
FastCompany has a story about the huge commercial success of the US Major League Baseball video website. I nearly skipped reading it as I am not a baseball fan and also did not think that video distribution on the web is such a great story to read about. But we had recently the pleasure to look into sports video online distribution as well for a new assignment, so I was primed to read this article. I am glad I did as it unveiled some very interesting news for me. While the US Baseball association is not supposed to be one that by nature links itself to high-tech due to the game itself and also the fact that more middle age and older people like the sport, with this video site they are at the cutting edge. Now here the story in numbers:
- started the project in 2000 with $75 million investment from 30 clubs (each club
put in the equivalent of a yearly salary of one middle infield player) - 2005 revenue: $236 million, 2007 revenue: $450 million
- they now also run the video sites (provide hosting and services) for other US sports organizations such as U.S. Figure Skating Association, Major League Soccer. The videos of an NCCA basketball tournament were shown online through them as well, which drew 17million viewers
- the money comes from a yearly subscription fee of $89, which is cheaper than the yearly cable TV subscription
Now with such success other sports organizations are getting on it as well:
- NBA, works with Turner Broadcasting Systems
- NHL, show game highlights on a YouTube channel (got 20 million viewers) and also have a deal with Slingbox
In Europe they are also slowly getting the hang of it. In Germany, first league soccer club Hannover 96 shows the highlights of their home games 45 min after the match. Also, all their games are archived. They operate with a subscription fee that is available for 3, 6 or 12 months (39 EUR).
After I read this all I think that we will see a new trend here coming up where people will watch more and more archived sports on the web as well. Possibly this could even cut into the premium TV viewing although that might take quite some time still as of now it is additional business. Seeing the above numbers it is obvious that the sports leagues and their associations will over time all move into this possibility. The prime thing that they will watch is that it is an additional business and not one that cuts into their current TV channel sponsorship ad deals, as those are their prime income source, I think. We are just at the beginning of this trend and much more can be done online than just showing archived videos of the games. There will be many more possibilities such as selling Online Ads, taking pictures of fans in the stadium and offering them online for sale, market sports merchandise to name just a few.
It is also clear to me that with such amounts of money at stake they will either do it themselves or work with someone whom they trust because they have the track record such as MLB New Media or large media outlets such as Turner Broadcasting System. Maybe there is some room for innovative very fast-moving new guys as well, probably more so in Europe (e.g. with soccer clubs, handball clubs and their national associations) I think than in the US as there things are already well under way. There is one other big possibility of course that I can think of for newcomers. I will keep that one to myself though but the entrepreneurs out there can read my mind, I am sure...