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Why the Internet continues to be NBC's Olympic headache

As the world settles in to watch the first truly broadband Olympics, too many big media creators still judge the Web to be more of a foe than a friend. Meanwhile, the masses are voting with their eyeballs.

Sometimes things don't work out as planned but still it's all to the good. That's the case with the early data for NBC's telecasts of the Beijing Olympics.

Heading into the games, a big question on the minds of NBC execs was whether Internet video and piracy would erode TV viewership.

If the first couple of days offered a harbinger, it was all much ado about nothing. As the world settles in to watch the first truly broadband Olympics, too many big media creators still judge the Web to be more of a foe than a friend. But the masses are voting with their eyeballs. Turns out these Summer Games are the most watched in the last decade--coinciding with similar record viewership over the Internet.

This comes as a counter-intuitive--albeit pleasant--surprise to the likes of General Electric and Disney and all the other content creating factories. Anxious to mollify the concerns of its affiliates, NBC, which owns exclusive broadcast rights to the games, decided to offer only 75 percent of its live coverage of the Olympics via its Web site.

Bad decision. The zero-sum argument that the Internet's gain always comes at the expense of professional producers of content doesn't stand up to inspection. In Hollywood, of course, it's an article of faith. In fact, the Motion Picture Association of America issued a report last year claiming that movie studios lost $2.3 billion because of pirated downloads.

How then to explain the success of The Dark Knight? The new Batman movie chalked up the biggest opening weekend of any film this year accompanied by what was described as "an unprecedented" antipiracy copyright campaign by Warner Bros. Staving off pirates likely had less to do with the great box office gross--and sales continue to boom--than it did with making a movie that people wanted to see. Some free word-of-mouth PR didn't hurt either. Studio execs said they were anxious to avoid what happened to The Incredible Hulk. That film got off to a decent start but box office proceeds fell as word of mouth spread. Hollywood blamed online viewing. Any chance it was the quality of the film?

Back to the Olympics and it seems that history is repeating itself. Watching the Olympics on Internet (authorized and unauthorized) transmissions is turning out to be a powerful advertising tool for the games. This is turning out to be less a question of control than of product quality. So far the evidence suggests that if it's any good, the buzz will bring out more people to watch on the big screen.

BTW, on today's CNET News Podcast, I spoke with Webware's Rafe Needleman about his ideas on how to square this circle. (The segment is toward the end of the podcast if you want to fast-forward.)

Listen now: Download today's podcast

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