“Ask people what’s important to them and they’ll say ‘family, God and their team,’ and not necessarily in that order.” That truism, offered up by Keith Ritter, vice president of business development at the National Hockey League, is one of the reasons service providers have turned to sports as one of the most effective content genres for differentiating their services.
From the ESPN Mobile launch to the NHL’s Center Ice video-on-demand package, sports and communications are teaming up in greater numbers than ever before, driven by a proliferation of new digital media platforms. Those new platforms — such as video-enabled mobile handsets, the iPod, high-definition on-demand television service, IPTV and online portals — represent new, more customizable access to the fan for teams and broadcasters like CBS Sports, ESPN and Fox Sports.
And sports fans are likely to take advantage of such access. In fact, so loyal are they, that offering content about their teams or events can help a service provider win new and retain existing customers. Tom Murphy, vice president of marketing at Sprint Nextel Corp., says Sprint’s sponsorship of one of NASCAR’s top events, the Nextel Cup, has brought many new subscribers to the carrier. “The NASCAR Nextel fan base is 40 million fans,” he notes. “They are big users of media and will consume all types of information on NASCAR in any medium ... and they’re willing to pay for it.”
The digital sports demographic is an attractive one for carriers, trending to 18-to-35-year-old males, with disposable income, who are very tech-savvy. “They are early adopters and will use the new platforms,” says Ritter. “The challenge is making sure you’re in all the places they want you to be.”
“The [users of] emerging platforms are typically a little younger than our traditional core demo,” says Brian Grey, general manager of FoxSports.com, which offers scores, news, data, game tracking and updates, along with 200 highlights and clips per week packaged and sent out to mobile partners, which include Cingular Wireless, MobiTV Inc. and Verizon Wireless. For video programming, it works with Comcast Communications Inc.’s broadband division on a strategic online offering, and with MSN.com for an exclusive sports channel.
“When you look at what happened with the World Cup, it becomes clear that interest in consuming sports information cuts across demographics and gender during special windows throughout the year that open up sports to a mass market beyond your everyday fans,” Grey continues. “For carriers, that represents a programming and event window that they can take advantage of to get their products and services out to a wider audience.”
And Murphy of Sprint says that NASCAR users are more likely to stay with Sprint longer and spend more on data, and the consumption of data is just larger for sports fans in general. “That’s because of the large amount of dynamic, real-time information sporting events generate,” he adds.
This value proposition was highlighted when the 2006 FIFA World Cup soccer tourney — easily the biggest sporting event on the planet with billions of viewers worldwide — went digital for the first time with the availability of mobile highlights, text message alerts, Web access and alternate video access to information about the games. The World Cup occurs every four years, and soccer fans wait in anticipation to see their national team battle it out on the field. It becomes more than a game; it becomes a matter of national pride, somewhat like a wildly popular, single-sport Olympics. Thus, the event’s match-up with new media was a big success.
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Around 45,000 people used Avaya Inc.’s purpose-built converged network to receive real-time info about the event on their laptops, PCs, cell phones and PDAs, driving a surge of billable data traffic on operator networks. The World Cup itself also made text-messaged news available — visitors to the official Web site only had to enter their country and phone number to receive SMS blurbs, a virtual windfall for carriers who were able to charge for the messages. Individual operators also rolled out their own services: Vodafone Netherlands offered a multimedia messaging Goal Alert service, for instance. And Europe’s first HDTV media company, Euro1080, supported a wide range of HD programming around the World Cup tournament on its channel HD2.
“Service providers need to reduce churn and increase ARPU, and if a feature is not a significant ARPU increase, they wouldn’t be interested, especially if a service eats up a lot of capacity on the network,” says Gerry Kaufhold, an analyst at In-Stat. “But text message services drive traffic and pay-per-use revenue — the SMS vote for the MVP of the game during the NBA Finals is an example. And video content can generate some other billable events.”
He also notes the opportunity for new monetization models, such as a prepaid package for mobile sports video. “If you charge $69.95 for access to all that content for six months, there’s only one billing cycle and the carrier gets paid upfront,” he says. “It also reduces churn. People are unlikely to change carriers if they just paid that much for the NFL package.”
The home page of CBS SportsLine.com, a unit of CBS Digital Media |
Another big success in pairing sports and new media was the NCAA Tournament, at least it was for CBS. So says Larry Kramer, president of CBS Digital Media, which offered podcasts of NCAA highlights and has strategic relationships with Verizon Wireless and Cingular Wireless. Cingular offered the MEdia Net NCAA March Madness Portal this spring, providing personalized access to tournament information, including video highlights branded as “Cingular at the Half” from CBS Sports, two-minute, twice-daily video clips covering all 64 games, top tournament news stories, score updates and individual team tracking capabilities for all 65 teams. Another portal exclusive was the Cingular Bracket Challenge!, which gave users the power to make, track and manage their tournament bracket from their wireless handset. The service complemented CBS’s online approach. Fans who filled out information on CBS SportsLine.com got game updates and score tracking for their leagues with regular text message alerts throughout each round of the NCAA Tournament. CBS had 15 million live streams initiated, along with 5 million looks at archived material.
