TripleCast's impact remains to be seen

August 07, 1992|By Knight-Ridder News Service

The Summer Olympics end Sunday, but their impact on NBC and the future of pay-per-view television may not be clear for months.

Right now, it's difficult to even sort out the key questions from the secondary issues. What's intriguing, though, are suggestions that NBC's condition is worse than it has been portrayed and that the pay-per-view fallout isn't nearly as gloomy as it has been described.

For example, different reports have raised the possibility that NBC's loss on the Olympics could be anywhere from $30 million to $150 million. But maybe the focus on how much is being lost has obscured a bigger question: How will the network make up for whatever it loses?

Among the cynical, it was considered good publicity for NBC to concede it would lose money on the Games if that so-called admission lent credibility to the network's low-end estimates of $30 million to $40 million. But even if that is the range, it's more than enough money to make people wonder if NBC will cut costs sharply in other areas as a response.

Una Kearns, who analyzes the activity of NBC owner General Electric for Moody's Investors Service in New York, said the company already is pursuing an aggressive cost-reduction strategy and might be able to turn a profit for the year -- even with a $30 million Olympics loss. But trying to figure out now what the loss will turn out to be, she said, "is a huge guessing game."

The immediate source of the financial strain is the TripleCast, the three-channel, pay-per-view venture that is offering large segments of live coverage as a supplement to NBC's regular, tape-delayed programming. More fundamentally, the problem is the rights fees the Olympics have been able to command. NBC paid $401 million for the Barcelona Games.

Various officials at NBC and Cablevision, the large cable systems operator that's obligated to as much as $50 million in losses as the network's pay-per-view partner, put the TripleCast goal at the equivalent of 2 million to 3 million full-package subscribers. But Cablevision executive Jim Dolan acknowledged this week that the tally will end up "under a half-million -- very well under a half-million."

The highest number reported so far has been 250,000, which wouldn't be enough to pay for the TripleCast's $40 million promotional budget even before the revenue was shared with other cable system operators. The rest of the cost attributed to the TripleCast depends on how NBC does its book keeping, but estimates that combine rights fees and production expenses have been as high as $200 million.

Mr. Dolan said good reviews for the TripleCast's coverage and the addition of discount prices for single-day and weekend rTC orders did not result in any buying surge. "Essentially," he said, "all the shouting is winding down."

The TripleCast, of course, has been the target for months of derision despite its backers' optimism.

Not only has it been ridiculed for being as impractical as it is overpriced, it has became a symbol of people's fears about traditionally non-cable sports programming moving to pay-per-view.

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