MLB New Media Goons: A study in entrepreneurial success

A few days after we learned that the MLB Extra Innings package will fall exclusively on DirecTV’s lap this year [why haven't we heard anything on DISH?], now comes the news that MLB’s New Media Goons have indeed found ways to supplement the sources of revenue they eliminated on that infamous deal.

From Apple Insider:

Apple Inc. said friday it plans to embrace the 2007 Major League Baseball season by offering highlights for the 2007 season on its ubiquitous iTunes Store, giving fans the ability to catch all the action of their favorite teams anywhere, anytime.

MLB video programming on iTunes will include a daily 25 minute “MLB.com Daily Rewind” highlight show and two weekly “Games of the Week,” featuring full versions of the best games from the National and American Leagues.

Customers will be able to download individual episodes of “MLB.com Daily Rewind” and each “Game of the Week” for $1.99, or purchase a Multi-Pass for a month of Daily Rewind shows for $7.99 or a Season Pass for every “Game of the Week” at just $19.99.

“We’re thrilled to be teaming with iTunes to give baseball fans access to MLB highlights via the world’s most popular online TV store,” said Kenny Gersh, senior vice president, business development of MLB Advanced Media. “We’re excited that baseball fans now have the opportunity to enjoy America’s favorite pastime in a unique way by taking MLB with them on their computers and iPods wherever they go.”

So the season preview was supposed to be free. I’m sure it was; too bad I was too late to the party, and, even though it’s clearly visible on the front page of the iTunes store (first image to the right), it really wasn’t available (second image below).

Whatever the case, I have to think this new entrepreneurial initiative on behalf of baseball has its merits. I dunno if anyone noticed, but last year, Baseball was offering per-game downloads at $3.95 a pop, but now they’ll offer a “Game of the Week” on iTunes for almost $2 dollars less.

But placed in the context of the recent developments, going as far back as last year, when MLB New Media decided to pull podcasts from the iTunes store, it’s a puzzling move.

One thing’s clear; these New Media Goons sure know how to make money.

I’m sure Steve Jobs and Apple had a stronger sense of self than iNDemand and its cable parents. Regardless, the content being offered in iTunes does not, and will not, supplant the experience of watching live baseball in your living room.

This is text-book capitalism, explore new sources of revenue for your already-sold product, maximizing profit to the fullest.

I just don’t see where benefit to the fan…er… consumer, really is.

UPDATE [Sun. 04/01 - 10:20 a.m.] : I had a chance to read Joe Nocera’s Talking Business column in yesterday’s New York Times. Here’s the link, but unfortunately, it’s a TimesSelect column, so you’d have to pay for it (or have an email address with an .edu extension to get it free).

Nocera basically recaps the MLB / DirecTV deal nicely, giving it good light in business terms, but, much like everyone else who opined on this deal, he concludes that it’s a “dumb” move on behalf of Baseball. Yes, he said dumb. I’ll share some passages with you, fellow readers, after the jump.

“What’s the possibility of having a face-to-face meeting in the next 48 hours?” Senator Kerry pressed.

“We’re willing to meet,” Mr. DuPuy said. “We’re certainly willing to meet,” echoed Robert D. Jacobson, who runs In Demand.

And supposedly that’s what they’re doing even as you read this, with baseball season starting tomorrow. Which is not to say there’s a high likelihood of any kind of breakthrough. That would be the smart play. And let’s face it: the men who run baseball have a history of not making the smart play.

[...]

As a result, a huge tug of war has developed between powerful monopolists: the various sports leagues, which want cable to carry their new networks, and the cable companies, which don’t really want them — and certainly don’t want to have to pay exorbitant rates for them.

What does this have to do with the battle over Extra Innings? Oh, everything.

Major League Baseball is way behind the other sports leagues in developing its own channel — the current plan is for the baseball channel to begin operation in 2009. (To give the league a little credit, it has done a terrific job of developing its Internet site.) And seeing the difficulties the N.F.L. and N.B.A. have had getting the cable companies to accept their networks, baseball decided, essentially, to shove its baseball channel down cable’s throat.

[...]

So let’s think about what baseball has done here. In the interest of seeing to it that its baseball channel gets a running start on DirecTV, it has infuriated the cable industry, which is now unlikely to ever give it the time of day. It has turned down the opportunity to be guaranteed an astounding 30 million subscribers on Day 1 because it wants to squeeze the cable industry for more.

“They allowed the cable industry, which is probably the most reviled industry this side of used car dealers, to become the victims in this thing,” said Marc Ganis, president of the Chicago-based SportsCorp. “You have to really screw up to make cable look good.”

Plus, it has alienated 200,000 of its most passionate customers — the ones willing to pay $165 a year to see baseball games every night — taking away from them a fruit they had already tasted. Plus, it has forced those same fans to go to the baseball Web site to see those games — which, however good the site is, still entails scrunching over a screen and looking at a picture that doesn’t compare to say, a flat-screen plasma TV. Plus, it has reminded the world yet again how much sports is just another greedy business — exactly what its customers don’t want to be reminded of. Plus, it’s gotten Congress up in arms.

Nice going, fellas. The N.F.L. would never do anything this dumb. Of course, that’s one of the big differences between pro football and pro baseball. The football guys actually know how to run their business with some intelligence.

There’s so much more good stuff in that column, but, for fear of plagiarizing, I’ll paraprhase.

Nocerna writes that whenever he or anyone in the press talks to baseball officials, they behave and sound like a bunch of misunderstood entrepreneurs. And then, the biggest New Media Goon, Baseball’s President and COO, Robert DuPuy drops this gem:

“We should be applauded,” he said, for making it available in 15 million homes on the day it started. “This is a business judgment,” he added, and baseball had a right to make its own business decisions.

He sighed. “Anytime there is an issue that involves baseball, it has the general effect of attracting the attention of Congress.” He seemed to think that was unfair.

You can’t make that stuff up. Play ball!