Battle for College Sports Fans

ESPNU, CSTV deploy a variety of media platforms
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Two digital cable networks, ESPNU and College Sports Television (CSTV),
are battling for college sports fans. The key to victory may be a multimedia
strategy. “The old-media-company approach to a TV network is: We tell the
viewer what we want them to watch and when,” says CSTV President/CEO Brian
Bedol. “ESPN found a lot of success with that model. The new-media approach
makes a transition from TV as mass media to personalized programming. Our focus
is to give fans what they want when they want it.”

With 1,000 universities and more than 150,000 college sporting events
each year, Bedol says, viewers have specific interests: “A Princeton lacrosse
fan isn't going to watch Ohio State football as a good substitute.”

CSTV REACH

The two-year-old CSTV is available in more than 20 million homes,
although many have access only through a digital pay tier of sports networks.
Bedol is targeting both students and alumni to increase market share. To expand
its reach, this week, CSTV gets its biggest Internet showcase yet: The NCAA
men's basketball tournament tips off March 17.

College hoop fans who crave out-of-market games can pay $19.95 to watch
them over the Internet. CSTV will also have special offers with Comcast,
Charter, AOL and Roadrunner to knock $5 off the price for broadband
subscribers.

The streaming video available during March Madness is a small sliver of
CSTV offerings during the year. CSTV streams audio and/or video for more than
5,000 events each year, from volleyball to football, charging $6.95 per month
or $49.95 a year.

Game Tracker Live, an Internet tool that delivers real-time statistical
updates, is available for an additional 13,000 live events. All those events
beef up the channel's bottom line: “The online-ad business is fantastic
right now,” says Bedol. He won't reveal specifics, but online ads and
subscription fees account for more than half of CSTV's total revenues. Kagan
Media estimates companywide revenues at $23.7 million in 2004.

Adi Kishore, Yankee Group media and entertainment-strategies analyst,
says a broadband component is more important for CSTV and ESPNU than for other
networks. “Broadband video viewing is driven by news and sports and
bite-sized content,” he explains. “Colleges are now wired for
broadband.”

But CSTV doesn't have a monopoly.

ESPNU, ESPN's recently launched network dedicated to college sports,
will operate out of ESPN Regional Television (ERT), located in Charlotte, N.C.
ERT produces more than 740 college sports events each year, so folding its
operation into ESPNU's is a strong fit. In the first year, that means about
300 live events (including regular-season and NCAA championships) ranging from
Division I football to volleyball to lacrosse.

One advantage that CSTV has over ESPNU: more than 180 schools already
signed on as affiliates. Major universities Notre Dame, Penn State and North
Carolina are in the fold, and the network helps those schools market and sell
online subscriptions. The network televises more than 30 men's and women's
sports for such conferences as the ACC, Big Ten, Pac-10 and West Coast. In
addition, Conference USA and Mountain West, for example, offer full audio
streams of dozens of games while other conferences or teams have video clips or
just audio feeds.

“We're looking to connect our fans across many technologies,” says
Bedol, “and our affiliates want to do that, too.”

CSTV's online advantage may be short-lived. ESPNU hopes to roll out a
dedicated Web site with college athletic news and information within the next
month. It already owns the rights to games for major conferences, like the Big
10 and Big East. Says ESPNU VP/GM Burke Magnus: “If it's not on ESPN, ESPN2
or ESPNU, it'll be on ESPN360.com or ESPN.com. We're not going to take the
direct-to-school approach of CSTV. We have tons of conference rights and
schools for the game programming we can maximize online.”

ONLINE INVENTORY

It's also getting easier for networks like CSTV and ESPNU to gain
access to game video without having to deploy their own production crews. With
some conferences mandating instant replay for certain sports, game videos shot
by the schools and conferences would be available for streaming. Another way is
to enhance the Jumbotron feed sent to stadium scoreboards. ESPN360 has already
done that. “It's not terribly expensive to roll a production truck in and
enhance those feeds,” Magnus says. “And it creates something that is very
beneficial to fans online.”

To extend reach, an ESPN-branded cellular service is also set to launch
in the third quarter, at a price still to be determined. Magnus envisions
phones tailored to different universities, with fight song ring tones and other
branding options. For now, however, he says he is “focused on what we bring
to the table—ESPN's muscle and name recognition—as opposed to doing
something defensive and in response to the competition.”

Dean Bonham, sports marketing executive and chairman/CEO of the Bonham
Group, believes streaming doesn't compete with TV: “It's a huge revenue
stream in the future for sports and entertainment, for everything from
cellphones to laptops.”

It isn't only the national networks that are contemplating
next-generation delivery of sports information. WRAL Raleigh, N.C.'s
cellphone service (B&C, Dec. 20, 2004)
has added sports scores to its subscription service that allows viewers to
track local universities like Duke, North Carolina and Wake Forest as they
advance through the NCAA tournament. (It debuted last week with ACC tournament
coverage.) Scores for games are updated every few minutes.

Says Sam Matheny, VP/GM of DTV Plus, a subsidiary of WRAL parent Capitol
Broadcasting. “We didn't want to re-create what ESPN or a national network
does, but this is a great way to build our local-news product.”

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