PORTLAND, Ore. (TheStreet) -- What channel is the Olympics on? Just about any channel with a peacock in its logo.
The U.S. television viewer is in his or her third Olympics of the "TV Everywhere" era and should be getting used to the fact that this is how the nation and the world wills watch major sporting events from now on. Though Feb. 23, the 2014 Winter Olympics from Sochi, Russia, will be broadcast on local NBC affiliates, NBC Sports Network, MSNBC, CNBC and USA. Meanwhile, for the first time in Winter Olympics history, NBC will stream all events through mobile devices using its NBC Sports Live Extra app.
It makes Fox and the NFL's handling of Super Bowl XLVIII a week ago seem quaint by comparison: One event, one network, token streaming through Fox for desktop devices and Verizon for limited mobile devices. What is this, 2008?
That year, NBC was just getting around to showing all Olympic events in high-definition on its various channels. As recently as the 2006 Winter Games in Turin, Italy, only half the games were shown in HD. Also, NBC was just getting the hang of streaming Olympic events in 2008. In Turin, it streamed a scant two hours of coverage. By 2008, it was up to 2,200 hours -- more than confused potential advertisers knew what to do with. The Olympic Committee had its own YouTube Channel and streaming was generally a mess.
A whole lot changed between then and 2011, when NBC signed its latest Olympic broadcast deal for $4.3 billion. That agreement runs through 2020 and includes $775 million for the rights to the Sochi Games alone. While the network lost $223 million broadcasting the last Winter Games in Vancouver in 2010, it made $88 million on the 2012 Summer Games in London thanks to digital and mobile ad sales and a programming strategy that ran pre-recorded events in prime time despite the fact that fans could stream those events live and had the results hours earlier.
NBC has just kept building its digital options as well, taking a cue from DirectTV's Red Zone channel of NFL scoring drives and hiring Red Zone host Andrew Siciliano to oversee its "Gold Zone" coverage of gold medal events. It's also hired gold-medal-winning figure skater Sarah Hughes to host an online figure skating highlights and analysis show called Olympic Ice.
This isn't over-the-top coverage by any stretch: It's the new status quo. Back in 2010, the NCAA reached a 14-year, $10.8 billion television agreement with CBS and Time Warner's Turner Broadcasting to show every game live on CBS, TBS, TNT and TruTV. Not only were all games broadcast but, as of 2012, the broadcasters' March Madness Live app streamed every game of the tournament over mobile devices. Advertising for the tournament alone brought in $6 billion for its network partners within the last decade.
Missing the chance to broadcast any portion of these large-scale events is not only unnecessary, but unwise. The truckloads of potential cash that these sporting events represent is raising their rights fees to unseen heights and forcing competing media companies to bulk up their operations. Back in 2005, Walt Disney and Univision paid a combined $425 million to broadcast the FIFA World Cup, soccer's biggest event, in 2010 and 2014. That's $100 million for the ABC/ESPN English-language rights and $325 for Univision's Spanish-language rights. ESPN pushed coverage onto its ESPN2 secondary channel, its ESPN3 broadband site and its Watch ESPN mobile streaming service.
When it came time to bid for the 2018 and 2022 World Cup in 2011, Fox won out with a $400 million offer that nearly beat the 2005 total for the entire U.S. market combined. Comcast-owned Telemundo, meanwhile, forked over $600 million for the Spanish-language rights that still amounts to less than half of what networks pay per event for the Olympics and NCAA Men's Basketball Tournament, but nearly double the former price.
In Fox's case, it required an almost complete makeover of its sports offerings. Apart from its main network and affiliates, Fox took a sledgehammer to its sports operations last year and came out looking a whole lot like ESPN's ecosystem. Fox Sports Network was replaced with Fox Sports 1. FuelTV turned into Fox Sports 2. Fox Soccer disappeared completely, with its programming shifted over to Fox Sports 1 and 2, but the Fox Soccer Plus channel remained. Meanwhile, Fox is wresting away Major League Soccer and U.S. Men's National Team coverage from NBC Sports in 2015 with a $70 million-a-year deal it made with ESPN.
Fox Sports already streams events including NASCAR's Daytona 500 using its Fox Sports Go app and now has a lovely little array of sports-specific channels to match it -- which may prevent Fox from having to shift World Cup events onto FX, FXX, Fox News or other channels where the games would be a less-than-comfortable fit.
This multichannel, multiplatform approach does wonders for ad sales and is a dream for fans with access to it, but that access is quickly becoming the sticking point. While rights are bought by media companies with "free" flagship networks, they're ostensibly conglomerates that owe a healthy chunk of their existence to cable and satellite subscription fees. This means that if you want all of the streaming features and all of the mobile viewing options, you still have to verify/authenticate your allegiance to a cable or satellite provider.
You may be able to sneak on with an Internet service provider, but don't be surprised if some of the best events and content are cut off because you aren't subscribing to certain channels. Watching ESPN -- for example -- will give you all of the ESPN 3 content you'd like, but has no plans to offer you a discount on streamed live coverage of events it's airing on channels that rank among the most costly in the cable and satellite spectrum.
Injustice? Not really. "TV Everywhere" is TV everywhere potential ad dollars and subscription revenue are. It's not the unused rind of a citrus already sucked dry: It's artisanal orange and lemon zest being blended into a cocktail of increased viewership and revenue. There's a reason the Opening Ceremonies won't be streamed despite limitless opportunity to do so: They've still the big draw for both U.S. viewers and potential advertisers.
The Olympics aren't "everywhere" this year, but they're everywhere that NBC Sports, NBCUniversal and Comcast need them to be. Other games will play by those same rules soon enough.
-- Written by Jason Notte in Portland, Ore.
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