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Is Google Ready To Buy Its Way Into TV With An NFL Deal?

Discussion in 'Off-Topic Discussion' started by CatfishRivers, Aug 20, 2013.

  1. CatfishRivers

    CatfishRivers Well-Known Member

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    Google CEO Larry Page Discusses TV Package with NFL Head Roger Goodell - Peter Kafka - Media - AllThingsD (click for full article)

    by Peter Kafka - August 20, 2013

    Here's a fun combination to ponder: The world's most powerful media company and America's most popular sport.

    That could happen if Google buys the rights to the NFL's Sunday Ticket package, the all-you-can-eat subscription-TV service currently owned by DirecTV.

    As I've noted before, the DirecTV deal ends at the end of the 2014 NFL season, which would mean it would make sense for the league to start talking to potential bidders now.

    And it is. Today, according to sources, Google CEO Larry Page, along with YouTube content boss Robert Kyncl, met with a delegation from the NFL led by commissioner Roger Goodell. And the Sunday Ticket package was among the topics of discussion, according to people familiar with the meeting.
     
    Last edited: Aug 20, 2013
  2. ChrisG8

    ChrisG8 Well-Known Member

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    I think the chance is very slim that Google will win the rights to NFL Sunday ticket, not zero but pretty close. If it changes and multiple companies will pay smaller amounts for a part of the rights, maybe something for Google would make sense.
     
  3. CatfishRivers

    CatfishRivers Well-Known Member

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    Mark Cuban Thinks Google Can Make the NFL Work on the Web - Peter Kafka - Media - AllThingsD (click for full article)

    by Peter Kafka - August 21, 2013

    If Google ends up getting the rights to stream NFL games over the Web, could the Web handle it?

    That is: Is America's Internet infrastructure capable of letting millions of people watch the same football games, at the same time, while delivering a TV-quality picture?

    We've seen hints that the Web is now up to the challenge, but for now we don't really have an answer. We won't know until someone tries.
    Still, I figured it would be worth asking some folks who know a bit about Web video and TV. So I started with Mark Cuban.

    Cuban, as you may recall, got into Web streaming way back in Web 1.0, and became a billionaire after he sold his Broadcast.com to Yahoo.
    Fast-forward to today, and Cuban is pouring a lot of resources into conventional TV, via his HDNet/AXS TV venture. He has also been a frequent skeptic about the limits of YouTube specifically and Internet video in general.

    Surprise! Cuban thinks the Web, and Google, are capable of delivering NFL games to your TV.

    Less surprising is that Cuban has lots of other things to say.

    Short version: Cuban says Google would be smart to grab the NFL's "Sunday Ticket" rights from DirecTV.

    Here's the long version, compiled via an email exchange today:
     
    Last edited: Aug 21, 2013
  4. ChrisG8

    ChrisG8 Well-Known Member

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    DirecTV paid billions for exclusive NFL Sunday Ticket rights, it is a loss leader and the business purpose was to attract customers who will purchase additional programming packages that would be profitable. I don't have any idea if it has worked, I have never seen a complete analysis of the cost and revenue attributed to that part of DirecTV's business. Subscriber fees directly from the NFL Sunday Ticket don't cover the contract cost, not even close, and to beat DirecTV the new buyer will be faced with the same situation. What market will pay whatever price is necessary to make that business work? I know I won't pay $300 annually or anything close to that amount to subscribe to an NFL streaming service.

    Good luck to whoever wins and when they do, I hope a good explanation is provided that will justify the price paid.
     
  5. ChrisG8

    ChrisG8 Well-Known Member

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  6. Travel

    Travel Active Member

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    Right, it all comes back to the subscription price. The Netflix "subscription base" Mark Cuban talked about is directly attributable to the fact that the subscription is $8 bucks a month. If internet TV wants to reach tens of millions of homes, it's all about the price the consumer is paying. They hate to even recognize and talk about that simple fact; they all want to keep their cabal-like, consumer-gouging at status quo high prices to the consumer. People aren't going to switch to internet-based TV just because they think it's "hip" or something. The free market isn't working in this, there needs to be new congressional reform-legislation on fair practice within the cable/content broadcasting industry. Potential "Outsider," "start-up" investors/companies are totally blocked from entering the business.
     
  7. CatfishRivers

    CatfishRivers Well-Known Member

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    The following Wall Street Journal article listed some specific numbers on what Direct TV pays and some insight on the numbers:

    HEARD ON THE STREET: Google Could Open a Hole in Pay TV's Defense - WSJ.com (click for full article)

    by Miriam Gottfried - August 21, 2013

    From the article:

    "It is possible the NFL may have leaked news of the meeting to gain leverage in negotiations with DirecTV, which pays $1 billion a year for Sunday Ticket. That contract extends through the 2014 season, but analysts expect a new one to be announced this year.


    The satellite-TV provider generates about $725 million a year in Sunday Ticket revenue from about 2.8 million subscribers, Citigroup estimates. On that basis alone, it already loses money on the offering. But DirecTV has used Sunday Ticket to differentiate itself from competitors and retain subscribers. The latter becomes even more important as more consumers cut the cord; unlike cable companies, DirecTV lacks a broadband offering.


    Still, there could be a price at which the costs would outweigh the benefits. Including the profit DirecTV generates on other content from Sunday Ticket subscribers and the scale benefits in terms of lower content costs that it gets from having those subscribers, Citigroup estimates Sunday Ticket would become uneconomical for the company if the price rose to $1.5 billion a year.


    That might be a worthwhile price to pay for an entree to TV for Google, which had $54 billion in cash at the end of the second quarter. MLB.com, Major League Baseball's direct-to-consumer online subscription offering, retails for $129 a year. But football is more popular, so Google could perhaps charge as much as $200 for Sunday Ticket.


    Knowing Google, though, it might well end up charging far less, aiming to broaden its reach and drive ad revenue. For the search giant's TV ambitions, springing for the NFL could deliver the winning field goal."
     
    Last edited: Aug 22, 2013
  8. ChrisG8

    ChrisG8 Well-Known Member

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    Some wild speculation except when it comes to the fact DirecTV loses about $275 million a year on NFL Sunday Ticket without accounting for the costs attributable to connecting and providing service for the NFL Sunday Ticket subscribers or the profit on other services from those subscribers that wouldn't subscribe if it wasn't for NFL Sunday Ticket. I don't think DirecTV is going to win this auction if the price is going to be $1.5 billion and I am not convinced it is a profitable business at the $1 billion price per year. How Google or anybody else can make this business work as a streaming service sure isn't obvious to me.
     
  9. CatfishRivers

    CatfishRivers Well-Known Member

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    A Google NFL TV Buy Does Not Mean DirecTV Must Exit - Forbes (click for full article)

    by Mike Ozanian - August 22, 2013

    National Football League commissioner Roger Goodell should put a sign on the outside of his office door that says: You need us more than we need you.

    A case study of how those that control the most valuable content on the planet sell it for maximum value is currently being scripted. Google's interest in NFL content, first reported two days ago by Peter Kafka, illustrates how the league benefits by selling rights by device, versus by platform (what other leagues have pursued through the TV Everywhere approach).

    Most important thing to understand: The NFL is the first choice of any technology company looking for content to get consumers to buy its devices-whether it be Google, Apple, or NetFlix.
     
    Last edited: Aug 23, 2013

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