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YouTube: ESPN for the New Millenium?

March 15, 2010 | Neal | No comment

There probably aren’t that many of you who remember the early days of ESPN before it became the “Worldwide Leader in Sports.” There was a day where it showed mostly highlights via SportsCenter and random sports (Summer League Basketball anyone? Australian Rules Football?) that no network could justify showing because the audience wasn’t big enough. This article left me wondering if YouTube is following that same path ESPN did all those years ago.

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Follow me for a minute on this one. YouTube purchased Indian Premier League (Cricket) broadcast rights that has two forms:

  • In locations where TV rights have not been purchased, they will be streaming live;
  • In locations where TV rights have been purchased, they will be streaming on a 5 minute delay with more features and functionality than their broadcast alternatives;

Either way, they’ve created a lot of advertising inventory with this acquisition. It doesn’t take too much imagination to move from “they acquired rights that weren’t in high demand” to a much more aggressive entry into the sports rights marketplace.

Five Things To Take Away

  1. Disruption – In the same way that ESPN snuck up on networks from a channel (cable) widely viewed as second class YouTube could do the same thing to networks whose heritage is on the large screen (TV) vs the smaller one (online) – it is rarely the obvious direct competitor like Fox who disrupts an established market;
  2. Broadcast Quality – there are two aspects of this offering that will require intense scrutiny…Feed Quality – will YouTube be able to provide the necessary quality during live events as opposed to the relatively smooth demand associated with less time-sensitive content? Production – while the interactive features and the like will certainly be superior, will YouTube take on their own production of the event? ESPN is a leader because it consistently produces great experiences for fans watching the game – YouTube’s strategy for production of the event (co-opting vs. building their own) will go a long way to determining if they will be a player in this space or just a distribution channel that will compete with many other options)
  3. The Value of LIVE – A 5 minute delay may not seem like much but take it from an avid sports fan, I want the action live! If I have no choice at all, then a 5 minute delay will do but no amount of interactive functionality will get me to watch on delay. There is no doubt that I’d know everything that happened ahead of time anyway between text messages, Twitter, and Facebook so the 5 minute delay might as well be 5 hours.
  4. Betting on the Come – there is definitely a future in online as a meaningful channel for a la carte consumption of sports content. We are rapidly approaching a time where I can ditch my expensive cable subscription in favor of a combination of Hulu and network sites for free network content and paid sports sites like MLB.com where I can buy what I want and not subsidize network purchases of things that I don’t watch like NASCAR and the PGA.
  5. What’s Next in Receiving Digital Content? – Video, whether delivered online or via some sort of cable to a TV, is quickly arriving at a sticky place not unlike the one print media has been in for years. The traditional channel (in this case TV) which has traditionally charged high rates for not-very-targeted ad inventory supplemented by some per-subscriber revenue is potentially being supplanted by a more targeted online alternative that has thus-far been unable to replicate the revenue generated by its offline predecessor. As TVs start connecting directly to the internet without the set-top box/cable company intermediary, one wonders if the video content producers will be as poorly prepared as their print brethren to cope with the shift in channel. Oh, and you might want to ditch that Comcast/DirecTV stock they are in an increasingly difficult position to extract what used to be duopoly profits as the way to get video content into your home.

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