NBC Universal Signs With Google: Favorable Terms Plus Bonus: A Jab at Steve Jobs!

Categories: Internet TV

Written By

September 8th, 2008

Update: NBC is coming back to iTunes with the launch of new iTunes software version 8, so obviously this wasn't really a jab at Jobs, but if you can't have fun being a little snarky sometimes it would take a lot of the fun out of blogging....

Call me a cynic, but when I saw NBC Universal partnered with Google for Google’s version of Adwords for television commercials, the first place my mind went was “OK, Eric Schmidt, CEO of Google is also on the board of directors for Apple…” NBCU famously pulled its content off of Apple’s iTunes, allegedly because it wanted to be able to control how much it charged for TV show content and Apple wouldn’t budge. But the thing is, wherever NBC is selling its content post-iTunes, it’s still selling it for the same $1.99 per show it was on iTunes. I conclude NBC just doesn’t like Steve Jobs much.

Eric Schmidt is definitely a more likable guy than Steve Jobs. Steve is a genius, perhaps an evil genius, but a genius, while Eric’s reputation, at least pre-Google was that of the consummate nice guy. Apple has a nice relationship with Google and now Google has a relationship with NBC Universal.

OK, so I don’t really think that NBC did this just to take a poke at Steve Jobs before bringing its content back to iTunes anyway someday (hopefully soon). NBC isn’t the best network when it comes to scripted (or even unscripted) content on its broadcast network. But, NBC seems pretty smart about managing margins. The Google model for advertising is just more efficient all the way around, and so any ad inventory NBC can’t sell via the upfronts, whether it be for NBC proper, USA, SciFi, etc. can likely be sold far more efficiently and effectively via Google. The deal however currently only extends to NBC's cable properties from MSNBC and CNBC to Oxygen.

While no financial deals were disclosed, one must assume that NBC got a very good deal because Google is desperate to have its fledgling TV ad business take off. Now it finally has a real partner. In the near-term this is a much bigger deal for Google than it is for NBC, which is why it’s easy to conclude NBC got very favorable terms. Now NBC must convince ad buyers to use it -- it will be interesting to see how it goes. I’m looking forward to (theoretically, anyway) finding out how much it will cost to advertise on the remainder of the runs of Battlestar Galactica and Stargate Atlantis via Google.

The people who sell this advertising -- you know the people with fat expense accounts who are paid huge commissions -- won't love this. But it's very likely that the market exists where Google can do all of that better and cheaper. That’s obviously not lost on the margin-minded Suits at NBC.

 
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