coverage of the Olympics.
Analysts said the International Olympic Committee (IOC) has banned all Net ventures from streaming or allowing people to download video clips of the games, which has caused an uproar among news sites hoping to cover the event.
Tom Newell, general manager for NBC/Quokka Ventures, said the IOC is still negotiating Web video broadcast rules, which appear to be loosening. Last week, content distribution company Axient Communications announced a deal with NBC to use its technology to deliver broadcast video of the summer games to the United States from Australia.
Newell said the IOC has granted NBC/Quokka Ventures permission to broadcast NBC coverage over the Web to residential broadband users.
Regardless of the risks of its Olympics coverage, Quokka hopes the event will drive up its traffic numbers, which need help.
Quokka's Web sites gives fans a taste of adventure sports such as sailing, auto racing and mountain climbing. While sports sites are among the Web's most popular destinations, Quokka has lagged the field despite its innovative offerings.
According to Media Metrix's digital media report for the month of June, ESPN's network of Web sites led among sports destinations on the Web with 5.3 million unique visitors, while CBS SportsLine had 3.9 million, and CNNsi.com had 2.2 million.
By contrast, Quokka had only 247,000 unique visitors for the month of June.
Nevertheless, Quokka believes its programming is sufficiently different to draw repeat customers from the Olympics offering.
"We're about delivering the experience of the athlete to the user," Newell said. "I think today a lot of sport Web sites are more like electronic newspapers: They'll give you a 600- or 800-word article, a small photo, and a few statistics, and that's it. We try to get you closer to the athlete."
Even if Quokka succeeds in drawing new traffic through its Olympics coverage, analysts said the results may not translate into profits.
"We still have to worry about the aftermath of the deal," said Idil Cakim, an analyst for Cyber Dialogue. "If Quokka gets more traffic or considerably more traffic than they used to get before...(and) Quokka is also sucking up all the production costs in this...it's all on them to figure out ways to monetize on this experience."