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YouTube’s Ticket for the streaming sports express

Sports streaming is expected to be one of the big TV industry themes for this year. And the news at the end of December that Google’s YouTube had secured the rights to the US NFL’s Sunday Ticket, a subscription package that allows users to watch most Sunday afternoon football games, provides further compelling evidence that the age of premium sports livestreaming is upon us.

YouTube’s the US$14 billion, seven-year deal will see the streaming platform usurp legacy pay TV player DirecTV as the home of Sunday ticket.

However, in some ways YouTube’s move is about the televisionisation of streaming rather than the streamingisation of television.

NFL will be offered on YouTube TV, the streaming platform’s TV service, and YouTube Primetime Channels, the aggregation offering it launched late last year, where it is available via the main YouTube app. Both YouTube TV and Primetime are subscription offerings. And Sunday Ticket will evidently be sold as a season bundle rather than broken up into a smorgasbord of à la carte options.

The high price paid for what is exclusively a subscription service with what is reportedly a relatively limited subscription audience on DirecTV has led some observers to question the value of this particular deal to Google. While the YouTube service may have functionality that DirecTV lacked, the inference is that YouTube will have its work cut out to attract a base large enough to turn a profit on the investment.

Nevertheless, for Google and YouTube the move into premium sports has a strategic significance. Subscription is seen as a key growth engine for YouTube at a time when competition in advertising is growing. Interestingly, the NFL deal apparently does not include any advertising element for YouTube.

Building a strong subscription service also puts YouTube in more direct competition with streaming-tech giants such as Apple, which has invested in Major League Soccer and Major League Baseball, or Amazon, which has invested in a wide array of rights internationally.

YouTube executives are also keen to highlight the features their platform can bring uniquely to sports, including giving YouTube’s creator community access to games, enabling them to produce content around it for the NFL YouTube channel, which is part of the deal, and also more informally for YouTube in general.

International prospects

Between this deal and the NFL’s major raft of agreements struck over the last year, the US football body clearly has grounds to be pleased with itself. But the growing interest and investment of streaming giants such as YouTube in live sports could revive the fortunes of sports rightsholders internationally too.

Whether YouTube will follow up on this venture into premium sports by bidding for rights internationally remains to be seen, but the prospect is likely to excite sports bodies such as the Premier League and others who have seen fewer rather than more competitors table bids for their packages in recent times.

Not everyone is convinced. Outside of the US, even sports-investing streamers such as Amazon have been cautious about going big for in-country premium rights thus far, while Netflix remains sceptical in general. Speaking at a recent UBM TMT conference, chief content officer Ted Sarandos said he did not see a clear “profit path” from big-league sports.

However, the obverse of Sarandos’s take is that sports offers a clear path to subscriber loyalty at a time when the appetite among the public for more SVOD appears to be waning, and when streamers are beginning to cut back on investment in new drama series that offers an uncertain return. Sports, like advertising for SVOD players and subscription for YouTube, will likely play a big role in the ongoing diversification of the streaming business model.

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