Next-generation television is one digital platform that certainly can benefit from sports content. Service provider Global Triad Inc. is using broadband wireless to set up service for communities that were once cable-dependent, and is using content, especially sports content, as a differentiator. “We are trying to find niche markets, such as people interested in sports that aren’t getting enough exposure, like the [American Basketball Association, an alternative to the NBA], or volleyball,” says Jon Grinter, president of Information Architects, which offers media production capabilities and runs several wireless and satellite communications companies, including Global Triad. “A lot of viewers are starved for something different. We are doing this cost effectively by recruiting amateur film students and local broadcasters, telling them to shoot anything they can, and we’ll give them a percentage.”
Other players in the hypercompetitive television market also are banking on sports to help them stand out in a market where there are no greenfield customers. Beginning this fall, British Telecom plc broadband customers equipped with a new Home Hub set-top box will be able to watch 32 digital television channels, with DVR capability and streamed video on demand, as part of the BT Vision next-gen television service. BT has won the rights to carry 242 on-demand FA Premier League soccer matches per season. The matches generally will be available from 10 p.m. on kick-off day for a period of 50 hours; the three-year deal covers the 2007-8, 2008-9 and 2009-10 seasons. The near-exclusive rights (it won them in a joint bid with satellite player BSkyB) may make BT Vision the go-to TV service for the overwhelming number of rabid soccer fans in Britain.
In other sports action, TiVo Inc. in June launched TiVoCast, which delivers broadband Internet video directly to the television sets of the 400,000 TiVo subscribers. The offering includes content from the National Basketball Association and Women’s National Basketball Association. Fans have access to NBA and WNBA video showcases during the season, along with a special Finals Showcase video package highlighting the greatest finals moments in NBA history. The content will be offered for free, but TiVo and its partners will have the ability to integrate advertising.
“Television is still the preferred platform for watching video,” says Tara Maitra, TiVo’s vice president and general manager of content services. However, “the TiVoCast service captures mainstream and specialty-based content on the Web, delivering programming that is not otherwise available through the TV today and providing a wide variety of choice that will be of interest to [various] segments of the TV audience. The TiVoCast service provides niche networks and broadband content suppliers, for which the economics of television distribution might not make sense, a way to connect with audiences in the living room.”
Happily for service providers looking to set themselves apart with content, the teams, leagues and broadcasters want service providers to help them make the most of the digital opportunities. “Off-portal opportunities are there, but when you’re inside the walled garden, there’s an element of being a trusted service with editorial oversight that people are more willing to visit,” says Phil Sharpe, senior vice president of technology at Turner Sports Interactive, which runs the digital distribution of NASCAR and the PGA. “And in terms of presentment, being carrierdelivered represents a less clunky experience.”
Ritter says working with a service provider affords the opportunity to be higher up on the radar screen. “There are lots of sports, and not a lot of shelf space, so you have to fight for dominance,” he notes.
The NHL offers news and information via its Web site, and makes available 20-minute versions of games and expanded highlight packages on iTunes. But it also has deals with Bell Canada, Rogers Communications Inc. and TELUS to distribute NHL video ringtones and text alerts in Canada, with mobile video goal alerts on the road map. In the United States, Sprint is its partner. “Hockey fans are underserved in the United States by traditional media,” says Ritter. “Our primary goal is to be front and center with our fan base. We also want to grow the game. Our loyal fans came back incredibly fast after we took last year off, but we really need to introduce the game to a wider audience. Hockey is the best game on earth, very compelling, plus people should discover what great guys our players are.”
Consumer demand for sports services is driven most obviously by the fact that people can’t always be in a position to watch a game. “You have geographically dispersed games, schools, leagues and fans, so it’s hard to program it so everyone can see it,” says CBS’s Kramer. “The highest time of need to do this is during the day, when people are at work and can’t get to a TV.”
Sports is also an ongoing enterprise. “The two immediate content genres are news and sports,” says Ritter. “But there’s a plethora of live news all the time, and you can dip in and see what’s going on via a range of media. But in sports it’s easy to miss things. The Stanley Cup Finals, Game 7, there was only one place and time to see that.” All that real-time information with a short shelf life means the genre benefits from anytime, anywhere access. “I watched a draft pick on my mobile with three screaming kids in the Suburban while my wife was shopping,” Murphy noted at the recent GLOBALCOMM show.
For more video-related news this month, read our On the Tube eBook, which features a profile of Telkonet Inc.'s NuVisions dedicated wireless network that is offering IPTV service and other triple-play services in the NYC area.
Content Assists
Top entertainment brands are testing out alternative distribution, looking to connect with fans, boost ratings, drive loyalty and integrate new revenue streams through advertising and merchandising. The byproduct of this is a fan experience that is becoming personalized and always-on.
