Google is known to be a data driven business. Virtually every decision the search giant makes across all its product lines is supported by rigorous data analysis. Competitors like Netflix are also known to do the same, carefully observing what users do to build products that they find pleasing.
This is how we know, for instance, that Yahoo grossly overpaid for the rights to stream the first NFL football game on the web. Given that both Google owned YouTube and Netflix took a pass on the game, we know Yahoo overpaid - likely by a decent sum. The same can probably be said for Yahoo's decision to hire Katie Couric, who didn't exactly have big web TV companies beating down her door to procure her services.
Yet Google and Netflix are hardly sitting still, as Google on Friday confirmed plans to pursue the newly created, multi-billion dollar, online TV gaming market.
Specifically its YouTube property will focus on televising video game battles, with the launch later this year of a dedicated YouTube app and website.
The move comes after the company failed to buy Twitch, the leader in televised eSports, for $1 billion last year. The move was announced in a blog post on Friday, with the new service coming to the U.S. and UK this summer.
Google appears to have put considerable effort behind signing video game publishers, announcing that "more than 25,000 games will each have their own page, a single place for all the best videos and live streams".
Popular games such as Zelda, Call of Duty and Asteroids will have their own channels.
Interestingly, Google announced that gaming content will be "front-and-centre" on a newly redesigned YouTube site.
The move highlights Google's appreciation for the economics of web TV, which is about low cost production and wide distribution rather than the high quality production value of traditional TV.
For Yahoo this could be problematic, as they are taking the opposite approach, spending $10 million per year alone on one single news anchor. While Google is operating on cold, hard numbers, Yahoo is pursuing an old media strategy that probably won't end well.
YouTube's product manager Alan Joyce said of the move:
"On top of existing features like high frame rate streaming at 60fps, DVR, and automatically converting your stream into a YouTube video, we’re redesigning our system so that you no longer need to schedule a live event ahead of time. We’re also creating [a] single link you can share for all your streams."
Google's move will also counter Amazon acquiring Twitch. Expect more YouTube announcements this summer, particularly around virtual reality and 3d videos. 2016 looks set to be the year VR goes mainstream and its unlikely YouTube will be missing the party.