Google in Content Deal With Media Companies
Google built an empire delivering advertisements across the Internet, and now it plans to distribute content from media companies just as aggressively. — Google is working with Dow Jones & Company, Condé Nast, Sony BMG Music Entertainment …
Context & Ripple Effects
Google had already identified traditional media as a source of growth and, in October 2006, began sharing advertising revenue with videographers. The arrangements with Dow Jones, Condé Nast and Sony BMG extend that model from individual video creators to established rights holders.
The reported experiments placing YouTube and Google Video players in search results give Google a distribution surface for licensed clips, while the planned copyright filtering addresses a central concern for media partners.
First-order effects
- Dow Jones, Condé Nast and Sony BMG gain access to Google's online distribution and advertising infrastructure for their content.
- Google adds professionally produced material to the video and search experiences it controls, strengthening the inventory it can sell to advertisers.
Second-order effects
- Yahoo faces added pressure to match Google's publisher terms as Google's advertising advantage helps it recruit recognizable media brands.
- Google's planned copyright filtering becomes commercially important to Sony BMG and other rights holders because licensed distribution depends on distinguishing authorized clips from infringing uploads.
Third-order effects
- If established media groups continue to license content through Google, online distribution shifts toward a platform model in which publishers supply programming while Google controls discovery and advertising sales.
- Revenue-sharing arrangements can make platform access a larger part of media companies' digital strategy, concentrating leverage with the service that aggregates audience and ad demand.
The trend: Online advertising platforms are moving from monetizing user-generated video toward negotiated distribution and revenue-sharing relationships with professional media owners.