Once again, the National Hockey League proves how to get it wrong
Wednesday the National Hockey League became the last of the so-called four major North American sports leagues to announce plans to video stream their games on the Internet. The Internet represented a tremendous opportunity for a league with as many displaced fans as the National Hockey League has. The NHL remains a sport with a tremendous following in Canada, but largely a sport with a regional based following in the United States. The NHL remains popular in the American Northeast, and the American Midwest two key population areas. The NHL has little if any following in many more population centers, the American Southwest (despite having four franchises located in that geographical region), the Pacific Northwest, and many other areas in America. For a sports property so desperately in need of exposure in those and other markets, offering games on the Internet is a tremendous move forward, but not if it serves to insult common decency.
MLB.com is the Mercedes-Benz of sport league websites. Managed by Bob Bowman, MLB.com began in 2000 when each MLB team agreed to invest $1 million each in creating a presence on the Internet. 2006 is the fifth consecutive season MLB has offered live video streaming of their games at MLB.com, a program that began with the 2002 season. Arguably, MLB.com’s biggest success to date was the streaming of the NCAA men’s basketball tournament in March.
At least for Major League Baseball, MLB.com has evolved from an interesting concept, to a loss leader, to a profitable venture. A March Wall Street Journal report on the dollars and cents of the MLB.com said about 15% of the site's total revenue of $195 million last year came from managing Web sites and other partnerships like the one with CBS. An additional $68 million came from subscriptions to watch live video content on MLB.com, including the 2,400 baseball games it streamed in the 2005 season. The rest of its revenue comes from ticket sales and advertising. How good has MLB interactive become at what they do, good enough that they’ve been able to market their services to other sports leagues, properties and events.
Under the leadership of Bob Bowman, MLB’s interactive division has already signed up 25 clients, including CBS, Major League Soccer and the World Championship Sports Network. Entertainers Jimmy Buffett and LL Cool J, too, have hired MLB.com to promote albums and concerts by streaming video of interviews and live performances.
"They are one of the few operating in this space," says Larry Kramer, president of digital media for CBS. "And the important thing was they were in the off-season, so we knew they could also dedicate the time."
It’s easy to understand why Major League Baseball works as well as it does on the Internet. Teams play 162 games; displaced fans want to be able to follow their team on a nightly basis, irregardless of where they are.
"I really needed some way to see Yankees games," says Robert Auld, a transportation analyst with Henry Schein Inc., a New York medical-supply distributor. "I'm on the road a lot and I take my laptop with me just about everywhere I go. And with a hectic schedule, I figured my best option was subscribing to baseball's video service."
According to a report at Globesports.com when baseball considered taking MLB Advanced Media public in late 2004, four U.S. investment banks valued the company at between $2-billion and $2.5-billion. Thanks to the rapidly rising popularity of Internet video, that valuation has risen to between $4-billion and $5-billion since, the league says.
MLB.com offers the entire Major League Baseball schedule video streamed live on the Internet at a cost of $79 for the entire season (Grapefruit and Cactus League games included) or $14.95 per month. MLB Extra Innings package is priced from $129 for the season (Time Warner Cable).
The NBA launched NBA LEAGUE PASS Broadband, on January 23, 2006. The NBA offered an innovative plan, leveraging NBA LEAGUE PASS, the league's regular season digital cable and satellite television package. The NBA offered the broadband package as an added value component to their full season subscribers. The league launched NBA LEAGUE PASS Broadband which coincides with the start of the NBA LEAGUE PASS Half-Season package, offering the product for $109 for the remainder of the regular season.
"Working hand-in-hand with our NBA LEAGUE PASS cable and satellite providers, NBA LEAGUE PASS Broadband is another great way for subscribers to experience the excitement of live NBA games throughout the season," said Gregg Winik, Executive Vice President, NBA Entertainment. "As an added value, the new service is the perfect complement to any NBA LEAGUE PASS subscription and no longer requires subscribers to be at their television set to access their NBA LEAGUE PASS service."
The NBA regards the streaming video as an opportunity to leverage their ‘season ticket’ package. If the NFL used
The National Basketball Association relaunched their Internet video streaming package this week in conjunction with the start of the NBA season Tuesday. David Stern and company decided to follow the packaging they had developed last year, offering the opportunity to access the leagues games on the Internet as an added value component to those who purchase NBA League Pass. The cost of NBA League Pass for the 2006-07 NBA season is $199. NBA LEAGUE PASS Broadband on NBA.com is not available as a stand alone purchase, or on a game by game basis. The games are all being streamed live on the Internet again as an added value component to those buying the leagues full season digital and satellite packages.
"NBA.com has been the definitive destination for basketball fans around the world to stay on top of the latest news, watch exclusive video, and follow their favorite teams and players" said Steve Grimes, Vice President of Interactive Services for NBA Entertainment. "Our new site will further enhance the user experience and allow fans to connect with our game through the latest technology."
The NBA will offer Internet video streaming in select international markets, including China. Beijing, where the 2008 Summer Games will be held, remains the key to the globalization of the NBA.
With new multi-year deals the NBA announced in early August, further positioning NBA.com/China as one of the leading sports destination in China, providing fans in the country with access to a record 87 webcasts of NBA games in Chinese, including live video webcasts of regular season and playoff contents, and complete game replays of select NBA games. Additionally, the comprehensive site entirely in Chinese will feature a series of NBA classic games, hundreds of hours of on-demand broadband video and highlights, an exclusive NBA fantasy game, live stats, blogs, extensive photo galleries, player trackers, interactive forums, chat rooms and more, all throughout the NBA season.
