June 24, 2009

The Biz Beat

Live Streaming on the iPhone

by Shawn Hoffman

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For sports business and tech nerds, last Wednesday seemed like our equivalent of a man walking on the moon. MLB Advanced Media launched live-game streaming on its MLB At Bat iPhone application, following Apple's long-awaited iPhone 3.0 software update. For the first time, we're now able to watch live baseball on our mobile phones, without any complicated workarounds or external devices. Yes, we are officially in the future.

Before we get into the long-term technological and business implications for MLB, the most important question is this: Does it work? The answer is a resounding yes, and far better than I had thought it would. The video quality on WiFi is astoundingly good, especially at non-peak hours. In fact, I'd say that it actually beats the browser version in terms of skipping and buffering, which is no small feat. I could do without the full-on location check that comes up when you select a game you want to watch-if it would take even a second less to do this in the background, I'd be all for it-but overall the experience on WiFi is about as good as it could conceivably be.

The video quality takes a hit on 3G, but it's actually much better than that of the app's regular highlight videos. That seems somewhat backwards, but it may simply be the way that MLBAM has it configured. I've tried it in a number of different places-Manhattan, Westchester, the 7 train, even at Citi Field, where 3G service is usually jammed-with both the iPhone 3G and the brand new 3G S, and it's passed with flying colors every time. (I haven't had the courage to try it on Edge, but if there are any brave souls that have, let us know how it went in the comments.)

There are some downsides, however. For starters, it eats the iPhone 3G's notoriously weak battery every bit as much as you'd think it would. Not only that, it also made the phone extremely hot after about fifteen minutes, even on WiFi. If you're out of the house and you need your phone to, you know, make phone calls, you might not want to risk draining your battery so quickly. The issue hasn't been quite as bad on the 3G S, and I haven't felt as if it was going to burn through my hand yet, but I still wouldn't expect to take it to the beach and watch a full game unless I had a portable charger with me.

And that is where the business aspects comes in. Despite how worked up we've all become, this is, for the time being, a feature that's much cooler to show your friends than to actually use. Very few people are going to want to watch an entire game on their phone, which even MLBAM CEO Bob Bowman admits. "I think people would watch," Bowman told Silicon Alley Insider in April. "A whole game? Probably not. But ten minutes?"

Ten minutes sounds about right. There's certainly value in that, and all things considered, At Bat is a steal at $9.99. In fact, I will be stunned if the base price isn't higher next year, and I wouldn't be surprised if BAM creates a subscription service for live video and/or audio on top of that (Apple is just now allowing subscriptions within iPhone apps with the new software update).

The problem is, I have no interest in paying $100 per year for streaming games on my phone, like I do religiously for MLB.tv on my computer, and MLB Extra Innings on television. Maybe I'll watch if I'm sitting shotgun during a long road trip, or stuck at a cousin's bar mitzvah. But watching games on the iPhone is a very active experience; holding the phone up becomes annoying very quickly, and it has to be a strain on the eyes for people that have anything less than perfect vision.

Gameday Audio, on the other hand, can be used passively, leaning back, with the phone in your pocket. It's a pleasure to sit on a bus or walk through Manhattan listening to baseball; doing the same with video will get you hit by a cab. So while it may not be as mind-blowing a technology as the video, audio is still At Bat's killer feature.

Will BAM will ever be able to turn At Bat into a major revenue producer? Let's play with some numbers. By late April, At Bat had been downloaded 130,000 times. We'll assume it's now 300,000 total installs-a high-end estimate, though there was probably a good surge this past weekend with all of the press the live video has received. At $9.99 a pop, and subtracting Apple's thirty percent share, that's $2.1 million. Even if that doubles by the end of the season, it's still less than one percent of BAM's expected 2009 revenue-better than nothing, but certainly nowhere near a blockbuster.

The best solution may actually be to promote MLB.tv through the app. As it stands now, the best they can probably do is to continue to offer a limited slate of games, and try to up-sell from there. But since mobile phones aren't such a great platform to watch live baseball on, this strategy seems limited. A better approach would be to expand MLB.tv's capabilities, and create new products that actually leverage the mobile experience. Imagine if you could set up At Bat to notify you, via Apple's push notification, every time one of your fantasy players was at the plate, and you could instantly watch on your phone. Or BAM could integrate Pitch-f/x into MLB.tv, and you could watch all of Johan Santana's fastballs for a given start (this is something I've suggested repeatedly for the browser version, as well).

The key is to make these additional features available only to MLB.tv subscribers. BAM could offer a free trial for three days after you purchase the app, just to whet people's appetites. But once that trial is up, you will have to log in with your MLB.tv credentials in order to use the "premium" features. This could be a good way to turn At Bat into a promotional tool for MLB.tv, and it would also make it feasible to keep the price at $9.99.

Maybe I'll be wrong, and tons of people will enjoy watching full games on their phones. But given the option, people always choose to watch long-form content on the biggest screen possible. The iPhone is a tremendous medium for short-form content on the go, but not for three-hour baseball games. To turn MLB At Bat into a huge money maker, MLB will need to take that into account, and create premium features that fantasy players and baseball professionals won't be able to live without.

In the meantime, keep showing off the live streaming to your iPhone-less friends-it's always good for a few oohs and aahs.

Shawn Hoffman is an author of Baseball Prospectus. 
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