Friday, June 01, 2007

The latest must toy for boys (who love sports) a Slingbox

Monday night the SportsBusinessNews.com gang faced an interesting dilemma. SBN’s favorite sports franchise (our beloved Boston Red Sox) were opening up a home stand with Curt Schilling facing the Cleveland Indians. Meanwhile the Ottawa Senators (SBN is based in Ottawa) were scheduled to meet the Anaheim Ducks in game one of the Stanley Cup finals. What to do, what to do? The latest toy for boys who love their sports and can’t get enough offered the perfect solution. On the big screen TV the Red Sox. Streaming on one of SBN’s laptop computers the Senators/Ducks game – visa-vie a must have to sports fans who can’t get enough, an even more important device for sports fans and those in the industry who travel – something called a Slingbox.

Founded in 2004, Sling Media, Inc. is a different kind of consumer electronics company - one that's working to demystify convergence technologies and to create empowering experiences for the digital media consumer. The focus of Sling Media is to embrace - not replace - existing products and standards by enhancing them with hardware and software that make divergent technologies compatible and greatly improve the consumer experience. Because, after all, can't we all just get along?!

Sling Media's first product, the Slingbox™, has literally transformed the way we are to able watch TV. The Slingbox turns any Internet-connected PC, Mac, or mobile device into your home television. That means you can watch TV virtually anywhere in the world.

Sling Media's innovative software, SlingPlayer™, is a software application that connects users to their Slingbox and allows remote control of the video source device. This is available for additional computers and devices, including Macintosh-based systems.

And the genesis for the Slingbox should come as no surprise, a pair of baseball loving brothers. Sling Media was founded by brothers Blake and Jason Krikorian, and Bhupen Shah. Together, the founders have more than 45 years of experience defining and developing media "convergence" products for companies such as General Magic, Philips Electronics, Microsoft, Samsung, Toshiba, Hitachi and Dazzle Multimedia (There may have also been a few summer jobs manning the drive-through window as well, but that’s neither here nor there).
The Slingbox™ product vision came during the 2002 baseball season when the San Francisco Giants were in the middle of their World Series Championship hunt. Blake and Jason, being San Francisco natives, were disappointed that they were not always able to see the Giants in action while traveling (this didn’t stop them from bringing foam finger carry-ons, however). So after some experimentation with various commercial products, they quickly realized nothing available in the consumer market could do what they wanted, which was to watch their own TV while they were not at home. They pooled their collective expertise with Bhupen, and the resulting development became a small refrigerator sized Slingbox (although storing beer in it was inadvisable, as trial and error soon proved). But over several months the box began to shrink and the video quality got better. Much better.

That doesn’t mean the Slingbox has been embraced by sports leagues. Major League Baseball offers their Extra Innings out of market games both through many cable and satellite providers. MLB also sells their Extra Innings package online. Consumers can purchase both packages for two different prices. The National Hockey League late out of the gate with live internet streaming now offers their Center Ice package online and through cable and satellite operators. Like MLB the NHL currently offers their out of market games as two separate packages. NBA’s Season Pass is the sole out of market sports package that combines cable/satellite packages with an opportunity to view games online. The NFL’s Sunday Ticket offered on DirecTV is the biggest revenue generating out of market sports package. The NFL protects its TV partners religiously and one of the safeguards the NFL has built into their current agreements blocks internet streaming of their games on the Internet.

The Hollywood Reporter’s Eriq Gardner offered a look at how sports league’s are looking at the Slingbox and the impact its having on their ability to sell and market their out of market packages.

"I'm no longer with the league and can't speak on its behalf, but the threatening part about Slingbox is it allows (viewers) to circumvent geographical boundaries written into broadcast rights deals," said George Kliavkoff, who was vp business development at MLBAM before becoming chief digital officer at NBC last year. "And if a league can't protect the rights they (sell), that doesn't bode well for future contracts when they want to resell the rights at higher margins."

