The entertainment industry is stuck on a highway to hell, with no exits or rest stops. Or at least that’s what its higher-ups would have you believe.
It is certainly true that the industry is changing, from a business where everything is proprietary to a more open system where content is free. This is only bad if you happen to support an oligopolistic culture of content distribution. With all sorts of barriers to entry falling, we are headed toward a world where anybody can make videos, write articles, or record songs, and the best of each will be consumed the most. And yes, almost all of it will be free, or very nearly so.
In this world, sports will assume an even larger role than it does now (and already is beginning to, in terms of advertising dollars). Costly-to-produce live events will be the last bastion of strength for old world mass media companies. This includes concerts, theater, and, of course, sporting events. But sports have another ace up their sleeve as well: time-sensitive television. Whereas DVR is killing advertising revenue for regular shows, it is propelling sports, which are largely considered TiVo-proof.
This is a complete about-face from a decade ago, when NBC was abandoning all of its major sports programming, save for the Olympics. Sports are now more coveted than ever, as advertisers flock to major events, including the Super Bowl, Final Four, and (believe it or not) the World Series.
This bodes well for the leagues, of course, and not just in the realm of traditional television broadcasts. As Major League Baseball has shown, selling the rights to watch live games on the internet can create significant amounts of new revenue. Advertising on this medium will only become that much more valuable as it gains popularity.
Breaking with its past stodgy history, MLB has led the sporting world in online business for several years now. MLB Advanced Media, which runs MLB.com along with several other projects, brings in hundreds of millions of dollars annually, several times that of Facebook and YouTube combined (although to be fair, neither is a true e-commerce site).
But with all that said, MLB.com still needs improvement. Its interface is a bit convoluted, and the site can be slow at times, but these are really only small issues. The bigger area of concern should be the site’s openness, or lack there of.
MLB.com’s subscription services do not end with live games. Instead, users have to pay for archived games, condensed games, classic games, classic video highlights, and classic radio calls, among other items I’m probably missing. Even after you’ve subscribed, it still costs extra to actually download any of these clips to your hard drive.
While a number of people must be paying for these non-live items (or else they would already be free), MLB.com is missing a tremendous opportunity. Major League Baseball has an incredibly extensive video archive that it mostly just sits on. One of my main gripes about the sport’s marketing over the years is that it rarely utilizes one of the game’s greatest assets: its history.
Now imagine MLB.com as an open, interactive site, where users can add and share audio and video clips, and MLB itself supplies much of the content. MLB.tv remains proprietary, while everything else (particularly Baseball’s Best) is opened up and expanded. That video library, which is currently locked away and collecting dust, would be essentially given to the public.
If this sounds like YouTube for baseball, you’re on the right track. The difference is that there would be one supreme supplier among millions of smaller ones. And not only could MLB provide an ungodly amount of content, much of it would be high quality as well.
The obvious negative aspect for MLBAM’s balance sheet is that it loses any direct revenue that has come from those subscription fees. People at MLB Productions might tell you that opening up the video archive could lead to that wing quickly becoming obsolete.
Both of these concerns are very real, but not overly critical. However costly those effects might be, there is no chance that it offsets the potential positive impact. This plan wouldn’t just increase the site’s revenues, or extend its lead amongst sports leagues in the digital realm. If applied correctly, it could actually make MLB.com a true internet powerhouse, very quickly.
The problem with most “Web 2.0” sites is monetization. Facebook gets billions of page views, but hasn’t yet been able to convert them into mega-company revenues. Comparatively, MLB.com offers a well below par user experience, but can get away with it due to the saleability of its products (i.e. merchandise, tickets, MLB.tv, and the like).
What MLB is failing to realize is that people are less and less willing to pay for taped video content, but more eager than ever to watch clips online. By distributing as much of their video collection as possible, MLB could virtually flood the internet with baseball footage. In a world where all companies are desperately vying for consumer attention, this strategy could have an incredible impact not only on MLB.com’s advertising revenue and top line, but also on the sport’s popularity around the world.
The world is rapidly moving toward open systems, and free content. Monolithic movie studios and music labels have some legitimate reasons to be concerned, but Major League Baseball (and other major sport leagues, for that matter) should be embracing this paradigm shift. Their core products are live events and merchandise, neither of which can be digitally duplicated. All of their other tools, including the moth-ridden video archive, should be used to market these goods.
The hundreds of millions of dollars in advertising revenues will just be the cherry on top.
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com
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