ECONOMIC
IMPACT OF THE 2010 WINTER GAMES
VIII. It's All About the Media
While the broadcast revenue and other commercialization fees
provide a means to finance the Games, the real economic prize is the
unique opportunity the Games afford to increase long-term growth in
international tourist visits to the province. There is no doubt that
the favourable and extensive media exposure surrounding Expo 86
pushed international awareness of British Columbia to a new plateau
and induced millions to visit the province both during and in the
years following the event. The Olympic Games offer a similar but
more intense opportunity to introduce a mass international audience
to the destination appeal of British Columbia and to re-ignite the
interest of previous visitors in visiting again. The ultimate
economic impact of the Games will depend largely on how successfully
British Columbia and its tourism industry converts that
international exposure into new visitors before, during and after
the Games.
While Expo 86 benefited from periodic international media
exposure throughout its development phase and the exposition itself,
the 2010 Olympic Games will concentrate unprecedented, vast and
intense international media attention on the winning host city
beginning with the run up to selection by the IOC in 2003 and
building through the construction years to a climax during the
Games.
While the Games are being held, the host country experiences
intense international print, Internet and television exposure. The
Nagano Winter Games in 1998 generated more than 6,000 hours of
television coverage around the globe. To put this level of exposure
into some sort of context, the entire annual tourism promotion
budget of the Canadian Tourism Commission for the entire USA in 1998
was about $17 million. That expenditure would purchase about 30
minutes of prime time television advertising exposure on the NBC
network in the USA.
International media interest in British Columbia will build with
the award of the Games in 2003 and a substantial portion of it will
be dedicated to telling its readers and viewers who we are. This
substantial and largely free international promotion can be
leveraged extensively through cooperative efforts by the national,
provincial, municipal and industry marketing agencies in the
interests of long-term tourism development. This pre-Games media
coverage will have as equally great, if not a greater impact on
long-term tourism growth than coverage during the Games event. Most
of the media coverage during the Games will focus on the events
themselves and hence serves principally to raise international
recognition of the names Whistler, Vancouver or British Columbia by
their association with the individual competitions. The challenge
for the tourism industry and the Province will be to devise a media
program that translates that heightened recognition into tourist
visits after the Games.
Nor can the role of the Internet be ignored. The official Nagano
Games web site set a world and Olympic record, receiving 646 million
hits during the 15 days of the Games, peaking at 103,429 hits per
minute. While the technology will undoubtedly change
dramatically over the decade, the Internet can be expected to play
an increasingly pervasive role in tourism promotion and travel
decisions.
The 1998 Nagano Winter Games captured 9.2 billion viewers in 26
major market regions of the world. (A person who tunes into the
broadcast three times counts as three viewers). According to major sponsors
interviewed by Maclean's Magazine, the Olympic audience is uniquely
appealing to corporate advertisers, and hence the broadcast
networks, because the audience historically is fairly equally split
between male and female viewers and attracts many who are not
regular TV viewers7. In terms
of its sheer scale, the Olympic audience is vastly greater than any
other spectator event. These market statistics enticed national
broadcasters around the world, such as CBC and NBC, to pay fees
aggregating about CDA$1.1 billion to the IOC for the 2002 Winter
Olympic Games in Salt Lake City. (The IOC will pass one half of this
amount to the Salt Lake Organising Committee.) Those broadcasters
will aim to recoup much more than their $1.1 billion outlay through
sales of commercial "spots."
It is the broadcast licence fees and the commercial sponsorship
contracts, more than any other revenue sources that makes it
possible, though not automatic, to structure largely self-financing
Games. While audience interest in the Games appears to be strong and
growing, the growth in value of broadcast contracts will ultimately
be limited by the physical amount of advertising time per hour of
broadcast authorized by the television regulatory agencies in each
country. For the purposes of this impact model, we have assumed the
VW2010 share of broadcast fees stays level with the Salt Lake
receipt in real terms.
In the words of Jones Lange LaSalle, the key to success (or
otherwise) of hosting major events such as the Olympics is largely
dependent upon the ability of the city to leverage off the images
and perceptions created during the event itself and to continue to
deliver on the dream long after the circus has left town. How well
can the city take advantage of the transient and fickle world focus?
How indelible are the images? How can they best be sustained? All of
these are questions a host city must answer in a strategic approach
to leveraging the event.
This model assumes a timely and effective response to this
challenge by the Province (Tourism BC), VW2010, the Canadian Tourism
Commission and the tourism industry in order to extract the maximum
tourism exposure and impact for British Columbia.
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