CBS, NBA Already on Board; Internet Distribution Service Competes with TV Networks

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NEW YORK ( -- Google’s entry into the online content business will allow users to buy or rent programming on a pay-per-video basis from CBS and the National Basketball Association. With the introduction, Google pits itself against TV networks, Internet portals and any company that produces or distributes video content for an online audience.
Photo: AP
Larry Page

The service, called Google Store, offers rental of CBS content from top-rated shows such as “CSI”; purchase-to-own videos of last season’s “Survivor” segments; and 300 episodes of classic TV shows like the "Brady Bunch" and NBA games available to own 24 hours after they air, among other clips. In addition, anyone may sell their own videos in the store and set their own price. Copyright protection is optional.

Google Store was announced in a speech by Google's co-founder and president of products, Larry Page, at the Consumer Electronics Show in Las Vegas tonight.

'Monetize as they wish'
Some of the content is download-to-own, some download-to-rent and some is free. “What we’re doing is allowing content providers to distribute and monetize as they wish,” Peter Chane, senior business product manager for Google Video said in a briefing before the speech.

The service does not have an ad component yet, but “we are open to helping content providers monetize with advertising,” he said.

Google is the undisputed leader in paid search, capturing nearly 30% of online ad revenue in 2005, according to eMarketer estimates. But it needs to diversify if it wants to continue as a leader when search growth levels off, analysts say. Google has been aggressively seeking ways to do that. One effort is its Gmail service, another is the business-development deal it signed with AOL in December, part of which would provide to Google Video thousands of video clips from AOL’s parent, Time Warner.

The Google Store represents the most dramatic attempt by Google since it began indexing text to achieve its oft-stated model of organizing the world’s information.

'Portal-like reputation'
Safa Rashtchy, managing director of investment firm Piper Jaffray, raised the price target on Google’s shares for 2006 to $600 from $445 in part because of the innovative products that Google has introduced. “The buzz that Google is creating by introducing all these new products is creating even more brand loyalty and driving more people to search than ever before,” Mr. Rashtchy said. “Google is gaining a portal-like reputation without being a portal.”

The Store's unique offering is the ability to own -- instead of just view -- content. With its flexibility, Google leaps ahead of what broadcast and cable networks have so far presented in their pay-per-view schemes. And Google takes a swipe at rivals Yahoo and MSN, portals that compete on which can post content most compelling to consumers. But neither has a video-on-demand deal that lets consumers own content for a fee, or even rent content for a restricted time period.

The NBA deal is unique in another way. It's the first time professional sports games will be available online in their entirety. Until now, sites like Major League Baseball's presented highlights of games or condensed games for users to watch.

“NBA fans are young, hip, wired and on broadband,” said Brenda Spoonemore, senior VP-NBA Entertainment, who oversees NBA interactive. The NBA games on Google allow fans to see all the action if they missed a game, she said. Users can pay $3.99 to own the games. Classic games can be downloaded for $3.95.

As for CBS, in addition to “CSI,” other current programming that will be available include “NCIS” and “Amazing Race,” Mr. Chane said. These shows are offered for a 24-hour rental price of $1.99. The classic programming and “Survivor” episodes are presented to own, and can be downloaded for $3.95. Classic shows include “The Brady Bunch” and “Star Trek Voyager.”

Pay-per-view deals
Other pay-per-view video deals in place online include ABC's and NBC's deal with Apple to offer some of their programming on iTunes for $1.99 a download. NBC and Fox each offers programs on-demand through DirecTV for 99 cents, and CBS has a similar on-demand deal with Comcast. Most recently, DirecTV announced it would offer shows from the popular FX Network on-demand before they’re scheduled to air for $2.99. No network has struck a significant deal to offer up pay-for-play on=demand programming through a portal.

Now that Google has built its content store, will consumers come? “Google is the king of buzz right now and consumers have a latent, gut desire for [this sort of content],” said Todd Board, senior vice president, Ipsos Insight, a market research firm specializing in consumer technology. “Google has this amazing video-search capability. When people realize how easy it is to get this content, they will come.”

The store also features 40 other content providers and thousands of videos for sale, Mr. Chane said. About 60 music videos from Sony BMG artists Christina Aguillera and Destiny’s Child, among others, are offered, too. The independent film distributor GreenCine has posted its feature-length films, and PBS interviewer Charlie Rose has put up for sale the archival footage of his programs. Mr. Rose’s shows, available for 99 cents, are not protected by copyright. “The advantage of not having copy protection is that users can transfer the videos to portable devices,” Mr. Chane said.

The roster is esoteric by design, Mr. Chane said. “We want all the video that’s online as well as the video that’s offline,” he said. “We are agnostic to the content provider.”

These items join a conglomeration of thousands of videos on Google Video that consumers have uploaded themselves or that Google has placed in its index from spidering the Web. As a result, the site, which has been in beta for the past year, has somewhat of a home-movie look and feel. Professional sports and entertainment clips are sure to change all that.

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