Univision Selects Google for Bundled Cloud Computing Deal
April 28, 2021
Google has inked an eight-year deal with Spanish-language broadcaster Univision Communications that could exceed $1 billion. Univision chief executive Wade Davis said Google’s offer of benefits on its YouTube video platform and advertising and search services helped close the deal. Microsoft and Amazon have also bundled products in cloud computing deals and lawmakers have expressed concern over the tactic. Google currently faces antitrust suits filed by the Justice Department and several states.
The Wall Street Journal reports Google Cloud chief executive Thomas Kurian noted that, in the case of the Univision deal, it was just “responding to customers needs.” “To say, you can work with us on cloud but not the other platforms, doesn’t make a lot of sense,” he added.
WSJ notes that, “the strategy of bundling products is particularly useful in the media industry where companies are looking for other assets such as machine-learning tools that can recommend videos to viewers.”
As part of the deal, “Univision will consolidate multiple distribution platforms onto Google Cloud, and move some of its important internal business applications to Google … [as well as] adopt Google’s artificial-intelligence tools to develop personalized content recommendations for its customers … expand its use of YouTube and adopt Google’s ad platform.”
Although Google hired Kurian from Oracle to “fast-track growth” of its cloud business, the company “remains a distant fourth to Amazon, Microsoft and Alibaba Group Holding,” according to Gartner. In 2019, Amazon was the leader with a 45 percent market share, with Microsoft at 18 percent and Google at 5 percent, rising from 4 percent in 2018.
Google sales rose 46 percent last year, but it also reported a $5.6 billion operating loss due to “heavy spending on staff and data centers.” FactSet reported that Google is expected to see a 47 percent increase to $4.1. billion in cloud sales in the March quarter.
Last year, Google inked a deal with Activision Blizzard, including cloud for “hosting games as well as YouTube becoming the exclusive streaming partner for live gaming events,” but the Univision deal is a step into the lucrative and growing streaming TV market. Gartner reported that, with streaming TV, “the media industry [turned] into the biggest spender on cloud services, accounting for $12 billion, or 27 percent of total expenditure in 2019.”
In Google’s press release, Univision stated it planned to “expand its global YouTube partnership in the coming years and … integrate with entertainment features on Google Search that help people discover TV shows and movies” as well as use Google Ad Manager for ad decisioning globally, Google’s Dynamic Ad Insertion for PrendeTV and future video-on-demand offerings, and distribute content and services on Google Play across Android phones and tablets, Google TV and other Android TV OS devices.
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