According to the Hollywood Reporter report MLB Advance Media met with Slingbox officials regarding payment of a licensing fee for the televising of live MLB games.

"Maybe they should be paying us," Sling Media CEO Blake Krikorian told Sports Business Journal. "Seriously. I'm still failing to see how we're hurting them or their brand. We're allowing more people to see more baseball, with all the same commercials, and stay connected to their teams. How is that bad? It's additive to what they're doing. They've paid for our device and they've paid their cable bill."

Krikorian told the Hollywood Reporter he believes the root of the problem with MLBAM lies in MLBAM feeling threatened that the device may compete with online ventures.

"It's incredibly important to understand there are two different players, MLB and MLBAM; they have different objectives," Krikorian said. "One of the things that a Slingbox does is it gives more value to consumers who purchase MLB Extra Innings from DirecTV or their cable company. If I want to watch a San Francisco Giants game and live in Los Angeles, Sling isn't going to help me unless I sign up for MLB Extra Innings. So what Slingbox does is it helps the existing broadcast business model. I think the league understands this and if there's been any pushback, it's coming from one place -- MLBAM."

Michael Mellis, senior vp and general counsel of MLBAM told the Hollywood Reporter they’re prepared to look at all of their options concerning the Slingbox and the impact the technology might have on MLBAM’s ability to market their online out of market packages.

"Of course, what they are doing is not legal," he said. "We and other leagues have formed a group to study the issue and plan our response. A lot depends on ongoing discussions. Plus, there's no guarantee that Slingbox will be around next year. It's a startup."

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. MLBAM has become a revenue generating opportunity baseball officials aren’t likely to ignore. But Mellis thought that “there's no guarantee that Slingbox will be around next year. It's a startup." is nothing more than wishful thinking on his part. The Slingbox is here to stay and offers sports fans a great opportunity to enjoy the ability to watch games online.

"You can see both sides of the issue," Rick Karcher, director of the Center for Law and Sports at the Florida Coastal School of Law told The Hollywood Reporter. "Should Slingbox be treated as a broadcaster or a company that sells a piece of hardware? The rules on fair use are far from clear, and technology is making it difficult to draw a line in the sand."

If any sport needs to embrace as many opportunities to promote their products it’s the National Hockey League. Brian Jaquet Slingbox’s Director or Public Relations told SportsBusinessNews.com the hockey world continues to take advantage of the opportunity having a Slingbox offers those inside and outside of the hockey industry.

“It has been adopted by a number of sports teams, especially hockey teams. Steve Yzerman just mentioned it the other night as he was with the Canadian team in Russia recently and kept up on the playoffs (Yzerman’s Red Wings where in the NHL playoffs at the same time Yzerman served as general manager for Team Canada) using his Slingbox.

“Ron Wilson and Tim Hunter of the Sharks use it both on the road (to check other games from the confines of their hotel rooms) and at home on the bench, using a tablet PC in the middle of the game to check replays, configurations, etc.”

Former NHL’er Gary Galley worked with Hockey Night in Canada as their analyst during the New Jersey Devils – Tampa Bay Lightening first round Stanley Cup series. Galley a 17-year NHL veteran co-hosts the afternoon drive program on Ottawa’s Team 1200 (the Ottawa Senators radio rights holder). Galley needed to follow the Senators – Pittsburgh Penguins first round series and knew he couldn’t count on finding Versus the NHL’s national cable partner when he was in Tampa and New Jersey covering the Devils/Lightening series. Even if Galley found Versus there was every possibility he’d be forced to watch another of the first round series offered by Versus. Galley wasn’t prepared to take that risk and decided it was time to invest in a Slingbox. Galley wouldn’t have been able to do his job if it wasn’t for a Slingbox. That’s what makes the Slingbox an essential part of every sports industry/fans life. You want to follow your team wherever you are – as long as you have a Slingbox, the software downloaded to your computer a broadband connection you’re set. And with Fathers Day around the corner – the Slingbox makes for a great Fathers Day gift.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The Hollywood Reporter

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