U.S. TV networks take new risk by airing shows against Olympics

The Olympics are such a television ratings juggernaut for NBCUniversal that rival U.S. networks have always watched from the sidelines, airing reruns and other cheap programs that are not going to attract many eyeballs.

But not this year.

With a growing number of people now viewing shows on-demand, CBS Corp (CBS.N) and Discovery Communications (DISCA.O) for the first time plan to pit new or popular shows against the global sporting event.

CBS, for example, will debut a scripted series about politics by the creators of hit show “The Good Wife.” Not to be outdone, Discovery is bringing back its popular series “Naked and Afraid XL” — a reality show where contestants must survive in the wilderness for 40 days with only one or two items.

Those decision show how quickly changing viewing habits are forcing media companies to reassess old ways of doing business to keep audiences engaged, and compete with on-demand programming from the likes of Netflix Inc (NFLX.O).

Also helping matters is that August — when the Summer Olympics airs this year — marks the all-important back-to-school season when retailers spend big advertising dollars on TV commercials to market their clothes and school supplies.

“It used to be that we would just do enough programming to keep the lights on during the Olympics,” said Michael Greco, executive vice president of programming and research at Discovery. “That discussion has completely changed.”

 

OLYMPIC EYEBALLS

This year’s Olympic Games in Rio de Janeiro is expected to draw more viewers than the record 217 million people who watched the 2012 London games because they will take place with just a one hour time difference from the heavily-populated U.S. east coast.

While CBS and Discovery recognize that many people will watch the games, they are also betting they will tune into shows using video on-demand (VOD) or apps from networks or cable companies that stream programming.

“People have so many more options to catch up on these shows,” said Kelly Kahl, senior executive vice president at CBS Primetime. “Today, it doesn’t feel like you have a losing battle against the Olympics.”

The summer programming strategy comes with risks because not all viewers are using, or have access to, video on-demand. Fifty one percent of U.S. cable subscribers used VOD in the past month in 2015, up from 34 percent in 2010, according to Leichtman Research Group.