True and good points. That said though, not having any actual inside knowledge or ties to the industry, I just don't see it.
Google is the largest advertiser, but they are not in the business of selling live TV advertisements. Their biggest revenue is from placing online ads which is a massive business of course, but significantly different from ads on live TV. In Youtube, they do serve ads on videos, but again it's totally different.
Now if you look at YoutubeTV, in that case they are not involved in the advertisement portion of it. They are buying the rights to broadcast TV networks which have already done the business of advertising. So in that case they are not doing any advertisement. Basically, they are serving in the role of Mediacom.
So if you look at Google, Amazon, Facebook, etc they do have experience in the broad category of advertisement and they have the capabilities of putting out a quality video stream to people. But they don't have the experience and knowledge to understand how it works packaging in those ads as part of the video feed. It's sort of like this - when Amazon started becoming what it is today - the world's biggest online retailer, and when it started taking huge bites out of the brick and mortar stores, those stores tried to fight back. They have decades of experience selling products to consumers. They'd even had their own online stores up and running for years. But they couldn't take on Amazon. They kept losing business, because they just didn't understand that secret sauce Amazon had learned, how to make money selling big box store type items in an online environment. It took years, but Walmart seems to have caught up a bit with their online presence. But they weren't able to just step in and become a competitor right away even though you would think they should. The same applies here - these tech companies do have tons of relevant experience but they haven't done it yet themselves. I think they can get there, but they're not there yet. That's why I say this round they'll go for the smaller contracts to figure it out and then swing for the fences next time around if it works.
Yes, agreed. I'm not forgetting they have a need to produce more content to keep customers interested. But if Netflix could spend $50M to produce a season of a TV show ($50M/season for Orange is the New Black for example), or they could spend billions for P5 college football content, I think they're going to pick that TV show every time. Because they know that those TV shows keep their subscribers happy. The cost difference from tens of millions to produce TV shows vs. hundreds of millions or billions to get CFB has to be made up by a corresponding increase in subscribers or revenue from ads.
