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April 16, 2009

The Biz Beat

Give it Away, Give it Away Now

by Shawn Hoffman

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Through a number of technological and legal means, [MLB has] tried like crazy to maintain control over what their customers consume. They've failed, like most entities not named De Beers. The result is a huge base of "Open Source" MLB entertainment... Open source has provided MLB with an entirely new engine for generating fan interest, one they could not have developed on their own.
-Gary Huckabay, BP 2009

There was a time when MLB not only embraced "open source," but they actually subsidized it. For decades, teams paid for the local reporters' travel expenses, until the papers became too uncomfortable with the arrangement. The owners fully understood the value of the press-it was by far the cheapest form of advertising they could find, and probably the most effective. Besides, as long as the reporters were being housed and fed by the team, the owners could always count on positive coverage.

Even in the old days, however, MLB was always apprehensive about new media technologies. It took years for the sport to embrace radio and television, since they figured no one would come to the games if they could watch or listen at home. Nowadays, it's not so much the technology that has MLB spooked, but the culture. Through MLB Advanced Media, baseball has developed some fantastic digital products, and though BAM has done very well financially, it has failed to leverage the open source community outside of a few specific cases (such as Pitch f/x). MLB.com is still very much a closed environment, leaving an army of enthusiastic bloggers and developers on the outside looking in.

That strategy has been a clear case of lose-lose: fans are missing out on some very cool possibilities, while MLB and BAM are leaving money on the table. It doesn't have to be this way, and there are a number of things that MLB can do to open up, none of which have to be overly complex. Some options:

Make videos embeddable...

I might sound like a broken record by now, but this is by far the easiest way for MLB to better engage its fan base. 'Ubiquity' is a word thrown around a lot by internet types, but it should be every media company's goal in this age of infinite competition. By not allowing other publishers to embed their videos, MLB isn't protecting its content, it's just decreasing the amount of eyeballs that will see it.

Imagine if blogs and local newspaper sites (which soon enough will just be called "local sites") could embed highlights and interviews. How many publishers-especially those that follow a specific team-wouldn't take advantage of that? By not allowing it, MLB is losing countless hours of free advertising. Not to mention that it's also throwing away millions of dollars in direct revenue, assuming that BAM could sell pre-roll advertising on even a fraction of those embedded videos.

...including MLB.tv.

This one will take even more convincing. If embedding press conferences and highlight videos makes the suits nervous, you can imagine what kind of response syndicating actual games would receive. It actually makes almost too much sense, though, because to watch MLB.tv, you'll need to subscribe to the service, regardless of whether it's on MLB.com, nytimes.com, or freecreditreport.com. So MLB should be doing whatever it can to increase its distribution, just like HBO does on cable. Why not let DRaysBay "broadcast" Rays games, if it will draw more attention to the product?

Instead, baseball has used the old-school approach, pushing its product only through its own properties: game broadcasts, MLB.com, MLB Network, and so on. It's not mentioned nearly much as it could be in the blogosphere, let alone in newspapers, because it's not accessible beyond those proprietary channels. By allowing MLB.tv to be embedded on other sites, MLB could outsource millions of dollars worth of marketing, and at virtually no cost.

While we're at it, let's make everything else embeddable too.

Stats, scores, standings, schedules, rosters, fantasy tools, I could go on and on.

This might seem counter-intuitive, because if a blog can embed all of these things, why would anyone need to go to MLB.com? Well, for the same reason that people go to YouTube: when you see a site's brand all over the web, you know where you can go the next time you need a specific piece of information. By offering these tools to other publishers, MLB.com could see a nice boost in traffic on top of the free brand exposure.

On a more philosophical level, anything MLB does to improve the quality of baseball blogs will help the sport's bottom line in the long run. After all, these are the modern day newspapers; if MLB can help these publishers improve their products-at no cost, mind you-it would be helping itself, as well.

Become even more mobile and social.

BAM absolutely nailed it on the iPhone. I've had At Bat 2009 for about two weeks, and it's already indispensable. Remember when we didn't have Gameday Audio on our phones? I try not to.

If you don't have an iPhone or iPod Touch, you're not totally out of luck. BAM has made Gameday Audio available on most of the high-end BlackBerrys, as well as any Windows Mobile phone and a few lower-end models from Sprint and AT&T. The problem is, not that many people know that these options even exist. There are a lot of high school and college students that would love to pay $10 to have every baseball game live on their phones, but they first have to be made aware.

Adding some social capabilities to the existing apps might be a good start. It can be as simple as letting people leave comments on a game using their Facebook or Twitter accounts. The comments would show up on those users' activity streams (with some sort of hash tag), which would help build further conversations around the games, while also promoting the mobile audio product (@injuryexpert is probably tweeting this right now).

In the end, all of these strategies lead to the same place: customers being referred to baseball through friends, bloggers, Twitterers, and thousands of other people who aren't being paid by MLB. It would also help BAM increase traffic and revenue immediately, which would make their SEO juice skyrocket, and their ad inventory could grow tenfold overnight. Considering that it would cost virtually nothing, this seems like a rather obvious strategy.

Shawn Hoffman is an author of Baseball Prospectus. 
Click here to see Shawn's other articles. You can contact Shawn by clicking here

Related Content:  MLB,  Mlb The Show,  MLB Gameday,  Mlb.tv,  Mlb.com

19 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

Bob

Could someone please tell me what BAM is?

