Sitting on huge cash gives corporate giants an edge, but the way they use it determines how sensible and professional they are. That’s the beauty of the startup business: if it clicks, and only then, it pays back in loads of cash. However, the real challenge starts when they reach a plateau. Apple has been there, Google had its time, and now it seems to be Facebook’s turn.
License to Disrupt?
Saturation in Facebook’s growth is quite evident. Twitter, Instagram and several other players are on track and buzzing way more than Facebook. In a desperate move to retain growth and not willing to lose its stature, Facebook is trying all tricks.
Broadcast license and streaming seems to be one of their biggest bets. Last year, the social media giant bid for five-year media rights of the Indian Premier League (IPL); however, its bid of Rs. 3,900cr lost. Learning from its past mistakes, Facebook recently bid for and succeeded in snatching the rights for broadcasting LaLiga in the Indian sub-continent. It coughed up $24 million (Rs. 168.2 crore) for three-year rights, which were previously held by Sony Pictures Network (SPN). Incidentally, Facebook’s bid this year was $6 million (Rs. 42 crore) more than the last one by SPN.
But now, Facebook seems to be at a loss, lacking clear vision and strategy. Reports have it that the company has sub-licensed broadcasting rights for television to SPN. SPN, on its part, is actively pushing its sports segment. Having lost out in the auction for LaLiga’s rights, which Facebook won, it has been promoting Serie A in an unprecedented manner. A boost came when Cristiano Ronaldo signed up with Juventus, giving a much-needed impetus to Serie A, which has otherwise remained a low grosser in football for SPN.
This acquisition of LaLiga’s rights and then sub-licensing of the same to the earlier broadcaster forces us to question whether Facebook knows what it’s doing. To watch matches on Facebook, one would need, at the least, a reliable internet connection that facilitates live-streaming at 360p (the maximum standard available currently), a smartphone, and of course, a Facebook account. Though residents of metros and bigger cities in India might access these easily, it is another story in the northeast, where the love for football surpasses that of cricket: this region includes four of the five slowest states when it comes to internet speed, according to Ookla.
Unlike television, Facebook offers no explanatory graphs or analysis either, compelling fans to spend more time on separately catching up on these details.
But perhaps the biggest fail was Facebook’s refusal to let users cast matches on to a bigger screen. Though watching them on the phone while on the move would be a welcome change for many, it is hard to imagine people willing to give up their television screens for the phone while in the comforts of their home.
Facebook turned to SPN presumably to make up for its overlooks. But what’s the need to jump into a business that it can’t handle? It had no idea, or maybe it didn’t prepare itself for, the market it had enthusiastically jumped into. Simply because it has resources at its disposal doesn’t give it, or anyone, the right to play around and disrupt industries, risking entire businesses.