It’s time for MLB Advanced Media to admit that MLB.com is seriously behind the eight ball.
This isn’t a very popular viewpoint, particularly since many have already anointed the site a magnificent success for the thirty clubs. But while other big media companies are rapidly opening up their sites, MLB.com continues to hold much of its content behind a pay-wall.
As we’ve discussed before, digital media is undergoing an unstoppable shift towards free and open distribution. All of the major television networks, as well as numerous cable stations, have made full episodes of their shows freely available online, with limited commercials. Even the major music labels, after years of filing lawsuits and persecuting many of their own costumers, finally appear ready to accept an ad-supported model of distribution.
Toward this end, very few traditional media outlets still offer premium services online. Increased competition for eyeballs, improved monetization of ads, better social marketing devices, and the ease of piracy have fundamentally changed the economics of media distribution: consumers are now less willing to pay for recorded or written content, while advertisers are increasingly looking to spend more on the web.
Sports leagues should have a very special place in this new climate, since their core products are either time sensitive or cannot be digitally reproduced. Teams can sell tickets, merchandise, advertising space, broadcasting rights, viewing rights (through MLB Extra Innings and MLB.tv), and concessions without having to worry about DVR devices and P2P file sharing. In fact, advertisers are already plunging significantly more dollars into sports broadcasts, including this past year’s World Series.
Once a sporting event is over, though, the footage instantly becomes commoditized, competing against thousands of other media sources, both online and off.
Which brings us back to MLB.com. Much like it does in other areas, Major League Baseball is simply wielding its monopolistic power, forcing users to pay for archived games, condensed games, historical footage, and original documentaries, that aren’t available anywhere else. There’s nothing particularly wrong with acting like a monopoly when you are, in fact, a legal monopoly. But due to this approach, MLB Advanced Media is almost certainly leaving money on the table.
MLBAM CEO Bob Bowman might counter that the site’s revenues continue to grow, as does its premium subscriber base. And the site does feature a decent amount of free video, including highlights and game recaps during the season.
But while these are certainly valid points, opening up would lead MLB.com down an even more prosperous road. As we mentioned last time, MLB has another ace up their sleeve that hasn’t been put to great use: the massive video archive that sits lamely in New York City, which MLBAM could easily dip into.
Imagine a free, open platform, featuring thousands of historical baseball clips that had previously been locked away. Users would be able to post their own videos, and the entire library would be embeddable. Going even further, MLBAM could make a strategic technology acquisition or two, perhaps targeting a video service that would allow users to edit, cut, and remix existing clips.
This plan would enable MLB to flood the web with baseball footage, undoubtedly boosting traffic on MLB.com, and very likely having a halo effect on sales in more essential areas (tickets, merchandise, advertising, etc.).
Guy Kawasaki, a technology venture capitalist and popular blogger, notes that the most important work has already been done. ÒThe cost of recording this content is ÔsunkÕ–that is, itÕs already bought and paid for,” he said. “You could try nickle-and-dime maximization to sell it, but the big picture is to make baseball more popular. To do that, I would spread it far, wide, and freeÑand thank the fans for doing so.Ó
The irony in all of this is that MLB.com’s greatest utility has always been as a marketing tool for tickets and merchandise. Gains in these core items have allowed MLB to double their top line figure from just eight years ago, a remarkable achievement for what was once considered a struggling, old-world business.
MLBAM has certainly contributed to this growth. Depending on the source, Advanced Media pulled in between $400-450 million in 2007. But the great majority of that income comes from advertising, MLB.tv, outsourcing services (BAM develops and manages sites for other sports leagues, and even entertainers), and merchandise. In other words, opening up Baseball’s Best (which contains historical clips), MLB.com’s original content, archived games, and condensed games would result in such a small hit that the ensuing gains in advertising revenue would likely dwarf any initial setback.
Even more importantly, though, is that MLB would create an incredible presence on the web, fueling further growth in their core businesses, as well as MLB.tv.
Keep in mind, MLB is blind to these issues because they can be. Revenue from new media is still considered a cherry on top, and MLBAM’s leadership is so focused on boosting their top line in the here-and-now that they can’t see how one step back could lead to two giant steps forward.
Eventually, MLB.com will have to switch to a more open model in order to remain relevant. The real question is, will it do so as the leader of the pack, or as a disgruntled reactionary? Time will tell, but I hope it is the former.
Feedback? Write a comment, or e-mail the author at shawn(AT)squawkingbaseball.com
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