Originally Posted by berriman
There is certainly a rational argument to be made that NBC would IMPROVE its chances to make money on the NHL if they were to showcase the sport's attractiveness in HD, and trumpet their "leadership" role in showing high quality HD sports programming like the NHL.
There are two things that NBC can do to improve its bottom line on the NHL, lower costs or raise ad rates/gain more viewers.
1. Lowering costs: They already are doing this, through only doing one game a week in HDTV and a profit sharing rights agreement with the NHL.
2.Raise ad rates/gain more viewers: NBC is most likely charging the most they can for ads during NHL games. So a simple raising of the ad rates of the long term would not work. Gain viewers is the other way to raise the ad rates for your programming, however, with a sport that is not all that popular outside of a few select cities that would be a tough task. Any extra viewers that NBC might be able to pull in, would not be worth the cost of doing all three games in HDTV. Maybe when HDTV penetration is at a higher level this would be a thought, but right now the vast majority of people are only watching in SD.
As far as the NHL needing a stimulus to draw in more viewers, HD is not going to be it for now because the people the advertisers care about are still watching in SD.
An example, would be CBS NFL football. They were first on the scene with HD games, yet outside of the goodwill it gained CBS, it earned them nothing the ratings department, where it counts. As the majority of people watching games care more about announcers, graphics, and most importantly the teams playing. It is in those areas that the television networks have invested their money. The demand for HD by the advertisers for HD sports may be there for the NFL, but it has not reached that point for the NHL.
NBC has been nothing short of bold and innovate in their sports department. Arena League and NHL agreements that allow the network to share revenue with the league, allowing for a greater chance of making a profit. Their new NFL Sunday night package for next season, involved the security, lighting, and medical divisions of General Electric. NBC will most likely lose money on the contract, but it will be a loss leader for GE's other divisions. The Olympics, which is high value programming, that typically at least breaks even or makes a small profit. A few years ago, NBC experimented with the XFL, it was a bold move that lost money, but the business risk of the move was very small. NBC even though they say that they overpayed for NASCAR, were probably very happy with it and them getting out of it is more of a function of them getting SNF and ESPN wanting a piece of the NASCAR pie back. These were all bold moves in the business sense that have positioned NBC Sports to be a very important part of the NBC/GE business