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Why YouTube spent the money on NFL Sunday Ticket

Why YouTube spent the money on NFL Sunday Ticket

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YouTube is growing fastest on TVs, chief product officer Neal Mohan tells us. But say goodbye to that other RedZone channel.

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YouTube won the big bidding war for NFL Sunday Ticket yesterday, beating out Apple, Amazon, and ESPN with a deal worth a reported $2 billion a year. NFL fans will now be able to get the out-of-market games package as part of the YouTube TV bundle or on its own in the main YouTube app as part of the Primetime Channels feature.

It’s a big win for YouTube and Google, which have been slowly but steadily taking over the TV streaming market. And it makes sense for the NFL, which got a deal that looks a lot like the cable and satellite deals it’s used to, dressed up in an app that actually works along with some fancy streaming tricks like live stats and the ability to say “creators” and “Gen Z” while gesturing at YouTube.

I caught up with YouTube chief product officer (and previous Decoder guest) Neal Mohan briefly to talk about the deal, what it means for the experience of watching NFL games, and whether this gets the NFL’s broadcast partners like Fox and CBS any closer to games in 4K. (Spoiler: sigh.) I also confirmed a key difference between buying Sunday Ticket on YouTube TV over the main YouTube app: only YouTube TV will offer DVR features, per YouTube spokesperson Allison Toh.

We’re also assuming Sunday Ticket will be priced differently in the different apps, but Neal didn’t have any details on pricing yet. He did say the NFL’s RedZone channel with Scott Hanson would now be part of Sunday Ticket, which means the DirecTV RedZone channel with Andrew Siciliano is probably not long for this world. And I asked him if all this means we’re just back to cable bundles, which… well, read on.

This interview has been edited for length and clarity.

What was the best argument inside YouTube for making this deal?

Neal Mohan: YouTube’s always been a place for sports fans. We’ve had partnerships with the NFL, other sports leagues and federations, teams, athletes for years and years. A lot of our viewers have consumed sports content, whether it’s highlights, clips, live games, etc., on our platform for a long time. So it’s part of our investments along those lines.

There’s three specific things that I think make this unique in terms of the experience we can deliver to sports fans. 

The first is that living room screens are our largest and fastest-growing screens — whether it’s the YouTube main app, whether it’s YouTube TV. We’ve invested a lot there through second-screen type experiences, interactivity, hiding spoilers, et cetera. We’re working on multiscreen as well for sports fans.

The second is we have a subscription business, and it is a big part of our future. [Subscription video on demand] and [advertising-based video on demand] combined are the twin engines of our future growth. Through this deal, our fans can access Sunday Ticket through whatever point they want. They can get it on the main app through Primetime Channels, which I’m super excited about. They can get it as part of YouTube TV. They can get it obviously on all devices. 

Then the final piece, which is actually the most exciting for me personally, is the overall creator economy on YouTube and what we can do for the overall ecosystem. As part of this, we’re going to have creators have exclusive access to games, everything from the first game all the way through the Super Bowl, so that they can produce content on the NFL channel, but they can also produce their own content for YouTube shorts.

The NFL has already invested in original programming like NFL Follies and Game Day access, which was an Emmy-winning program they have on YouTube. All those creator elements are something that the league is very excited about — you’re seeing [NFL commissioner] Roger [Goodell] talk about that as well.

But I’m particularly excited about it because I know how important that is for sports fans on YouTube. Part of this is everything that we can do with creators, both in terms of formal arrangements like the one that I described [and also the] enormous amount of shoulder content on YouTube. There’s an enormous amount of commentary. The way [my son] consumes NFL content is not just the live games but all the creator commentary around it as well. I expect this to really be an investment in doubling down on that type of creativity on YouTube. 

Will creators have access to game footage directly? Will they be able to remix things that are on Sunday Ticket?

