With YouTube (GOOG) around, people hardly feel the need to watch cable television these days. I mean if you get to watch the same thing in high definition without spending a single penny, why waste even a few bucks to watch the same thing on cable television in poor quality. Seems right in a way. With each passing day this decline in cable viewership is only increasing and to add to their woes YouTube keeps coming out with various ways of connecting with mass audience through their portal. Just imagine yourself seated in a couch watching soccer and just when that ‘match winner’ is about to hit a goal your screen goes blank because of bad weather. That’s frustrating, ain’t it? It now comes down to two possibilities: one- you call the technician and wait till he fixes it. The other being, you go out yourself in the bad weather and fix it up. But wait isn’t there a third way out for this? We do have YouTube. In fact most consumers in the modern day scenario prefer watching live broadcast of their favorite sport on YouTube. With Netflix already saying no live streaming of sports, Google has decided to go forward with the plans of live streaming keeping in mind the tastes and preferences of its countless online viewers.
YouTube is already a major part of Google. The company generated $ 1.96 billion in 2013 net ad revenue, doing better by almost 6.5% from 2012. The company controls 20.5% of the US video ad market, and is only set to grow in the coming year with help from mobile YouTube.
YouTube has already cracked a deal with the NBA D-League to air more than 90% of games, and is also in talks to bid for the MLS soccer broadcasting rights in late 2014.
YouTube is on its way to become the world’s numero uno online sports broadcaster in 2014. It already has more than thousand hours of footage from nearly every major sport and player, potentially allowing users not only to watch live games, but also previous games and highlights.
At the moment YouTube does not have the capability or the strength to support an 8 game $250-300 million deal. While there are multiple types of advertisements YouTube can use, including a variety of costs and impressions, the potential is there. YouTube has advantages over conventional mediums, including additional programs, special licensing possibilities, and targeted advertising. All this is because YouTube connects with a massive audience. For the time being nothing can be said about YouTube’s newest venture because it takes a lot, literally, to make a name in the space where CBS, ESPN (DIS), or NBC (CMCSA) have ruled the scene for years on end. One thing that can be done is to partner with some of these biggies because even if YouTube splits revenues it can generate quite some revenue. Investment in stocks at the moment can be a good idea as the company offers decent returns after cutting initial costs.