February 18, 2010

Squawking Baseball

Non-traditional viewing

by Shawn Hoffman

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We're coming up on a really fascinating period in the history of sports media. At some point in the next five to 10 years, the television industry is going to be staring down the same barrel that the music industry has been looking at for the last decade. Cable in particular is just waiting to get its lunch eaten, as our already-exorbitant monthly rates keep going up thanks to more and more basic-tier channels that we'll never, ever watch. For the major sports leagues (and even some of the non-major ones, for that matter), the options are pretty clear: develop some contingency plans, or risk losing an incredibly large chunk of your revenues.

Thankfully, most of the leagues are now doing just that. The online streaming products that they've put out have improved by leaps and bounds over the past couple years, as have the technologies that surround them-faster broadband, more powerful PCs, and a brand new form factor that could end up being an amazing way to watch baseball. Even ESPN, the ultimate beneficiary of the current cable business model, is getting into the game, rebranding ESPN360 as "ESPN3," and positioning it as a full-blown network.

With all of that on the table, it wouldn't be a surprise if 2010 ends up being the year that SOIP (sports over IP) finally starts gaining critical mass. Let's take a step back, though, and look at why exactly this hasn't happened already. Here are some of the issues that have held SOIP back thus far:

1. Quality and Stability: When MLB.tv first debuted seven years ago, it was far cooler to show your friends than to actually use. The picture was blurry, and it slowed down your computer so much that you were almost thankful when your browser inevitably crashed.

   That's all changed in a big way. MLB.tv is an incredible product now, and it finally became stable enough last year that I actually preferred watching it on a second monitor over watching Extra Innings on my TV. The features are almost ridiculous: watch multiple games at once, see real-time highlights from other games without leaving the game you're watching, get player alerts from around the league, real-time box scores... I could go on. It's amazing, and it's no surprise that all of the other leagues are racing to copy it.

2. Leaning Back vs. Leaning Forward: People don't want to lean forward when they watch sports-or any other type of long-form content for that matter. The reason TV works so well is that we get to lean back, sit comfortably and, if we want, still use our phones or our PCs for other tasks. You could set up a second monitor, which helps alleviate both problems somewhat, but the great majority of people will obviously never do this.

   But what if we could use our TVs to watch MLB.tv-with all of its features-instead of Extra Innings? Despite being close partners with cable providers on both EI and MLB Network, MLB has been pretty aggressive about making MLB.tv available on your big screen, whether it's through Boxee, the Roku box, or some other means. (Expect to see it on the Xbox at some point this year.) And why not? MLBAM gets 100 percent of the revenue from MLB.tv, and only a portion from EI. Considering how much more feature-rich MLB.tv is, this will be an easy choice for the growing number of people who have these setups installed.

3. A Hole in Mobile: Yes, MLB.tv subscribers can watch games on their iPhones or iPod Touches. But as I wrote last summer, this isn't something you will ever use for more than 10 minutes at a time due to the small screen and the fact that you can boil eggs on the phone after you've used it for a while. And yes, laptops are technically mobile devices, but this is the same lean-forward/lean-back problem as before; we've been able to watch games on our laptops for seven years already, and it's never been an optimal solution.

   Of course, this is pretty similar to how people felt about reading books on a PC, which never really worked either. But it wasn't the content that was the problem-it was the technology. When people finally had an excellent device to read on, e-books took off in a huge way. It's hard to say without actually using it first, but it's entirely possible that the iPad will be that device for mobile SOIP. Just look at this, or watch the video. That alone makes me want to shell out the $500. And if it works as well as I think it might, you can bet the other leagues and networks will rush to get their own apps in as well. (Given Disney's close relationship with Steve Jobs and Apple, it's a pretty solid bet that ESPN3 will be on the iPad soon enough regardless.)

Of all the leagues, MLB has put itself in a particularly good position to take advantage of these trends. Unlike the NFL, its streaming prices are very reasonable, its product is outstanding, and they've made it available on a number of different platforms. All of those things will help it battle the next great challenge to sports broadcasting: piracy, which has already become so easy that my dad, who is in his 60s and literally doesn't know how to type, has figured out how to watch Steelers games for free online instead of paying $400 for the TV package. For sports that depend on paid subscription services-such as boxing, and especially UFC-that's got to be terrifying.

But MLB.tv is so good, and so cheap on a per-game basis, that it would be almost stupid notto buy it if you're planning on watching games online. And that's how you win in this space. Don't be surprised if a lot more people discover it this year.

Shawn Hoffman is an author of Baseball Prospectus. 
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