SBJ/January 9 - 15, 2006/E Sports

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  • Google gets in the game with NBA

    Google Inc., perhaps the most ubiquitous brand name on the Internet, is making its first entry into the sports world through a video download deal with the NBA.

    The new Google Video Store, located at video.google.com and announced last week at the International Consumer Electronics Show in Las Vegas, will feature full-length, downloadable videos of every NBA game this season. The games will be made available about 24 hours after completion for viewing predominately on a consumer’s home computer. Each game will cost $3.95.

    Some archival games will also be sold, with a focus on more recent player accomplishments such as Kobe Bryant’s 62-point outburst last month against Dallas. Marquee events, such as recent NBA Finals, will not be available immediately, but are being considered for future release.

    Some archival games, such as
    Kobe Bryant’s 62-point performance
    against Dallas last month,
    will also be offered.

    At launch, the NBA is the only provider of sports content for the new service. The video feeds will be the same as those distributed through the NBA League Pass out-of-market television package.

    The deal does not mean that Google will have a dedicated sports strategy for its Video Store, which may come as a disappointment for rights holders who’ve been anxiously awaiting the influential company to come knocking on their doors.

    “We’re essentially content agnostic,” said Peter Chane, senior product manager for Google Video. “What we’re about fundamentally is connecting people with data.”

    Rather, Google intends to be a large, accessible destination point for a wide variety of video content, and the move creates an immediate competitor to Apple Computer Inc.’s successful iTunes online store. But the deal nonetheless marks a marriage between the massive consumer reach of Google, owners of the Internet’s most popular search engine, and a sports league eager to make an aggressive move into video downloads.

    “This is a natural place for us to be, and really, it’s only the beginning,” said Brenda Spoonemore, senior vice president of interactive services for NBA Entertainment. “We intend to be very aggressive in exploiting all these new channels of content distribution.”

    Analysts say other sports leagues will likely follow the NBA’s lead by making dowloadable video available via multiple online storefronts and for various devices. What remains undetermined, however, is exactly how much of a market exists for sports video downloads, making this pact, along with Apple’s recent iTunes deal with ESPN and ABC Sports, important litmus tests.

    “There is lots of room to play in this space, and if I’m a content provider, I’m looking at as many distributors as possible,” said David Card, JupiterResearch analyst. “Apple has done a lot to re-energize the music business, but I don’t think they’ll be quite so revolutionary in the video business. Google will have a lot of room to run. And for the NBA, this is a very low-risk move since it’s so early in the development of all this. They’ll have a lot of luxury to play with pricing, content, formatting and so forth.”

    A multipronged marketing effort to trumpet the NBA-Google alliance is being developed, league officials said.

    Financial terms of the deal were not disclosed, but the two sides have a revenue sharing agreement for all of the $3.95 download fees collected.

    The NBA videos will not be transferable to mobile players such as the iPod. Viewing on regular TVs will also be difficult; while the content can be burned onto DVDs, they will be watchable only in conjunction with Google Media Player software that will be distributed through the new store, ruling out most stand-alone DVD players. The software will be a fundamental component of the store, similar to the proprietary software Apple uses for iTunes.

    “The [digital rights management] is all going to be up to the content provider,” Chane said. “That, we think, is a major part of this venture. Some content is going to have very open standards, while some others will be different. We’re providing as much flexibility as possible.”

    To that end, the Google Video Store is also offering a rental model in which videos are offered at a lower price but become unwatchable after 24 hours. The NBA video though, will be for sale only.

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  • Next for iPod: NHL and NASCAR

    The sports industry’s fascination with the new video iPod has turned into a full rush of dealmaking, with the NHL and NASCAR close to reaching agreements with Apple Computer Inc. for video downloading.

    ESPN and ABC Sports announced a deal with Apple’s iTunes online digital download store last week, joining other Disney properties in making video clips or entire shows available for $1.99 each.

    Officials at both the NHL and NASCAR said they have similar deals that are within weeks of completion. MLB Advanced Media also is actively negotiating with Apple about an iTunes deal, executives there said.

    “It would be fair to say we are close,” said Doug Perlman, NHL executive vice president of media. The NASCAR deal, meanwhile, could be complete in time for next month’s Daytona 500, industry sources said.

    Apple officials deferred comment to ESPN and ABC Sports.The rush to sell sports content on iTunes arrives as the video iPod has quickly proved to be a massive success. Debuted in October to strong reviews, the next-generation iPod has fueled sales of more than 3 million videos, and attracted both ABC and NBC to sell their top-rated entertainment programming through the service, including shows such as “Desperate Housewives” and “The Office.”

    Now, every other major content provider and hardware developer is scrambling to offer video for download, either through iTunes or a competitive service. Google’s announcement last week regarding the creation of the Google Video Store — with the NBA signing on as an initial content provider — added a powerhouse new player in a market that has developed practically overnight (see related story).

    The ESPN/ABC content on iTunes — the first sports video to hit the service — will consist initially of condensed versions of the recently completed Bowl Championship Series, and a battery of ESPN-created programming such as “SportsCentury,” “SportsCenter” commercials and ESPN Original Entertainment features. As of late last week, 15-minute highlight packages of the BCS games were among the top downloaded programs on the iTunes service.

    Financial terms of the iTunes deal were not available, but Apple typically arranges revenue-sharing agreements with content owners to share collected fees.

    ESPN executives, initially cautious on how iTunes would coexist with the forthcoming ESPN Mobile venture, now see the two projects as complementary. The ESPN Mobile phones will feature many of the same programs, though on a streaming basis.

    BCS bowl game highlights were among
    the top downloads on iTunes last week.

    “We were watching very carefully how the ABC [entertainment] content was being received, and the market clearly has spoken,” said Sean Bratches, executive vice president of sales and marketing for Disney and ESPN Networks. “We’re putting our foot in the water, and I’m sure we’ll continue to go deeper as time goes on.”

    The advent of the video iPod and downloadable video creates a whole new set of rights issues that leagues and networks must address. ABC’s BCS contract included a supplementary agreement for non-live, mobile distribution, Bratches said. Other ESPN content, however, could be encumbered by agreements that are limited to television or other specified new media outlets.

    When they can, rights holders are looking to do their own agreements, bypassing the television networks and dealing directly with Apple, Google or any third-party that will compensate them for these rights.

    The NFL is about to begin active discussions with several suitors for its new national Internet deal, a pact that could include expanded provisions for video downloads. The NBA, meanwhile, is playing the field.

    “The iPod is a great device and it’s exciting to see what’s happening,” said Brenda Spoonemore, senior vice president of interactive services for NBA Entertainment. “Apple, however, is only one piece of a much larger distribution model. The key thing is having the best available content in the most convenient manner for fans.”

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