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Pete Toms Article Archive
Written by Pete Toms   
Monday, 11 January 2010 13:34

Last Week in Bizball by Pete Toms

Last year was the first in which MLB made live in-market games available over the internet.  MLB implemented a strategy in NYC (Yankees only) and San Diego which allows fans to subscribe to the in-market live streaming product with the caveat that they must also be a subscriber to the local cable provider’s TV and internet services.  (The local cable provider which carries the channel or RSN that broadcasts the games)  The deal was structured to protect the interests of MLBAM (which controls digital rights for all MLB franchises) plus existing local/regional TV partners and cable, who all share in the revenues.  At the time the deals were announced, MLB COO Bob DuPuy stated that a “majority” of franchises were expected to have similar deals in place during the 2010 season.  However, little to nothing appears to have transpired since the Padres deal was announced.  Speculation is that many RSNs and cable (both if you are Comcast) remain reticent to adopt MLB’s live in-market streaming template.  As well, the debate over whether live in-market streaming is best exploited as a complement - as opposed to an alternative - to the TV broadcast remains unresolved.  Last week saw a prominent consumers rights group exerting pressure on the federal government to outlaw the practice of limiting access to internet content to subscribers of cable TV.  MLB’s template for providing live in-market streaming of games is not a target per se, but it could be impacted by the controversy surrounding the “TV Everywhere” strategy formulated by a coalition of the cable, satellite and phone industries.

MLBAM was at the forefront of the geo-blocking technology that “blacks out” live local games to subscribers of their enormously successful MLB.TV “out of market” product.  The same technology allowed NBCU to stream Olympic competitions live over the web without compromising the value of the rights to other IOC broadcast partners.  Michael Hiestand of USA Today counted the introduction of geo-blocking technology amongst his “Top 10 innovations and trends” in sports media for the decade just ended:

Live sports online: The advent of broadband made watching sports online more more-viewer friendly.

But it was technology that limited what online users could access that really paved the way for the proliferation of live online sports. The problem with showing live sports online had been that it would be a party crasher interfering with leagues' more lucrative TV deals. But geo-tracking, which uses consumers' Internet addresses to block online content geographically, opened up new online possibilities. MLB games could be blacked-out online in regions where they appeared on TV, but then appear online nationally. National TV networks could show live Olympic action in their own countries without creating havoc with exclusive national TV deals around the globe.

LWIB, The Biz of Baseball’s Maury Brown included live in-market streaming amongst his crystal ball predictions for 2010.  Maury predicts that more clubs will adopt the model in use by the Yankees and Padres, but cautions that they are not necessarily enamoured with the proposition:

More In-Market Streaming – Last year, it was announced that (for a price) you would be able to get around that nasty blackout restriction and catch games online: in-market game streaming with an assist from MLB Advanced Media. It started with the Yankees and then went to the Padres. With MLB president and COO Bob DuPuy and MLBAM CEO Bob Bowman saying that this model would be expanding in the future, it seems a near given that this year there will be more. But, given how the lion’s share of revenues from the in-market deals goes to MLBAM, some clubs may go into launches more apprehensive than you might think.

Select Read More to see the rest of this article on in-market streaming of games online

 

Last month, John Ourand reported for The SportsBusiness Journal that Comcast SportsNet is now streaming 76ers games over CSNPhilly.com.  (Comcast is also owner of the 76ers)

 

The regional sports network, which so far has resisted being part of MLB Advanced Media’s streaming effort for baseball, is using a business model that is significantly different from the one that signed up 6,000 users last season in New York.

First, the 76ers games will be available on one Web site: CSNPhilly.com. In MLBAM’s streaming deal with YES Network, Yankees games were streamed to three sites: the MLB-operated Yankees.com, YESNetwork.com and Cablevision’s OptimumOnline.com.

Second, the streaming service is available to any CSN Philadelphia subscriber, regardless of whether they use Comcast’s Internet service. MLBAM’s deal in New York is available only to customers who subscribe to both television and broadband from Cablevision.

During the 2008 season, MLBAM and Comcast attempted unsuccessfully to reach agreement on streaming live in-market Cubs and White Sox games for subscribers to CSN Chicago.    Negotiations reportedly broke down over whether the games would be available on MLB.com or the CSN Chicago website.

