Quokka in the blocks

Talk about trust. For most networks, an investment of $3.6 billion for the rights to an event like the Olympics would result in tight control over every aspect of the operation. For NBC Sports however, the control of the Internet side of its Olympics coverage, at www.NBCOlympics.com, has been turned over to Quokka Sports.

"Everything you see on the site we do," says Tom Newell, general manager, NBC/Quokka Ventures.

For NBC Vice President, Business Development, Kevin Monaghan, the trust is strong: "Quokka produces the best sports coverage on the Web, and that's quickly apparent when you look at the site, which we believe to be the most comprehensive, deepest Olympics site ever."

And how. The site has been up and running since January and now has more than 20,000 pages of content, according to Newell. It will offer bios of more than 1,000 athletes, including every American contender. And along with the deeper information will be results posted as quickly as they're available and other material designed to close the gap of the Pacific Ocean and massive time zone differences for an expected 10 million visitors.

"When they made a presentation to Dick Ebersol four months ago, he was blown away, and he's a tough guy to please when it comes to his passion, Olympic projects," says Monaghan.

Although this might be Quokka's first Olympics as a team, a few of the members have had experience working on Olympic games. Newell, for one, worked for CBS Sports at the 1992 Albertville Winter Olympics. Like the Olympic team members themselves, Newell understands that his past experiences will help make the challenges in Sydney a little simpler for the team. More than 100 Quokka employees will be on the ground in Sydney covering the action while about 220 employees in San Francisco will take in the information and prepare it for delivery to IBM servers that handle distribution of the main body of the Web site. In comparison, NBC had six people working on its Web site in 1996.

"The principal thing to remember is, it's a marathon, not a sprint," Newell says. "You could work 24 hours straight and still not get done what you wanted to accomplish. So the main thing is, it's going to be long hours and hard work."

Quokka Sports has already made a name for itself in online sports coverage, but the Olympic coverage could pole-vault the company to a new level of awareness and revenues. "The Street and Smith Sports Business Journal [recently] indicated that the NBCOlympics.com site would generate more than $15 million in revenue, which is amazing for an event-oriented, domestic Internet site," says Monaghan. "Consider that the NFL's SuperBowl.com projects generally drive about $1 million in revenue and services."

Newell can say only that the advertising for the Internet site will be in excess of $10 million, with both Quokka and NBC's Olympics advertising sales forces selling packages that combine both Internet and television. There are currently 10 major advertisers for the site, he says, adding that he hopes to immerse the advertising in the sites as deeply as viewers get immersed.

"We don't have typical banners on the site," he says. "I don't think people look at banners, and the click-through rate is marginal. Part of our process is what we call sponsor immersion, and, during the games, we're going to have sponsor messages integrated throughout the Web site in a way that it is more attractive."

Beyond advertising will be the opportunity for some e-commerce. Quokka signed a revenue-sharing deal with the U.S. Olympic Committee that will allow visitors to buy merchandise related to the team. It's an exclusive relationship and one Newell believes will be successful.

Keeping the site attractive and functional is the major goal of the Quokka team. Because of the time difference between Australia and the U.S. (7 p.m. Sydney time is 4 a.m. ET), morning newspapers won't offer results of events, so Newell expects that visitors will hit the site in the morning. "We won't be holding anything back as far as who has won what or the dramatic stories," he says.

With other sports-related Web sites such as CBS Sportsline.com and FoxSports.com on the Olympics beat, one has to wonder whether NBCOlympics.com won't just fall into a virtual stew of sites, with one site's coverage similar the others. But Newell is confident that won't happen.

The NBCOlympics site will be unique, he explains, in that there will be no restriction on pulling still images from NBC's broadcast coverage. This will allow what he calls the "picture show": a series of images that convey a story. "We want to give people an actual sense of what's going on so they'll tune into the actual broadcast to see the competition."

It's that relationship, between the broadcast product and the Web site, that will be most interesting to follow in the coming weeks. Newell believes that knowing the results won't destroy the TV experience. He cites TV ratings in 1994 with the Nancy Kerrigan/Tonya Harding skating saga that hit record levels despite most viewers' knowing the results.

He also points out that, although NBC will have 440 hours of TV coverage, there will actually be 3,500 hours of competition, giving the site an opportunity to round out the coverage and extend it to include events that usually would get little, if any, coverage.

"We'll also be spending a lot of time telling people what's coming up on the broadcast," he says, "because we think people are interested in knowing what's on TV and part of our goal is to be sure we're driving people to NBC's programming."

One challenge will be telling the stories of the games without the use of streaming video (although the site will offer a broadband-delivered highlights package). This is primarily a result of the International Olympic Committee's desire to give its broadcast-rights holders exclusive distribution of video. For many of today's Internet companies, particularly those linked to video content, the means to offer video clips and highlights is often seen as a Holy Grail. But not to Newell.

"If you're hooked up to a 28.8 modem, [it's] a poor user experience at best," he says. "Taking 20 minutes to download a 90-second clip that breaks up is not a good experience. And even if the rules changed and we were allowed to stream the Olympics, the total bandwidth on the Internet would allow for less than 100,000 people to be connected."

More important, Newell and Quokka believe the true promise of the Internet has little to do with streaming video. "Our whole production is predicated on that point, that streaming video isn't the be-all and end-all for the Internet medium," Newell notes. "In fact, we very strongly believe that this medium is so fundamentally different from television that you shouldn't just try to put video on the Internet. It's as different from television as television is from radio."

The mistake many television-related Internet sites are making is to try to port one medium to another. Newell likens it to the early days of television when radio actors were put in front of the camera, making television the equivalent of radio with pictures. "Just streaming video is too simplistic," he says. "This medium has too much to offer, and we're trying to take the next step to give people a fundamentally different experience from what they see on TV."

Quokka is, however, going to offer a broadband-delivered 20-minute daily video highlight package to Axient Communications broadband customers signed up on the OctaneSM ISP. The clips will be accessible a day after events are broadcast by NBC.

"This is the first time anyone will try streaming on a major basis, so we wanted to put a realistic number on the amount of coverage for each day," Newell continues. "One of the advantages of the Axient product is, it's full-screen, full-motion, 30-fps video, which we think is pretty cool and will provide added value to broadband users in the U.S."

The delivery of streaming video via broadband may seem to fly in the face of the IOC's regulations, but the IOC said delivery of video is okay as long as it's limited to the geographic reach of NBC. Thus, broadband delivery that doesn't put the content on the Internet for general access to anyone in the world meets the requirements.

How the convergence of TV and Internet will shake out is anyone's guess, but Newell thinks it will be "video plus something. What will attract people to this medium is that it has something to offer beyond the video, and that's what Quokka Sports and NBCOlympics is about: What is the new entertainment value of this new medium?"

The next few months promise to be important ones for Quokka. After the Olympics end, it's only 16 months until the Salt Lake City Winter Games, and NBC/Quokka Ventures was recently chosen by the Salt Lake Olympic Committee to produce www.saltlake2002.com, the official worldwide site of the 2002 Olympics. The company also will complete a deal to buy a controlling interest in Total Sports.com for approximately $130 million.

All of these moves are making the company more attractive to investors and to NBC, which, if it exercises a number of warrants, could itself own 15% of Quokka.

"NBC has an investment in Golf.com, and, when Total Sports.com indicated they might be interested in adding a new partner, NBC made certain that Quokka Sports was that new partner," says Monaghan.