The 2016 Summer Olympics in Rio de Janeiro illustrated well the differences that are still prominent between the old media and new.
Some of those controlling such traditional media as newspapers, magazines, television networks, and movie studios feel it’s against their financial interests for consumers to have access to too much content through digital media that streams over the Internet through such devices as smartphones, tablets, and notebook computers. In a nutshell, they believe they make more money by limiting our choices.
With the 2016 Olympics, the key player was NBC. The National Broadcasting Company has been around as a TV network since 1939 and as a radio network since 1926, when it was called Radio Corporation of America (RCA), making it the oldest major broadcast network in the U.S. It has undergone huge changes since.
The biggest recent change happened in 2011, when Comcast partially acquired NBC’s parent company, NBC Universal, from General Electric, and in 2012 when Comcast acquired the remainder.
Comcast is the largest cable TV as well as the largest home Internet provider in the U.S. It makes most of its money from subscription fees.
Ever since its inception in 1969 as Arpanet through funding by the U.S. Department of Defense, the Internet has been largely about free. “Information wants to be free” is an Internet slogan that’s been around since 1984, well before the Internet exploded into popular consciousness in the mid-1990s.
According to many, the same can be said not only about text but also about music, video, and other content. This creates a free versus fee dialectic that’s been central to the Internet’s character since the late 1990s.
The free part of free versus fee is a huge reason for the Internet’s popularity. It’s also a huge thorn in the side of those who want to profit from the Internet. Because online advertising still isn’t yet a viable means for many--not all--companies to profit from offering free content, they try to limit your access to it unless you pay.
Comcast, which was founded in 1953 as a cable TV company, is among the large companies trying to limit your access to free Internet content. This is playing out in a big way with the Olympics.
Comcast-owned NBC didn’t let you stream live video of the Olympics unless you got “authenticated” by being a subscriber to it or another pay TV provider, whether cable, telco, or satellite, or unless you used a legal or quasi-legal/ethical workaround.
At its Olympics website, NBC said the rationale for this is, “Authentication supports our ongoing investment in sports programming for all of our platforms and is consistent with industry trends. Digital platforms require significant investment, and authentication allows us to capture the value of that investment.”
NBC invested heavily in the Olympics itself, paying $1.23 billion to the International Olympic Committee and other Olympic organizers for the rights to the 2016 games.
If you tried to stream live video of the Olympics without being authenticated, you got an error message.
NBC did provide short ad-supported video highlights of key Olympic events through its NBCOlympics.com website and even shorter ad-free video highlights on its NBC Sports YouTube channel. You could watch commercial-supported time-delayed and live events on TV over the air through your local NBC TV channel. YouTube was quick in taking down video highlights uploading by viewers, posting the message, “This video contains content from the International Olympic Committee, who has blocked it on copyright grounds.”
For cord cutters—those no longer wanting to shell out increasingly expensive fees for pay TV service—workarounds to view live streams included “borrowing” the pay TV credentials of a friend or family member, using a virtual private network (VPN) service to make it appear as if you’re connecting to the Internet from another country, or paying for a Sling TV or PlayStation subscription or taking advantage of their free trial offerings.
NBC first provided live streaming to the Olympics in 2008. The requirement of a pay TV subscription came after the Comcast acquisition. Through contracts with the International Olympic Committee, NBC has paid a whopping $12.13 billion to carry the world’s premier sporting event through the 2032 games.
Different companies have different business models, and some do quite well relying on online advertising as their primary source of revenue, including Google and Facebook. As an indication of changing times, in July 2016 the five most valuable American companies in terms of market capitalization were digitally oriented—Apple, Google, Microsoft, Amazon, and Facebook.
Reid Goldsborough is a syndicated columnist and author of the book Straight Talk About the Information Superhighway. He can be reached at email@example.com or reidgold.com.