“One of the beauties of IP-delivered content is the dynamic nature of the presentation layer,” says Phil Sharpe, senior vice president of technology at Turner Sports Interactive, which runs the digital distribution of NASCAR and the PGA. “There is a unique opportunity for people to select their own path. People will go to great lengths to find what they want.” To capitalize on this idea, Turner is looking at launching a sports portal that aggregates its team partners. “We become a broker for them, and do their graphics and editorial production. We capture an event at the highest quality, then format [it] for different platforms,” says Sharpe. “If all the platforms complement each other, you end up with a personalized bubble of entertainment that people can carry around with them. We’re not there yet; right now what’s happening is simple repurposing — but that will change.”
A unique challenge for the genre is slicing and dicing the information, given the mass-market appeal of sports. “You may have 10 categories of sports, how do you give each what they want, without confusing them with what the other nine categories want?” Sharpe says.
Digital distribution can solve part of that problem by offering a way for fans to customize what they see and hear. “Sports is a premier content genre because every fan has his or her own team,” says Brian Grey, general manager of FoxSports.com. “As the platforms mature, you can personalize the feed, information and analysis leading up to and following the game. Extend that to all the other distribution channels and there’s an opportunity for even more personalization.”
Yet extending the brand to new platforms is also a challenge, requiring significant investment and carrying some risk. For instance, while the ESPN Mobile cellular service launched to great fanfare on Super Bowl Sunday and is the most perfect union to date of sports and communications, the Wall Street Journal recently reported that the brand faces dismal uptake rates and financial mayhem, and is going back to the drawing board to salvage what it can. ESPN is the top dog in a crowded sports broadcasting market, so the news that the venture has not gone well has made some take notice. “You can lose a lot of money before you make it back,” says Larry Kramer, president of CBS Digital Media. “New distribution is changing the business models.”
Thus, many providers are in a learning curve. “Everyone is learning and trying new things for monetization,” adds Sharpe. “In the ad-supported world, there’s far more accountability. In any interactive experience, you click to interact with it and those are hard numbers you can take back to the advertisers. So we have the traditional ad-supported models, then charge transactional costs where it makes sense.” NASCAR.com provides access to animated, real-time versions of races and other fun content for free, and has experienced no gating factors to uptake due to advertising. A subscription-based model, on the other hand, beyond standard service provider access rates, has been shown to cut down on alternate media usage.
Beyond revenue, content guys also are concerned about cannibalizing traditional lines of business. “You cannot take the same content you get on TV and just offer it in a different format,” says Kramer. “There has to be a more complementary strategy than that.”
“[Digital distribution] is another marketing tool, and one that can be justified if it’s rolled out correctly,” says Gerry Kaufhold, analyst at In-Stat. “Its advertising actually pays for itself. And, it turns out the Internet and mobile video can be used as a way to tease people back to the TV set, by having content that’s not the same as broadcast, but offers enough to get people intrigued.”
While Internet offerings and basic mobile alerts and clips are the chief distribution methods sports content providers have embraced to date, more sophisticated services are on the way. “We are just at the beginning of a huge opportunity,” says Kramer. “A lot of devices haven’t even been invented yet, like video screens that roll up to go. The e-commerce possibility offers a lot of opportunity, and there’s potential for advertisers to do a lot more. We’re talking to everyone about the possibilities.”
The NHL plans to take the Center Ice package, which lets people watch out-of-market games, now available via digital cable and satellite, and port it to IPTV. “We’re also interested in portable media devices and video on demand,” says Keith Ritter, vice president of business development at the National Hockey League. “The interactivity aspects of these new technologies is something we’re very interested in down the road. However, for some of it, it’s the theory of the penguins. When the penguins line up on the ice shelf to go fishing, the first one dives in the water and the others wait. If he doesn’t get eaten by a polar bear, the second one dives in. We generally want to be the second penguin.”
Ultimately, the goal is to supplement each distribution platform with the others, for one, seamless, customizable, entertainment bubble. “You want to provide the means of engaging in the event when there is no other way,” says Sharpe, “but if you’re at home, you can enhance the experience. No one has cracked that yet; how to expand coverage where everything builds on each other. We’re all still experimenting.”
| Links |
| Avaya Inc. www.avaya.com Bell Canada www.bell.ca British Telecom plc www.bt.com BSkyB www.sky.com CBS SportsLine.com Inc. www.cbs.sportsline.com Cingular Wireless www.cingular.com ESPN www.espn.go.com FIFA World Cup www.fifaworldcup.yahoo.com Fox Sports Interactive Media LLC www.foxsports.com Global Triad Inc. www.globaltriad.net Information Architects www.ia.com In-Stat www.instat.com iTunes www.itunes.com MobiTV Inc. www.mobitv.com NASCAR www.nascar.com National Basketball Association (NBA) www.nba.com National Hockey League (NHL) www.nhl.com National Collegiate Athletic Association (NCAA) www.ncaa.org Rogers Communications Inc. www.rogers.com Sprint-Nextel Corp. www.sprint-nextel.com TELUS www.telus.com Professional Golf Association (PGA) www.pga.com TiVo Inc. www.tivo.com Turner Sports Interactive Inc. www.turner.com Verizon Wireless www.verizonwireless.com Vodafone Netherlands www.vodafone.nl |
