by PuckStopsHere on 04/20/09 at 02:55 AM ET
Last season as the Pittsburgh Penguins went to the Stanley Cup finals, there was a big screen set up outside Mellon Arena where thousands of fans watched the games. It was a successful promotion which likely paid off as the fans present at these viewing parties were more likely to buy Penguins memorabilia and to attend Penguins games in the future. However in yesterday’s game three of their series with the Philadelphia Flyers there was no viewing party. NBC vetoed it.
NBC had the television rights to the game. They obtained them by paying the NHL nothing in advance and sharing revenues after the fact. This agreement gives NBC the right to dictate some NHL policy. This is policy which is against the NHL’s best interests.
NBC wants to maximize the ratings of their hockey game. This will maximize advertising revenue. The problem is that ratings are measured on a per household per television set basis. One big screen with thousands watching the NBC feed is thousands of people watching NBC, but it counts as one TV. For ratings purposes there is no difference between one person watching a hockey game alone and a dozen people watching on the same television. Obviously, the dozen watching will have more people viewing the advertisements and be more likely to have people spending money on the advertised products. NBC is trying to maximize a metric that doesn’t matter. The number of people watching the game likely increases due to the viewing party at Mellon Arena, yet the number of individual television sets declines. Shouldn’t the goal be to maximize the number of people viewing?
When a game is not on NBC (i.e. it is on Versus) viewing parties will still exist. Versus is not vetoing them and unlike NBC actually paid for the rights to broadcast the games.
NBC paid the NHL nothing in order to hold veto power over an event that will grows the NHL viewership (although decreases the number of individual television sets) and will grow viewership in the future. This is the kind of shortsighted marketing decision that will hurt the NHL and its fans. If Mellon Arena shows the NBC feed, the viewing party will increase viewership of the game by thousands. The problem is that NBC cannot measure those thousands and thus extract revenue from them. They exist but cannot be properly measured. Therefore NBC killed it.
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