'Must-see' TV events are getting hit with big ratings drops

Another day, another reminder that iconic live TV events are in major trouble.

Sunday's TV broadcast of MTV's VMAs (Video Music Awards) drew in a paltry 6.5 million viewers, down 34% from last year's 9.8 million, according to The New York Times.

34%!

And that included the fact that Viacom broadcast it on a whopping 11 channels, and the awards show included appearances by superstars from Kanye West to Rihanna to Beyoncé.

The VMAs drop comes on the heels of NBC's disastrous TV showing at the Olympics, which saw a sharp viewership dip for the first time since 2000. NBC's Olympics primetime broadcast was down 15% versus 2012. The damage was even greater among younger people. Among 18- to 49-year-olds, there was a 25% drop-off for the bulk of the games, according to Bloomberg Intelligence.

The way out

But though both these events show the young people simply aren't tuning into "must-see" TV events in the way they used to, they also show a potential path forward.

MTV told the Times the VMAs got 62.8 million streams on Sunday, up 70%.

This mirrors the Olympics. NBC told The Verge 50 million people watched the Rio games online, up 109% from the previous games. NBC also said the total number of minutes "more than doubled the number from all prior games combined," according to The Verge.

And beyond VMA streams on MTV's own properties, the company also touted the increase in the VMAs distributed presence. MTV told the Times that the VMAs had snagged 45.8 million streams on Facebook, a monster bump from the 4.4 million it got last year, though it's important to remember that Facebook counts a "stream" when the video is played for just three seconds.

On the Twitter front, Vulture notes that the hashtag #VMA was a top global trending topic for 13 hours.

The money

But the big question is whether companies like NBC and MTV will be able to monetize online video in a meaningful way, especially if it begins to displace traditional TV broadcasts.

NBC was actually able to charge 50% higher ad rates for internet ads than for those on TV because of the younger audience, NBC Sports chairman Mark Lazarus told Bloomberg. But 98% of people still watch the Olympics on TV, the medium that saw its audience tank.

On the other side, MTV drew huge audiences for the VMAs in places like Facebook, but how long they tuned in for, and consequently, the volume of ads that MTV could serve, is uncertain. Being a global trending topic isn't much use to MTV if it can't wring the same kind of revenue out of the event as it used to.