The Olympics TV ratings show that great stories always win

Watching the Olympics has been such a treat.

It's a sporting event sure, but it's so much more. As programming it's drama, theatre, reality, scandal, comedy, thriller, tragedy and triumph. Sport is the platform on which these stories are told.

And for the host broadcaster, Nine, the best way to look at the rights investment is that they have purchased a multi genre package that has multi channel application.

Another thing the Olympics demonstrates is if there's high quality programming on free TV, people will watch.

Look at the last 6 days of Olympic programming and what it has done to free TV viewing in Australia.

Around 60% of all Australians have been watching TV at some point every single day. Over 40% of 16-39 have been watching TV every single day. These are impressive numbers, even moreso when you consider the majority of Paris medal contests are taking place in the time we normally sleep in Australia.

The Olympics is bringing a high volume of people to their TV screens. The main Olympics session for Nine each night is delivering 5.1x the volume of 16-39's that the highest ranking programs for 16-39 provides in the week before the Olympics. And it's bringing 3.8x more 25-54 than the highest ranking 25-54 programming in the week prior to the Olympics.

Below shows the spikes for 9Now and Stan searches. These spikes are occurring generally between 7-9pm or 3-5am. They have held strong in week 1, and in week 2 the athletics emerges and the finals of basketball/hockey/tennis/football all occur.

9Now and Stan are also beating Netflix when it comes to search volume during the last 7 days.

This may not seem like such a surprise given the Olympics, but look at the gap between 9Now, 7Plus and Netflix for the half year to June 30 2024. Netflix absolutely destroys them and generates often 20-30x the search volume of these free platforms. What's more, Netflix spikes consistently every single week. 9Now gets a small bump for the tennis + MAFS period, and two from origin. Seven has one late February. Other than that they are consistently minnows compared to the big red N.

The Olympics performance demonstrates that content is the strongest driver of consumer habit, and when TV delivers the best content it wins.

And when it doesn't, it doesn't win.

People still absolutely watch TV, but they're highly discerning on what they choose to watch. Platforms and technology and recommendations play an enabling role, but ultimately they are servant to content rather than the driver of preference.

Given this, there's a bull case for commercially supported TV if some lessons from the Olympics and the last 6 months are applied.

The physical TV screen is more important than it ever was and remains the dominant screen in the household

Free TV doesn't have a distribution problem. TV's are selling well, and have become more capable devices and more of a hub for the home. "No one watches TV" say the less informed, except more people watch more content on a TV than ever. The challenge is that its been less of what we like to call 'TV', and more of what feels like 'TV' but we call streaming. People are engaged by great content served on a large screen, but a lot of this content has not become the domain of free TV.

SVOD is becoming more like TV than less. TV like weekly scheduling, TV like ads

The initial rub on streaming was it provided a better experience than 'normal TV'. No ads, low price point. This has flipped. Streaming needs ads to be viable. The initial monthly price point of sub $10 is closer to $20 or more. Entire series being released at the one time now has given away to releasing episodes weekly, or releasing a series in 2-4 tranches.

But what about 'nobody likes ads'? Well, it turns out people will tolerate them if they're the gate the must progress through to get to what they want. What's more, the streamers are offering a TV ad experience that so far is nowhere near as good as the incumbent networks. The category has moved closer to the incumbency and it won't go back.

It could be credibly argued the greatest driver of user behaviour hasn't been a express move away from the TV screen, it's been an express move of the best content away from the TV networks

When TV networks broadcast strong content the viewers follow. Tier 1 sports are an example. Cultural events are another. The Olympics is the best example. The challenge they face is outside of these networks are reluctant to bid big to secure the best content. Declining ad spend results in a reduction in production budget appetite, which delivers less tier 1 content and ultimately less ad demand. The majority of programming that drivers culture and conversation is sitting on streaming services, and it doesn't drive culture and conversation because it's on streaming services ... it's because it's the content people want to watch.

Bold content acquisition bids (AFL rights deal, Nine Olympic deal) are important outside of sports, especially in drama/comedy/documentaries etc where SVOD wins on engagement

Nine went bold on the Olympics, but in many ways someone had to and they decided it might as well be them on the offence rather than the defence. Domestic networks consistently bid boldly on sport, but not so much elsewhere. The Olympics, as I outlined below, is more drama and reality than sport driven. What else can explain 5 million people tuning into a sport that would struggle to get 1,000 on a multi channel outside of the Olympics?

Drama, reality, documentaries, kids and film are the big drivers of streaming. They are also the genres the commercial networks have largely reduced their commitment to. The Matildas in 2023 for Seven was exceptional drama as well as athletic excellence, and rated accordingly. The Matildas were the dominant local story of 2023. The stories within sport are often more captivating and emotional than the sport itself. But stories are not told much on free TV.

And the great irony of the networks move away from kids TV is that a kids TV producer (Ludo, producer of Bluey) is most likely worth more as a business now than all the free TV networks in Australia combined.

People don't watch TV is not true. Most people don't want to watch average TV and will preference higher quality if it is available.

Content is the driver. SVOD is driven by comedy, drama, pop culture and documentaries. Kids performs well. TV locally has abandoned many of these. When it has a strong asset that shines in these areas the viewers en masses follow. But when it doesn't many of the viewers will move to those who do.

Can the approach demonstrated by Nine with the Olympics be replicated with other forms of programming.

The TV + free streamer + paid streamer + advertising approach demonstrated by Nine/Stan on Olympics has worked well. FTA provides ubiquitous access and volume. Streaming provides additional viewers plus a diverse ad product. Stan brings new users to the Stan product and the sports tier. (and Stan could have easily added a moderate ad load to the sports tier on live broadcast as well as recaps). It feels a lot like the Comcast deal on the NBA rights (NBC linear + NBC digital + selected exclusives on Peacock) which had multiple monetisation options.

Securing drama/film/reality/comedy with a similar model makes sense, at least from the outside-in. First EP window on Stan (with an intro of an ad tier), second EP window on TV, non current season catalog on free streamer. Ad revenue recoup plus subscription. It's not needed for everything but could secure the high buzz content that is allowing the streamers new news every week. Paramount/Ten has the same opportunity. Seven not so much. Foxtel already does it, and it's probably a reason fixed cable is holding on better than most expected.

It may sound simple, but The Olympics shows what brings high volume audiences to TV. Great stories.

Hopefully we begin to see more of them on TV and it stops letting the best stories be told by others.