Customer Service, Marketing Strategy, Product Thoughts, Sports

Why I love on-demand video from MLB

Anytime, anywhere baseball == cool. Even if it's Tampa Bay/Toronto

The ability to watch live sports anywhere at anytime is just. So. Cool. Ok, you say, “where have you been? Cable and Satellite providers have given us this ability for almost a decade at least. Welcome to the party.”

There are a few ground-breaking things about MLB.tv that demonstrate why Major League Baseball is leading the pack among global sports (and really, entertainment/media providers):

  1. MLB has brought “anywhere-viewing” to the fans, and has created an alternate revenue stream that utilizes reservation pricing (allowing fans who only want to pay a certain amount to still enjoy the game);
  2. Baseball maintains its arcane “local blackout provisions”, intended to protect the local market for each of the 30 MLB teams and ensure that people go to the games;
  3. And most importantly, MLB is slowly cutting out the middleman, and improving its ability to bid for future rights contracts with media titans.

Watch a little bit of more games = more engaged viewers

Let’s break these ideas down – first, that MLB is leading the pack by offering anywhere viewing. You might say that among sports, MLB has the most unused capacity (you know, it’s that weekday series between two bottom-dweller teams in August, but also the fact that each team has to sell out 81 dates at home.) By distributing the viewing among any of the 12-14 games on a given day, baseball can ensure that a fan like me (blacked out from my local market, but given how the Mariners are competing this year …) can follow one of my other favorite teams like the Boston Red Sox or the Philadelphia Phillies. And by allowing me to watch only a few select innings, I can get my baseball fix even if all of the games are done for the day = win.
The best outcome here is that I can watch almost as much baseball as I would ever want to watch for $100 or so – about the same price as two decent tickets to a local game – and add in the cost of an $80 Roku box and I can bring that experience right to my TV or to my computer.

Protect the local market, but make most of the games available.

Probably the thorniest issue around making baseball games available over the Internet is the desire of the local teams to protect their existing pay-TV deals and at-game attendance. MLB has hedged here by making most of the games available to me, while honoring local blackout provisions. (I argue here that making the local team broadcasts available wouldn’t hurt my attendance at games at all – it’s a very different activity to go to a game rather than to watch it on TV – and that I’d happily pay a separate incremental fee ($3/month?) to add the local market.)

Slowly cutting out the middleman

The real elephant in the room when thinking about on-demand sports is the next contract the organization will negotiate with ESPN and the local cable companies. Who will control the dollars? Here’s a modest proposal: make the content available for the people who want it, whereever they want it. Charge a reasonable price and people will pay it. If you need to put up a premium set of features that are even better using a certain device, think about the relative benefit of supporting more users at a lower price point (but offering a standardized offering that can be re-used across multiple channels.)
To give a concrete example, Comcast has about 25m subscribers and about 15m internet subscribers. Assuming that most of their internet subscribers also buy cable services, would Comcast do better offering MLB.tv as a pass-through incremental cost (taking perhaps 40% of the incremental revenue) and by taking a smaller cut of the MLB.tv streams that use Comcast SportsNet feeds? Considering that there are 70m broadband users, Comcast is missing out on a smaller portion of 80% of the market.
Not being close to the process (and just being a fan), I’m not sure if the numbers make sense for the cable providers (but it stands to reason that they do, because otherwise I’m not sure how MLB.tv could exist.) So here’s to hoping that other entertainment and sports producers adopt the same model (Netflix could be a great conduit for newer movies and for live sports, and ESPN has already adopted the same toe-in-the-water approach.) So, NFL? I’m looking at you. GamePass is available in Europe – why not in the USA?
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