Thursday, September 11, 2008

Giving Away The Farm

The news that Google is selling NBC/Universal TV ad inventory is hugely significant.
First of all, NBC are a bit better than Google at selling TV inventory after fifty years in the business, I suspect, but NBC has decided to be the bravest TV co in the market (and largely been vindicated to date).

So, why are they giving away a whole part of their business to Google?

On the one hand you could argue that they’ve seen the future and have decided not to fight against the inevitable, but rather to embrace it. On the other hand it could point to a bad upfront this year which has left them with more unsold inventory than in previous years.
Google have struggled with audio and video advertising – YouTube is far from being the money spinner it should be – so this is a real breakthrough.

The trouble is, NBC is damned if it does and damned if it doesn’t. But I have a niggly feeling that they have just given away the farm. A broadcast network exists to build and sell audiences. What happens when they give the selling part to someone else, even if it's a small part of the inventory ?

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