January 21, 2010

Global online streaming of live IPL cricket matches on YouTube

As I discussed earlier, users prefer to watch live sports on television. They go to alternate digital platforms (Web or mobile) if they don't have access to a television, or the telecast is not available in their region, or if they want to simultaneously complement their TV experience. Sports leagues/rights owners/broadcasters also prefer television for distribution because it drives almost all of the distribution economics.

Having said that, yesterday's announcement that YouTube is partnering with the Indian Premier League (IPL), the richest cricket tournament in the world, to provide live global Webcast of all IPL matches is significant.

The partnership will allow the young IPL, which starts its third annual season on March 12th, to market its increasingly popular and novel format to a global audience. In addition, it will be a boon for global cricket fans living in countries where cricket is a niche sport and hence not available on television.

Google, which owns YouTube, gets exclusive global online rights for two years. All 60 matches in the tournament will be available for online streaming, which apparently will be free for consumers. Google will monetize the content through advertising and sponsorships, and split the revenue with IPL. The U.S. market, which has a decent size international fan base even though cricket is a niche sport here, will have re-broadcast rights. DirecTV offered the 2009 IPL season package to consumers in the U.S. last year on a pay-per-view basis for $99.

This is a great win for Google, which is playing nice with premium content owners in international markets, having learned from its mistakes in the U.S. where it started on the wrong path with content owners, and until today is fighting to counter their skepticism in its efforts to secure distribution rights for premium content. IPL content is by far the biggest prize with the maximum online commercial potential in the cricket-crazy Indian sub-continent.

The Google/IPL deal follows a similar partnership struck last year between NBC Universal and Ten Sports, one of the most popular sports cable channel in the Indian sub-continent and Middle East. The partnership provided NBCU exclusive digital rights to monetize Ten Sports content on a revenue-share basis. Full disclosure: I led the formation of the Ten Sports venture and managed the business at NBCU.

As part of that partnership, we launched tensports.com as the first, free, premier sports video portal in the Indian sub-continent and Middle East. The portal was designed to stream live cricket matches in full with a highly social and interactive experience. The first major live event on the portal - the Compaq Cup Tri-Series cricket tournament between India, New Zealand and Sri Lanka - beat all expectations by arguably hosting the biggest live event ever held in that market. During the four days of cricket streamed from the week-long tournament, over one million users watched live cricket online, with an average session time of 63 minutes. More than 100,000 concurrent users were clocked on the portal during the event. U.S., a much larger Internet market in comparison, crossed the 100,000 concurrent users mark for a live online event as recently as in 2005 during the global Live Aid music concerts that were streamed by AOL when I worked there.

Our decision on the business model - ad-supported, free live streaming to consumers - also proved to be a success. The Compaq Cup was sold out with premium brand advertisers like Cisco, Samsung, Airtel (the largest mobile carrier in India), Maruti (India's largest auto maker), Xerox, and we witnessed record audience engagement (upto 10x of average CTR) .

I'm not sure how big a catalyst was the NBCU/Ten Sports success in paving the way for the IPL/Google deal, but we definitely proved the model for live online sport streaming in the Indian sub-continent - a nascent but high-potential market that is showing impressive growth.

January 12, 2010

Apple's App Store Economy

Applications downloaded on Apple's iPhone and iPod Touch generate $550MM per month in total revenue, which is shared 70/30 between application developers and Apple respectively.

Click on the image below to see its enlarged version.

January 1, 2010