Thursday, August 22, 2013, 1:13 PM ET|Posted by Will Richmond
The Internet has been buzzing this week with the idea that Google may bid for the NFL's Sunday Ticket package, which is with DirecTV through the 2014 season. The root of the buzz is a story in AllThingsD that NFL commissioner Roger Goodell met with Google's CEO Larry Page and YouTube's head of content Robert Kyncl and that one of the things they discussed was Sunday Ticket.
Did they seriously discuss Sunday Ticket or was it the last item on a list of things they were spitballing? Who knows. But let's assume for a moment that Google actually WAS interested in Sunday Ticket. Could it happen and does it make sense?
There's certainly no financial impediment for Google. DirecTV pays about $1 billion/year currently. Even if Sunday Ticket's value increased by 50% (which is less than the 60-70% increases the broadcasters and ESPN paid to renew their NFL deals in the past 2 years), it would still be small change for Google. Rather than the money, I see at least 5 big challenges Google (and the NFL) would have to surmount:
Bandwidth/User Experience - The 2 million+ subscribers to Sunday Ticket who pay $250/year are hard core football fans (often big betters and/or fantasy fanatics) who want a flawless HD experience. With the exception of Google Fiber, no broadband ISP can or will guarantee this. Broadband today is a "best efforts" pipe, with no service level guarantees to content providers. Add to this reality the inherent deliverability challenge that live-streaming has vs. on-demand content. There is currently no way Google could assure subscribers they'd get the same quality experience DirecTV has been giving, and that's a big problem for NFL too.
Connected devices not ready - Even if Google could get the stream Sunday Ticket to the subscriber's home, it still must be viewable on the big HDTV. But today's connected devices and TVs have different capabilities, and, for the most part, weren't architected to handle live streaming. Even Chromecast, Google's stellar new device, isn't in a position to handle football's fast action. My recent experience streaming the PGA Championship via Chromecast to my HDTV was a total buzzkill as Chromecast couldn't flawlessly track even a slow-rolling putt. Chromecast wouldn't stand a chance of handling a Tom Brady zinger over the middle.
TV advertising risk - All of the broadband/user experience/connected TV issues above also create a roadblock for TV advertisers who pay big bucks to be on NFL games. They too want pristine delivery and despite the incremental engagement online would offer, if the stream were to freeze during their ad, they'd howl. Again, a big risk for the NFL.
No pay-TV service from Google - Sunday Ticket is a means to an end, not an end in and of itself. The lure of Sunday Ticket for Google is to promote a larger nationwide pay-TV service. But, outside of its Google Fiber footprint, Google doesn't have one, and is unlikely to anytime soon for all kinds of reasons. So what does Sunday Ticket really buy Google? It's hard to see.
Broadcaster concern - The LA Times pointed out a wrinkle related to ratings that I hadn't thought of. Sunday Ticket counts toward CBS's and FOX's national ratings, but not their LOCAL ones. So if Google were to significantly bump the number of Sunday Ticket viewers because of its broader addressable universe, and this were to detract from the ratings for the locally-carried game, the big broadcasters who also own stations would be unhappy. And note, they're the ones who have committed $28 billion to carry the core of the NFL schedule, so their opinion counts a lot. (A side issue here is they might be concerned Google could help drive cord-cutting longer-term too.)
Add it all up and while it's tantalizing to think of what Google stepping up for the Sunday Ticket package would mean for the OTT industry, it still feels like a big stretch. While I CAN see this happening somewhere down the road, a deal within the next year, which is the negotiating timeframe, seems highly unlikely.