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.
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MLB only needs 700 million reasons to tell you to drop dead
Here we go again. The NY Times reports that Major League Baseball is going to agree to an exclusive deal with DirecTV for the distribution of the Extra Innings package.
That’s right, exclusive.
As if we didn’t feel exclusive enough getting ripped off every year for the right to watch baseball.
But now we, if we so desired, would have to switch our cable or satellite provider to DirecTV in order to get MLB Extra Innings.
I don’t know what’s worse. Paying boatloads of money, or not giving a rat’s ass anymore and just not watching the game.
I also don’t know what’s the whole purpose of these exclusive deals. Sure, you’ll say, it’s the money. Of course, they’re going to get $700 million over seven years as opposed to the $70 million that InDemand – the company that used to distribute Extra Innings – offered to renew its contract.
But who’s actually going to pay for that package? The “millions” of subscribers that are going to switch over to DirecTV?
The NYT reports Extra Innings as having 750,000 subscribers.
Let’s do the math, 750,000 x $129 = 96,750,000. That’s $96 million a year, about $670 mill for seven years. Sketchy math, I know, since I don’t take into consideration the potential DROP in subscribers.
So does DirecTV absorb the cost in hopes of landing many more subscribers? I mean, MLB Extra Innings was available through DTV before this deal, why would it increase the subscriber-base by restricting the distribution channels?
I don’t know, maybe I can get some of those executives that spoke on the DL to the Times to tell me.
What I do know is that there’s a good chance the pricing breakdown for the package could go up for DirecTV subscribers who want the package (a pricey one at that).
Otherwise I’m going to whine and complain, and like our good friend “forager” who tipped this story, cry in my beer.
Oh and not only will I NOT buy the MLB Extra Innings package as I have done for the past three years, because obviously I don’t have DirecTV, but I doubt I’ll buy the MLB.TV service.
I dunno. I certainly wasn’t expecting to be thinking about this in January; I thought I was just going to punch in my credit card in March.
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MLB Ahead in the Technology Curve?
A recent post in my favorite technology blog, engadget.com, dealt with the convergence of Media and baseball.
MLB is upset that a new service, Sling Media, is offering a product (the Slingbox) that will allow you to watch your TV’s signal from anywhere in the world through a PC or a web-enabled phone.
Apparently, they don’t like the fact that folks are catching “free” games on their phones and laptops in local markets were they otherwise would’ve been forced to watch the game on the local TV station, or through the MLB.TV subscription service.
That’s so not how it used to be.
During the 2000 season, I was able to listen to all of the ChiSox’ games through espnradio1000.com’s live web-streaming.
Back then we didn’t have the goodness of MLB Extra Innings or MLB.TV, so I had to use my instincts as a young web wiz (not) to listen to the games through Chicago’s ESPN affiliate.
Well; Bud Selig must’ve been very attuned to the fact that I, and presumably, many others, were consuming a Major League game without technically someone paying for it.
In 2001, the free web-streaming was gone; now I was forced to pay for a radio subscription ($79.99) if I wanted to catch every game live.
Fast forward a few years – eons in Web/technology time – and now I watch most of the Sox games on my desktop.
Baseball also introduced MLB Mosaic this year, which is a (beta) program for Windows that allows you to watch six games all at once.
To be quite honest, I think MLB is using technology to squeeze every penny out of our pockets.
MLB Extra innings for your cable/satellite is $150. MLB.TV can be as much as $100 (not to mention the radio package - $14.95 for the rest of the season).
They also offer the ability to download individual games for $3.95 each.
But Selig and his henchmen have not been able to catch up with the 12-to-6 curve; the technology curve that is.
This year, MLB.TV is only using Windows Media Player; as opposed to offering both WMA and Real Player streams like last year.
It just so happens that Windows dropped support for their media player in Macs and as a result, I’ve had to use a pluggin for Quicktime, Apple’s own media player.
Since I have Quicktime Pro, I am able to save the game file if I’ve watched it on its entirety.
Much like the Slingbox issue, this is something that MLB cannot prevent unless they force a legitimate service or product to stop working simply because MLB Advanced Media executive VP George Kliavkoff wants to tap new sources of revenue.
The services that MLB Media are, in my opinion, great; but if they don’t reconsider their excessive rates, fans will just tune out and resort to the good ol’ box score.
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