Can NBC Ban Internet Broadcast Rights to the Sydney Olympics?

Business/Technology Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Sept. 5, 2000

As the world prepares to descend on Sydney for the upcoming Olympic Games, the city has found itself in the middle of the war being fought over television and intellectual property rights. The proliferation of technology and the Internet has made it possible to "broadcast" events live on the Web, creating new competition for traditional television outlets.

Traditional broadcasters pay millions of dollars to lock up sole possession of television rights and are now arguing that they control all distribution of footage. American broadcaster NBC has banned the transmission of Olympic events over the Internet until it has shown its coverage to America in prime time. When NBC outbid its competitors for the rights to air the games years ago, the possibility for broadcast by Internet outlets did not exist. This new form of competition begs the question as to whether or not television rights holders also own the rights to Internet coverage.

With such a large sum of money on the table and no legal precedent to reference, the International Olympic Committee (IOC) is virtually powerless to disagree with NBC. By default, this gives control of Internet rights to the network, but it does not guarantee ownership of those rights.

James Grady, associate analyst at Giga Information Group, believes that this year will mark the final traditionally broadcast Olympics. Moving farther ahead into the Internet Age will bring live coverage of different events on different Web sites, making for a whole new environment in two years for the Winter Olympics. Grady also expects the following to evolve over time:

--Broadcast and Internet rights will become separated

--Media organizations will be compelled to rethink global strategies in light of the Internet's ability to instantly feed video to users worldwide

--Third-party Web sites will push the envelope on what photos and information they can share

To speak with Grady for additional commentary regarding broadcast/Internet rights and the business implications of this issue, please contact Ian Race at [phone] or [e-mail].