Conversely, Comcast was publicly criticized last week by the Portland Trail Blazers for their refusal to stream in-market games.  CSN Northwest will televise 60 Blazers’ games this season, with most of the balance available on the local NBC affiliate (KGW).  The KGW broadcasts are streamed live over blazers.com (for a fee) but none of the CSN Northwest broadcasts are streamed live over the web.  The live in-market streaming issue is particularly important to the Blazers because CSN Northwest is not available to DirecTV and Dish Network subscribers in the region.  Whether or not the Blazers and CSN Northwest have an agreement to stream in-market games is a matter of difference between the two parties.  Mike Rogoway reported last week in The Oregonian:

Cable economics consultant Hal Singer,….said cable networks are looking to establish a leading position in the lucrative business of sports broadcasting.

Because cable operators control the infrastructure that delivers the games, Singer said the Blazers and other teams have a strong incentive to do business with their local cable operators -- even if that shuts out some fans.

AND

The team said last fall it hoped to put cable games online in 2010 as an alternative for customers who don't have access to Comcast SportsNet.

Comcast is experimenting with video streaming NBA games in other markets, but does not have any interest in making the games available to viewers who aren't already Comcast customers, according to Fitzpatrick, the network spokesman.

Only four (Yankees, Padres, 76ers and, in a limited fashion, the Blazers) franchises in the “stick and ball” leagues have adopted live in-market streaming of their games.  All, save for the Blazers, make the games available only to cable subscribers (Cablevision, Cox and Comcast).  Is this approach consistent with the much hyped and controversial “TV Everywhere” strategy of the cable, phone and satellite providers?  Last week saw “TV Everywhere”  under attack.  Will regulators allow MLB to limit access to live in-market streaming of games to cable customers?  Last week, Cecilia Kang wrote for The Washington Post:

Free Press and other public advocacy groups are sending letters Monday to the Justice Department and the Federal Trade Commission calling for a probe of the "TV Everywhere" plan by cable, satellite and phone companies that brings television shows and movies to computers and devices, but only for those that subscribe to both television and high-speed Internet services.

Marvin Ammori, a law professor at the University of Nebraska and senior adviser to the aforementioned Free Press wrote last week on his blog:

Spearheaded by Comcast and Time Warner Cable, the TV Everywhere initiative appears to be built on cable operators (and other distributors) agreeing to work together to pressure content providers to make their content available on the Internet only to viewers that have paid for a cable TV subscription in addition to an Internet connection.

AND

….TV Everywhere also appears to set a term in the negotiations between distributors and programmers — requiring, for one thing, that programmers keep content off the Internet unless a viewer subscribes also to cable TV.

Will MLB meet with increasing pressure from their RSN partners (many owned wholly or in part by their franchises) for greater access to, and control over, digital rights as they compete with the emerging local ESPN.coms?  In November, John Ourand reported for The Sports Business Journal on Comcast’s response to ESPN’s entry into local media.

Comcast is responding to ESPN’s move to launch local Web sites by beefing up its news operations at five of the company’s regional sports networks.

Comcast is interviewing reporters and editors to staff its online news operations in Chicago, San Francisco and Washington. Its executives are using the same template in these markets that they used in Boston, where Comcast spent millions of dollars earlier this fall to launch a news operation from scratch.

AND

The implications for Comcast are significant. In markets where it operates regional sports networks, Comcast does not want to cede local sports news to a national entity like ESPN. RSNs believe they have a competitive advantage thanks to the local relationships they have developed with the teams and their fans.

“In the short term, these moves are about protecting existing businesses,” Grilly said. (Note, Eric Grilly is executive vice president and chief digital officer for Comcast Sports Group)  “But without having a strong digital play, our overall business could be siphoned off.”

Will control of local digital rights eventually be decided by The Supreme Court in “American Needle”?  Last year MSG abandoned a two year long legal battle with the NHL over control of the New York Rangers local digital rights.  The NHL (like MLB) controls the local digital rights of all its franchises but MSG argued that the league was operating as an illegal cartel and violating antitrust provisions.  If the NFL is deemed a “single entity” in “American Needle” owners in all the stick and ball leagues might be left with no legal recourse in battling for control over local digital rights.

As the 2010 season approaches, sales this spring of the Yankees in-market live streaming product will be closely monitored.  If the Yankees, coming off a World Series championship in the best baseball market in the world, can’t sell MLB’s in-market streaming model there is likely little hope that any of the other 29 franchises will fare better.  If sales flounder (6,000 subscriptions were sold last season, however the product was launched mid season) it will be difficult to persuade others to follow.


Pete Toms is an author for the Business of Sports Network, most notably, The Biz of Baseball. He looks forward to your comments and can be contacted through The Biz of Baseball.

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