YouTubes deal to stream matches from the Indian Premier League (IPL) takes Google a step closer to the heart of the broadcasting industry. While audiences are not spectacular, the promise of incremental advertising revenues and global reach is hard to ignore for rights owners. But this short-term gain comes with real long-term cost. Broadcasters should fear the content delivery network Google has built and its rumored set-top box partnership with Sony and Intel. If Google can implant itself on the television screen, it will own the audience and the TV advertising market.
Googles venture into cricket gives it access to the crown jewels of broadcasting
With the IPL in full swing, Google is playing its own match. In a world first, YouTube is streaming the telecast of matches from the Indian cricket tournament worldwide in every country except the US. The streams are live, but with a push-back time of five minutes. For the IPL, YouTubes global distribution and audience reach is a strong way to boost advertising revenues. For Google it is a first step into web broadcasting of major international sports tournaments, the Crown Jewels of broadcast.
Google has released audience statistics but is cagey regarding specifics. In the first week it peaked at 8 million viewers, but the live stream is available in markets around the world and Google isnt breaking out where those viewers are coming from. To put this number in context, peak broadcast audiences in India for the IPL games were 19.6 million, and in the UK, where the IPL is showing on a free-to-air channel for the first time, ITV4 audiences peaked at 479,000. YouTubes Internet audience, wherever they maybe, is 16 times the audience volume of the UK, one of the IPLs most important international markets. Having said that, Lady Gagas new video on YouTube cleared 20 million views in six days.
Critically, YouTube is also attracting headline advertisers such as HSBC, Samsung, and Coca Cola. Its success at drawing high-profile advertisers with targeted video advertising will be crucial after the final wicket has fallen. The deal between YouTube and the IPL is a revenue-share deal on total ad revenues. Sony Pictures Entertainment paid $1.26 billion upfront for the broadcast rights just for India. When the audience data for the tournament comes in we will know how good a deal Google got.
Beware geeks baring gifts
Google is a major threat to the current structure of the broadcast industry. It is serious in its intent to reinvent and dominate the global television advertising market. It now also has its own formidable content distribution network, having over the past year deployed a network of approximately 36 datacenters, co-locating in over 60 public exchanges, and deployed racks of its Google Global Cache servers inside consumer ISPs worldwide.
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