One of the biggest advantages television has had over the Web has been its dominance of live events, mostly sporting events like baseball, football and basketball, but also one-offs like concerts and political debates. Those programs are often tagged as being “DVR proof” by network executives.
But a new blackout-free effort by Major League baseball, a quiet push by major Web video player Hulu and longer running efforts like CBS Sports March Madness On Demand are beginning to test the online waters for live events.
While MLB has had a well-received and profitable online service through its MLB.TV package since 2002, for the 2009 playoffs, it launched a separate service, Postseason.TV. The $9.95 service (free for Apple iPhone users that purchased the MLB application earlier this season) streams 10 live cameras from every playoff game, letting users choose how to watch them.
The Postseason.TV service seems to be working for Major League Baseball Advanced media. According to Paidcontent.org, MLBAM served an average of 350,000 streams for each of the playoff games in the four division series matchups. 36,000 of those streams were on iPhones or iPod Touch devices
Postseason.TV was a breakthrough because unlike the regular season service, which blacks out local games, the playoff package is blackout free thanks to deals carved out with Fox Sports and Turner Sports, the postseason rights holders (though the New York Yankees and San Diego Padres began testing in-market streaming services in the middle of the season).
“Our goals overlap and our efforts to try and please our fans overlap, the only thing that doesn’t necessarily overlap is our long term economic parameters,” says Bob Bowman, president and CEO of Major League Baseball Advanced Media. “They say in any marriage if everyone gives 80% it can work, and so that is what I think we were able to fashion out, everyone got enough to be happy with it.”
Bowman says the idea was to create something that would even encourage tune in through the added features, or serve as a way to check in on the game if you absolutely cannot be in front of a TV.
While MLB has relied on its subscription model, one of CBS’ biggest live streaming efforts, March Madness On Demand, is entirely ad supported. In 2009 March Madness On Demand garnered $30 million for the company, chump change when compared to the larger CBS revenue pie ($3 billion in Q2 2009), but up from $23 million the year before.
“It was a subscription product the first three years, at its peak it was [bringing in] hundreds of thousands of dollars,” said CBSSports.com Senior VP and General Manager Jason Kint.
But much of that revenue comes from larger deals advertisers make with the network, including placement on the television coverage, though Kint noted that CBSSports.com sells its own ad inventory to fill commercial pods online, separate from the network.
Meanwhile, Hulu, the JV video site from NBC Universal, News Corp. and Disney, has been experimenting with presenting ad supported live content such as concerts, most recently with live coverage from the Austin City Limits music festival October 2-4.
The problem for Hulu, which is still trying to turn a profit on its library content, is that live coverage costs more in bandwidth and resources than a program stored on its servers, making it even more challenging to make money.
With many events happening while people are at work and cannot be in front of the television, there is a market to be reached, executives agree, but how big that market may be is still a mystery to the companies trying to reach them. And with sports and its complicated rights agreements the top draw for those watching live online, creating deals that are palatable to the rights holders and the content creators can be challenging.
“The hard part is how do content publishers, who often overlap in terms of rights and goals, fashion the deals in the backend, in order to make the product in the front end available to the customers,” says Bowman.
In the case of Postseason.TV, MLB decided not to make the produced feed available to users, instead letting them serve as their own directors by choosing which camera angle to watch the game from.
“Before, if [viewers] couldn’t watch their live event, football game, baseball game, American Idol, whatever it may be, they timeshifted it and skipped through commercials, or they ignored it completely,” Bowman says.“[I]n the end [live streaming] is clearly going to add eyeballs to content, and dramatically drive up the number of people who are able to and will watch live events.”
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