Thanks.

Apr 16, 2009 10:31 AM
rating: 1
 
eighteen

Baseball Advanced Media L.P. , the MLB holding company that operates MLB.com.

Apr 16, 2009 11:38 AM
rating: 2
 
Bob

Thanks!

Apr 16, 2009 12:39 PM
rating: 0
 
lpiklor

I discovered the MLB Extra Innings APP for my IPhone last week and you're right - it's indispensable. I live in Chicago and was able to catch last nights Giants / Dodgers game that I otherwise would not have paid any attention to and there were others that I COULD have listened to if I'd wanted. It also surprises me how quickly they get the video highlights up for viewing.

Now if they can just fix the Cubs audio so I can listen during my commute...

Apr 16, 2009 10:33 AM
rating: 0
 
adecker31

YES! I'm going nuts not being able to listen to Pat & (HOF) Ron.

Otherwise, the APP is pretty awesome. To listen to Vin Scully and etc. is a real unexpected pleasure on my walks.

Apr 16, 2009 21:14 PM
rating: 0
 
chico123

If blackouts are possible with embedded video, then MLB.tv should consider going free after their agreement with InDemand has ended. No need to upset your biggest partners. It would also give them time to build up their sales staff and further enhance the product. But without blackouts, transiting to an open MLB.tv would diminish territorial rights and franchise values.

Apr 16, 2009 10:55 AM
rating: 0
 
leez34

You are my favorite BP contributor. Keep up the great work - and keep it coming at your blog as well!

Apr 16, 2009 11:33 AM
rating: 1
 
BP staff member Shawn Hoffman
BP staff

Thanks leez. You are now my favorite commenter.

Apr 16, 2009 12:12 PM
 
BP staff member Dave Pease
BP staff
(2)

There's a lot of love here.

Apr 16, 2009 12:15 PM
 
jesseatcal

I'm not in high school or college, but how do I get gameday audio on my blackberry?

Apr 16, 2009 12:38 PM
rating: 1
 
BP staff member Shawn Hoffman
BP staff

http://mlb.mlb.com/mobile/audio.jsp

Apr 16, 2009 13:20 PM
 
keeperleaguegm

Great article. Embedding video is the easiest way to virally promote MLB...hope they recognize that soon.

Apr 16, 2009 12:40 PM
rating: 0
 
medialint

I agree about MLB at Bat on the iPhone. It's a great app. I also agree they haven't marketed it right: I found out about it through the App-A-Day column in the San Francisco Chronicle.

Apr 16, 2009 14:37 PM
rating: 0
 
eighteen

If history is any guide, MLB will fight these new technologies tooth and nail, eventually succumb to them, make a ton of money from them, wonder how they got along without them - and fight the next technology advance tooth and nail.

Apr 16, 2009 14:52 PM
rating: 2
 
iris79

does anyone know if the app for iphone works interntionally..like new zealand?

Apr 17, 2009 01:03 AM
rating: 0
 
Keith Law
(13)

I don't see anything in here that supports the argument that opening up the content will increase revenues. BAM has a pretty nice revenue base right now from subscriptions, and the online ad market is very weak right now so the ad-supported model is unlikely to provide the same revenues. Where's the evidence that, for example, "anything MLB does to improve the quality of baseball blogs will help the sport's bottom line in the long run?"

Apr 17, 2009 06:55 AM
rating: 0
 
BP staff member Shawn Hoffman
BP staff

Keith -- the subscription models don't change here. You still have to pay for MLB.tv, for audio, etc. The difference is in how it's marketed. Embeds drive traffic and brand exposure -- you can look at Youtube, Scribd, etc, these sites were built off of embeds. The difference between them and MLB.com is that MLB actually sells things, on top of advertising. If BAM increases traffic, and exposure to all of these products that most people don't even know about, that would have an immediate impact revenue-wise.

Apr 17, 2009 07:45 AM
 
Keith Law
(13)

What exactly is Youtube's revenue model? I understand that they were bought for a significant sum, but if there's a decent revenue model there I missed it.

What you need to demonstrate to argue that allowing embedding of videos (and thus freeing some of the content for which MLB.com currently charges, like archived footage) is going to benefit MLBAM in the long run is that there is going to be some significant upsell from the embedding. What percentage of users who click through the embedded video will purchase the subscription product? Are there comparable models with other sites that offer subscription products (video or other media)? Without that, this is just speculative.

Apr 17, 2009 08:55 AM
rating: 0
 
Fresh Hops

The whole media industry is based on speculation right now. The subscription model is popular because calculating to opportunity costs associated with it is very difficult.

But I don't think your really giving the argument here a fair shake. Let me try to work something out....

According to a friend of mine who works in internet advertising, MLB could charge an advertiser $1.50 per 10,000 views of an embedded video that included a 5 second spot for the advertiser that the beginning of the video. So, if Sony wanted to advertise the PS3 at the beginning of a video in a very short spot--something short enough that no one is going to thing twice about embedding the vid because of an intrusive ad--MLB could charge Sony $150 dollars if that video received 1M views. Now, if you go and let people embed that for you, you increase distribution of that little add by what, an order of magnitude? I'm smelling profit.

I'm pretty sure a subscription model is the way to go for content at the level of MLB.tv, but at the level of 30 second clips, I think MLBAM has an untapped revenue source that's also free advertising.

Apr 17, 2009 09:52 AM
rating: 1
 
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