They’ll be able to work with NFL content, whether it’s game content, whether it’s behind-the-scenes access. They can produce for the NFL channel, and they can also make Shorts out of it. As you know, Shorts is one of our strategic priorities. It’s a fast-growing product on YouTube, and a lot of Shorts content is already NFL-related content. I think this will just accelerate that. 

So will you be able to remix highlights into Shorts?

You’ll be able to do things like remixing highlights, clips, interviews, commentary, all of those types of things, whatever our creators can do in that shortform format.

If I was a YouTuber and I wanted to livestream alongside a game, would I be able to do that?

We don’t have the specifics around those types of pieces worked out, but obviously, the game footage is part of the deal. The type of content you see on YouTube today — where there’s a YouTuber who is talking about the game, reacting to the game — that is going to be a meaningful part of what we’ll see on YouTube on the main app on those creators’ channels. Not just the NFL channel but on creators’ channels as well. 

Are you finally going to help the NFL broadcast in 4K?

[Laughs] There’s nothing specific about that in this deal, but I know that is a long-standing request of yours.

So we should expect 1080i and 720p broadcasts from the NFL in Sunday Ticket?

We haven’t gotten into production specifics. As you know, the Sunday Ticket package is basically the games that are produced by CBS and Fox. The regular season, Sunday games, out-of-market.

In terms of the user experience for the streams, YouTube TV does have some stats, it has some replay features. Are you going to be offering more of those?

Multiscreen is something that we have been working on for YouTube TV. So you should expect that as part of the experience.

A lot of this conversation is about YouTube TV, but I’m very excited about being able to offer [Sunday Ticket] service in a la carte fashion on [YouTube] Primetime Channels. We’re going to invest in bringing all of those features that sports lovers appreciate on YouTube TV to the main YouTube app. If you sign up for Sunday Ticket through Primetime Channels, you’ll be able to benefit from features like key plays and game highlights, hiding spoilers, and those types of features that our sports fans have kind of come to expect and enjoy on the YouTube TV side.

Do you need to be a YouTube premium subscriber to get Sunday Ticket?

No, you don’t have to be a Premium subscriber to subscribe to Primetime Channels. 

DirecTV runs a RedZone channel of its own. Are you going to keep that alive?

We have NFL RedZone. That’s part of our arrangement here. That will continue to be available. 

So you’re not going to keep the Andrew Siciliano RedZone?

Our deal is the core Sunday Ticket package, the residential package.  

For RedZone, it’ll be the Hanson RedZone.

Whatever the formal name of that is. The NFL RedZone Channel.

Will I be able to say I want one game or I want one team’s season?

Right now, it is the Sunday Ticket package. That is a bundle for the season. 

I’m assuming you’re not going to tell every bar and restaurant in America to go buy 15 Chromecasts. How do you think that will play out? 

Our deal is for residential rights. The commercial rights are separate, and that’s not part of our deal.

Are you going to have any integrations with the hardware side of Google? Chromecasts, Nest Hubs? It feels like an easy win to say “make the football follow me around the house.” 

This is about maximizing access for YouTube fans on the main app, on YouTube TV, regardless of device. For our sports fans, a lot of that is on television screens.

There’s that old quote about the only media business models being bundling and unbundling. We have definitely gone through a pretty substantial unbundling over the past decade. This feels like a big marker for the rebundling of media. Is that how you see it — that you’re rebuilding bundles or driving people toward larger bundles?

No, the way I see it is, it’s about maximizing user choice. Not only will our fans be able to access Sunday Ticket on whatever device they have — we’ve talked about living room screens, but obviously also mobile devices, desktop, and laptops — but also through whichever app they consume YouTube on.

I’m going to call you back at the beginning of next season and ask you that 4K question again.

[Laughs] I’m ready for it.

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    / YouTube is growing fastest on TVs, chief product officer Neal Mohan tells us. But say goodbye to that other RedZone channel.YouTube won the big bidd
    [See the full post at: Why YouTube spent the money on NFL Sunday Ticket]

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