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.

Television in India needs quality content

I'm currently in India due to a family emergency. My dad was hospitalized after a heart attack, so I came over to spend some time with him and am staying over for his bypass surgery. On the brighter side, I've been able to use the free time while staying in his hospital room to catch up on my reading. I've also been watching a lot of TV (or trying to) in order to evaluate the much talked about Indian television promise first-hand.

While the exponential growth in the number of TV channels is amazing (couple of hundreds from just a few when I left India in '95), the vast majority of the content is pathetic, so say mildly. There is lack of quality programming in all the three major content categories: news & information, sports, and entertainment.

The state of the News programming on Indian television is particularly shocking. We make fun of 24-hour cable news channels in the U.S. and their coverage of un-important matters in order to fill their programming, but their Indian counterparts have pushed the boundaries to insane levels. In order to attract viewers, almost every news story is labeled as "breaking news." There is unnecessary, and sometimes distasteful sensationalism. Ethical standards of journalism are pitiful. A maniacal focus on economics seems to be driving the news coverage in India. E.g., while covering tragedies involving deaths, instead of showing dignity for the dead or for the family & loved ones who are suffering from the pain of the loss, the pursuit by TV channels to get that exclusive interview/footage at whatever price is appalling. Investigative journalism needed to expose the truth has apparently become secondary.

I've always held the belief that News should not be treated as a profit center by media companies. The age-old practice of keeping a Chinese wall between the business and editorial parts of a news organization has fallen apart in today's bottom-line focused approach of media companies. Even in the U.S., it's not uncommon to learn that a news organization has more staff in the Hollywood than in Washington DC.

For the next content category, sports, it's all about cricket in India, by every stretch of imagination. There is coverage of soccer and tennis that coincides with major global sporting events (European Cup, Wimbledon, etc), but the inability of India to produce world class sports persons in any mass sports except cricket will continue to restrict wider advertiser interest & therefore media focus in developing Indian sports programming beyond cricket.

Entertainment, or the General Entertainment Channel (GEC) space, as it is known in India, has seen a lot of activity with almost a dozen major players operating GEC channels in the country. Zee, Sony and Star (News Corps) are the dominant players. The #1 GEC channel, STAR Plus, has more viewers than the combined viewership of the next two in the category.

However, the GEC programming is still dominated by Bollywood (the Indian film industry), soaps, and reality shows based on imported formats. The ability of GEC operators to develop original entertainment programming of quality that can sustain the content and audience in the long run is still questionable. For example, India is yet to see TV drama franchises of the quality of Lost, 24, Heroes, that attract record audiences in the U.S. season after season. Granted that it can cost up to $3M to produce a single episode of these programs, I believe the economics will work out in India given the growth in its television industry and a deep demand amongst audience who are thirsty for quality entertainment options on the television. The GEC category already gets the largest share of the TV advertising dollars in India. The state of the GEC space in India seems to be where the industry was in the U.S. in late 80s.

The GEC also needs to invest in quality programming to compete with cricket. As expected, the Indian Premier League, a recently launched domestic cricket tournament, made a massive dent on the ratings of prime-time entertainment programming while the tournament was on. Almost all GEC channels lost audience to IPL, which purposely scheduled games during the prime-time evening slots. Some channels maintained their ratings by shifting programming to daytime slots. Clearly a more sustainable strategy that involves disruptive content with clear differentiation is required by GEC operators in India.

Primetime bonanza for the Indian television market

The Indian Premier League (IPL), the world's richest domestic cricket tournament, begins this Friday in India. Launched along the lines of soccer leagues in Europe and professional sports leagues in the U.S. (NFL, NBA, MLB), IPL is a franchise model wherein corporates and sponsors are allowed to buy and run teams. Players are bought through an open auction. This is a first for cricket - the sport has never before been played in this franchise format anywhere in the world. For the inaugural tournament starting on Friday, eight franchises in India were sold off by the governing body for Indian cricket, the Board 0f Control for Cricket in India (BCCI).

IPL is expected to change the face of the global cricket. "Seismic," is how Telegraph UK characterized the effect of IPL on cricket in England, the game's birth place. The sheer size of money involved is completely unprecedented. Before even a ball has been bowled, IPL has already raised more than $1.8bn for its first 10 years through TV rights ($1,026M), franchise auction ($724M) and sponsorship ($108M). This amount is more than what the International Cricket Council (ICC), the official global governing body of cricket, will generate from all of its tournaments over the same period. Pundits are still in a state of shock.

Franchise owners include Mukesh Ambani, head of Reliance Industries and India's richest man, who paid $112MM for the Mumbai franchise. 78 of the world’s leading players were sold in February to the highest IPL bidders for ~$42 million. Earning up to $1.5MM for a three-year contract, many players are making significantly more than what they will ever make playing for their respective countries.

There are obvious concerns for the wider game of cricket - IPL's astronomical salaries and scheduling demands in a busy international cricket calendar (managed by ICC) threaten the fragile balance of international cricket, and ultimately the autonomy of the ICC. BCCI has often been blamed for arm-twisting ICC, given that India's one billion plus cricket-crazy fans drive over two-third of the global cricket revenue. Then, there are fears of players abandoning playing for their country (currently a matter of deep pride & prestige), or retiring early from international cricket in order to play in the IPL.

The U.K. newspaper Guardian quotes Andrew Wildblood, a senior vice-president at the leading sports agency IMG who has been involved in establishing the IPL: "There has never been anything like this in the history of sports. No competition has come from a standing start to where we are today in such a short space of time, or with more financial success."

What's driving this phenomenon? Several factors are contributing to this perfect storm in India.

While ticket sales will contribute to the revenue, the single biggest factor determining IPL's success will be television. India, one of the fastest growing economies in the world, has a huge untapped domestic market for new products & services. Its advertising market therefore is exploding. Indian TV advertising grew by over 20% per year on average for the 10-year period 1995 to 2005. Double-digit growths are forecasted for years going forward. Compare that to flat to declining television advertising in the mature U.S. and western European markets. The New York Times covered India's television potential in its aptly titled piece, In India, the Golden Age of Television is Now.

Cricket, a religion for Indians across its diverse national fabric, aggregates audiences like no other TV programming in the country. Cricket therefore provides the best platform for advertisers to get their message across all demographics. A nationwide, prime-time, cricket bonanza on the Indian TV every evening is a feast for hungry advertisers that will go on for over six weeks. This is bad news for the Indian media companies, who'll find it very hard to compete with cricket for TV ratings.

"India is a rapidly growing economy with an emerging middle class, but if you want to go out here you go to a movie and that's about it. There's a huge demand for entertainment, and we are providing the perfect product model," says IMG's Wildblood.

The IPL tournament is structured in the new Tewnty20 format, the shortest version of cricket that lasts for only three hours compared to One-Day Internationals (8 hrs) and Test matches (five days). Twenty20 is designed to attract the widest section of cricket fans - people can go to the game on weekday evenings after work; women with family responsibilities can easily take a three-hour break. In India, the Twenty20 format has proved successful in drawing in the young, socially mobile demographic that is fueling the country's economic growth. On top of that, India's win in the inaugural Twenty20 World Cup last Fall (organized by ICC) has driven the version's popularity and public expectation sky-high. BCCI wants to cash on it as best and as fast as it can.

Let the show begin!