Friday, November 17, 2006

YouTube's Deal with the NHL Will Change the Landscape of Sports Media

As I discussed the rumors in previous posts, the National Hockey League and YouTube have officially agreed to a deal in which "the league will provide the video-sharing site daily footage including game highlights and behind-the-scenes features" (Sports Business Journal, 11/14/06). YouTube will create an exclusive NHL channel and supplement its NHL content with user-generated hockey material. Similar to YouTube’s recent content-sharing deal with CBS, YouTube and the NHL will share revenue through this deal. As part of the agreement, the NHL will have the right to "remove protected content from the site posted by others".

This deal with the NHL is YouTube's first official partnership with a major professional sports league in America. However, many don't anticipate YouTube's growth to end with the NHL. YouTube VP/Content Kevin Donahue said "We are in active conversations with the other leagues, and are making a lot of progress... this is a true milestone for us. We anticipate creating a truly great forum for hockey fans." The NHL recently signed a deal to make full-length games available through Google, so the YouTube deal strengthens the NHL's online presence. Additionally, the NHL has been making strong attempts to begin offering live online streaming of games, and an option is expected to be available later in the season.

Obviously, the NHL is ahead of the curve when it comes to utilizing new media to promote its sport. The NHL realizes that the Nielsen TV ratings don't necessarily reflect the number of fans their game is reaching. In today's world, people are becoming exposed to sports through outlets other than television and newspapers. Websites, blogs, fantasy pools, and online streaming videos all expose the sport to more fans than ever before. Many professionals in the industry believe that this YouTube-NHL deal will change the media promotion in professional sports forever. Wahsington Capitals Owner Ted Leonsis said Google’s efforts with YouTube will "change the new media landscape as other entities, including sports teams and leagues, try to aggregate and centralize their video content." Leonisis believes that once this is done, it will give advertisers the opportunity to "sell selectively.”

Along with online video content, the NHL will be exploring the area of blogospheres to create revenue in the future. With the Washington Capitals creating a large blogging community, Ted Leonisis explained that he believes the team will “begin selling advertising and search fields, while building tools and syndicating out across their entire blogosphere”. In theory, these new ad units will allow advertisers to buy a presence across the team’s entire online community. These new forms of advertising will create additional revenue for the league, while increasing the team’s presence in the online market.

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