“Renewing our partnership with NuSports and Sohu, two experts in China’s sports Internet landscape, will impart us with more opportunities to connect with our expanding fan base,” said Heidi Ueberroth, President, Global Marketing Partnerships and International Business Operations of NBA Entertainment. “As broadband usage in China continues to grow, NBA.com/China will provide fans with access to more game action and unique broadband features than ever before.”
The National Football League the Cadillac of professional sports leagues; choose an interesting strategy when NFL officials announced their live Internet video streaming package in early September. The NFL wanting to protect the integrity of their $3.75 billion North American television agreements, decided to only offer Internet video streaming of games outside of North America.
The new online subscription service charges fans a fee of $24.99 per week or $249.99 for the entire 17-week NFL regular season and each game will also be available in archived format up to 24 hours after its conclusion.
"We are pleased to offer NFL fans around the world an innovative way to watch NFL games. The NFL is committed to taking advantage of new technologies to bring more value to our fans everywhere and Yahoo!'s proven leadership in technology makes them an ideal partner for a product like 'Game Pass',” said Brian Rolapp, the NFL’s vice president of media strategy.
“We are proud to help the NFL deliver the world’s most exciting sport to the millions of football fans outside the U.S.,” said David Katz, head of sports and studios for Yahoo!. “The global reach and promotional strength of the Yahoo! network enables us to deliver this first-of-its-kind product to NFL fans around the world.”
NFL’s Sunday Ticket, the American satellite package is sold at a cost $239 for the season. Rogers Digital has the rights to market the NFL Sunday Ticket package in Canada. Canadian consumers may have the best deal anywhere. At a cost of $26.95 per month, sports fans in the Frozen North have access to the NHL, NFL, MLB and most of ESPN’s college baseball and football “Game Plan” packages. What costs American sports fans more than $1,000 annually, costs Canadian sports fans $325 annually.
ESPN’s Game Plan college football package that features more than 250 games is also available on the Internet. The package is sold for $129.00 for the year, and can also be purchased as a weekend subscription for $21.95, which will include all games through the following Saturday. Fans will also have the option to purchase a half-season online-exclusive subscription for $79.00. ESPN will also bring fans an ESPN GamePlan package for Bowl games, sold separately, late in the season.
“The passion surrounding college football seems to grow each year,” said Matt Murphy, senior vice president, digital video distribution. “ESPN is giving fans a deeper, more extensive connection to the games, whenever and wherever they want to watch.”
Added Tanya VanCourt, vice president and general manager, broadband and interactive television, “In today’s sports landscape live online content delivered via broadband connections is a fast-growing part of a sports fan’s expectations. We’re dedicated to meeting those expectations."
Throughout the 2005-06 NHL season each teams ice surface included “Thank you fans” emblazoned at each blue line (there are two on an NHL ice surface). Most teams offered discounted tickets in welcoming back fans. One of the major problems the NHL had to attempt to overcome being shown the door by ESPN. Hat in hand, the Sisters of the Poor went to Versus (the network formerly known as OLN, the Outdoor Life Network) a network that on the best of days hockey fans need a treasure map, a compass and a great deal of luck if they’re going to watch a game on cable TV in the United States.
All one needs to do is compare what the NHL is doing on the Internet, and realize how nonsensical those who manage the NHL can be. Who in their right mind would believe offering games on the Internet on a delay basis, and charging for those games is a good public relations decision. Consider the following options sports fans have can select:
National Football League – NFL Sunday Ticket, $239 for the season. Games are not available on the Internet in North America. Outside of North America games are offered live on the Internet at a cost of $24.99 per week or $249.99 for the entire 17-week NFL regular season.
Major League Baseball – Extra Innings. Available at $129 for the season (Time Warner digital cable). MLB.com streams all games live on the Internet at a cost of $79 for the season or $14.95 per month.
National Basketball Association – League Pass. Available at a cost of $199, and includes live video Internet streaming. Live Internet video streaming of games is not available without purchase of the league package. Games are streamed on the Internet outside of North America
NCAA – March Madness. Available at no cost to the consumer (the 2006 event). No plans have been announced for the 2007 event.
NCAA Game Plan (ESPN Football). Available both online, and on ESPN. The online package was sold for $129.00 for the year, and can also be purchased as a weekend subscription for $21.95, which will include all games through the following Saturday. Fans will also have the option to purchase a half-season online-exclusive subscription for $79.00. ESPN will also bring fans an ESPN GamePlan package for Bowl games, sold separately, late in the season.
National Hockey League – Center Ice Package. $229 for the season, the second most expensive complete sports seasonal package being marketed. Games being streamed on the Internet at a cost of $2.99 per game. If a fan wanted to purchase their teams entire 82 game schedule, the cost would $245, greater than the cost of buying the entire NHL Center Ice package.
The NHL deserves all the ridicule and abuse that is heaped upon this junk heap of sports leagues. If the NHL had decided to move forward with a plan to offer games on tape delay, and not charge fans to see the games the plan would have demonstrated a continued commitment to their fans. Instead by offering a plan that is nothing more than a cheap grab at hockey fans wallets the NHL once again proves the league is nothing more than a minor league pretending to be a major sports league.
For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: Buffalo Business First, Globesports.com