Google Sees a New Role for YouTube: An Outlet for Live Sports
By HEATHER TIMMONS
Published: May 2, 2010
NEW DELHI, India — The Indian Premier League, an 8-team tournament here that turns staid cricket into something fast-paced and glamorous, just ended its third season with a new champion, the Chennai Super Kings, and a new scandal revolving around allegations of financial fraud.
YouTube
A replay of an Indian Premier League match. Google will be looking at “more live events and live sports,” said Shailesh Rao, managing director of Google India.
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Times Topics: YouTube | Google Inc.
But for Google India, the series was a big hit.
Google’s subsidiary YouTube carried the league’s 60 matches live around the world, except in the United States, the first time the company has broadcast a major sporting event. About 50 million viewers tuned in to YouTube’s I.P.L. channel, 25 percent more than Google executives said they expected when they signed the deal in January. Approximately 40 percent of those viewers were outside India.
Google signed on seven advertisers in India, including Coca-Cola and Hewlett-Packard, two in Britain and one in the United States, where YouTube showed matches 15 minutes after they finished.
Now Google is shopping for other events to show on YouTube in real time, a plan that could shake up the sports broadcasting world. To date, though, live sports viewing on the Internet has been hampered by slow broadband speeds, and the reluctance of sports leagues to cannibalize profits that come from traditional broadcasters. Some broadcasters, like ESPN, predominantly show events online that they do not carry on television.
Until now, YouTube has concentrated mainly on amateur user-created content, professional music videos and short promotional clips from television shows. The only major international event it carried live before the I.P.L. was a U2 concert from the Rose Bowl in Pasadena last year, but it did not have corporate sponsors or pay the band a fee.
Now, though, YouTube could carry concerts and games from around the globe. Google will be looking at “more live events and live sports,” said Shailesh Rao, managing director of Google India, in a recent interview in his office in Gurgaon, the outsourcing boomtown south of New Delhi. Many sports leagues noticed the cricket tournament’s successful webcast, he said, and Google is having “new conversations with lots of folks.”
Live sports on the Internet have several obvious advantages over television — they can be watched anywhere, including from an office cubicle. And fans can discuss plays with other fans from around the globe through comments and posts.
Mr. Rao of Google said YouTube’s live broadcasts of sports events would “turn the world into your office water cooler.”
Because of improvements in technology, sports fans are in the middle of a “quantum shift,” said Damien Stenmark, the founder of the Stenmark Organisation, a marketing company in Sydney that sells advertising time during sporting events. They are asking themselves, “which screen should I watch the sport on?” he said.
Sports leagues will be “reveling in the fact that there is a brand new entrant to the market prepared to pay good money to the rights to quality sports,” Mr. Stenmark said.
Broadcasters “cannot ignore it, they have to find a way to include it and embrace it,” said Guy Horne, director of sports rights at IEC, a media company based in Stockholm. Eventually, “there will be no distinction” between Internet and television viewing, he said.
Right now, the big distinction is the money involved. The three-year old I.P.L. tournament has been a huge commercial success, generating billions of dollars from franchise fees, tickets and ad sales. Google did not disclose the terms of its deals with advertisers or with the cricket league, so it is impossible to tell whether the company made money from the broadcasts.
But media buyers and sports broadcasting rights experts estimate that YouTube paid less than $10 million for the rights to live-stream the tournament for two years, and the seven advertisers in India probably paid much less than $1 million each to advertise for a year. Google is sharing the advertising revenue with the cricket league, but did not provide details of that split.
In contrast, the I.P.L. sold 10-year television rights for the series for $1.2 billion.
Some observers predict the YouTube effect will be slight, at least at first.
Sports leagues “will go to television to broadcast their events when they can” and resort to Internet broadcasts only if they “can’t get a deal at all,” said Tim Westcott, a senior analyst at Screen Digest, a media research company based in London.
Sports like field hockey and cycling are the most likely to gravitate to YouTube or other live online channels, he said, because they can aggregate a huge global audience by going online, even though they may not have enough fans in a local market to interest a television broadcaster.
Sports leagues acknowledge that television networks still control the business for now.
FIFA, the organization that runs the soccer World Cup, has sold stand-alone Internet rights in a handful of countries for this year’s tournament, but often with considerable delays so they do not conflict with television broadcasts.
In China, for example, Youku.com will show all the World Cup 2010 matches and FIFA-related programming, but with 90-minute delays. China Central Television will broadcast the games live. In many countries, “broadband Internet rights are linked to the traditional TV broadcast rights,” and sold to the same entity, a FIFA representative said in an e-mailed response to questions.
It would be “very unlikely” that FIFA would strike a deal with a company like YouTube during this World Cup, the representative said. For future tournaments, though, he said, “there is perhaps a possibility.”
Not everyone was happy with the cricket coverage. Comments on YouTube’s I.P.L. page were a mix of criticism of players, chest-beating team support and complaints about the quality of the online broadcast. “It is like watching a 3-D movie without the glasses,” said one commentator, who said he was logging in from India, where broadband speeds are often slow.
And the tournament has drawn some unwelcome coverage: its commissioner, Lalit Modi, was suspended in April during a government investigation into allegations of financial irregularities. Google said it has not been approached by any government body about its dealings with the I.P.L.
This article has been revised to reflect the following correction:
Correction: May 3, 2010
Because of an editing error, an earlier version of this article erroneously stated that the Indian Premier League was a 20-team tournament.
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