Big Games Flowing in Streams

Sports and TV officials tout online, out-of-market fare
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For the first time this season, many National Football League fans living in high-rise, multi-dwelling buildings will be able to watch every bone-crushing tackle and game-winning touchdown through DirecTV's popular NFL Sunday Ticket out-of-market live-game package. Instead of running a coaxial cable from a roof-based satellite dish to their big-screen TVs, though, these fans will hook up a high-speed modem to their laptop computer.

The NFL Sunday Ticket broadband service is the latest attempt by the one of the big four pro sports leagues to play in the live-game streaming arena, as fans are finding more of their favorite sports events on the Web and on mobile devices.

The all-star roster of pro sports properties offering content to portable devices includes nearly every slam dunk LeBron James will make as a Miami Heat star through the National Basketball Association's NBA League Pass Broadband package; virtually every live game during Major League Baseball's September pennant races via the league's MLB.TV service; and all slap shots and goals during the National Hockey League season as part of the league's NHL GameCenter Live offering.

Speedy devices

With faster broadband speeds as well as more viewer-friendly mobile phones and portable devices like the iPad, league package distributors say streaming live sports content provides fans with a viable and alternative way of viewing their favorite sports games beyond the traditional TV set.

"To any league or any property, being able to give direct access, a terrific experience and high streaming quality with the right applications inside the experience is critically important to reach a tremendous amount of displaced fans," says Perry Cooper, senior VP of digital media for the NHL. "[Online streaming] is a great product to cater to that base and also take advantage of what continues to be a classic media convergence."

The major professional leagues have made the majority of their games available to consumers through cable- and satellite-based PPV and VOD out-of-market packages for more than a decade. Only in the past few years have these games been made available to fans via the Web.

"With streaming, [the leagues] are putting markers on various platforms with the assumption that they will grow," says Lee Berke, president of sports consultancy company LHB. "The bulk of viewers are still watching live sports games on traditional linear platforms like cable and broadcast television, but [streaming is] growing and eventually it's going to be a major percentage of how people watch sports, so you have to make your presence felt now."

Indeed, the leagues' migration to the Web with their live sports products follows an overall growth trend of sports fans accessing the Internet for sports information. A record 81 million people in the U.S. on average visited sports Websites each month in 2009, according to Nielsen Media Research.

Drawing crowds

High-profile sports events have attracted huge online audiences in 2010. ESPN3.com's month-long coverage of the World Cup soccer tournament this past June and July was viewed by 7.4 million unique viewers, with watchers generating 942 million minutes of viewing during the tournament-more than two hours per unique viewer, according to ESPN officials.

CBSSports.com March Madness NCAA men's college basketball tournament drew a record 8.3 million unique viewers who watched 11.7 million hours of live hoops during the tournament's three-week run, according to network officials. 

NBCOlympics.com's 17-day coverage of the 2010 Winter Olympics from Vancouver drew 46 million unique viewers and 710 million page views, more than double the total for the 2006 Winter Games, say network officials.

"You're looking at a scenario where people will continue to consume sports content wherever they are," Berke says. "Everybody is anticipating that one or more of these platforms is going to take off in a big way, but in the interim there's audience growth to be had."

To better serve its NFL Sunday Ticket subscribers, DirecTV in 2007 began streaming live NFL games as part of a premium upgrade to subscribers already purchasing its $300 linear Sunday Ticket package, according to Alex Kaplan, senior director of sports marketing at the top U.S. satellite provider. The $99 "supercast" service generated "fairly significant" growth in subscriber usage for the streaming package and delivered incremental revenue for DirecTV and the league, Kaplan says, although he declined to reveal specific figures.

The satellite service will expand its offering this season to include for the first time consumers who can't receive DirecTV due to line-of-sight issues, including those who live in high-rise buildings. It's unclear exactly how many potential consumers this could add to the package's subscriber base, but it certainly represents a major expansion for Sunday Ticket's broadband offerings, according to company officials. Last year, the network conducted a trial offer for residents in Manhattan.

"We saw fairly small take rates last year [for the Manhattan trial] and we don't expect to see it being a major revenue driver-it's just our desire to provide every consumer the opportunity to follow their favorite team," Kaplan says. "But it's a very small piece of the pie."

Not a substitute

Despite the broadband expansion, Kaplan still sees the new NFL Sunday Ticket To-Go as a complement to its linear package and not a substitute for watching the package on television. To illustrate that point, DirecTV has folded the broadband service into the package's $300 price tag for new subscribers, which also includes high-definition telecasts. For existing NFL Sunday Ticket subscribers, the broadband service will cost $50.

"I think there is still room for growth for that percentage of Sunday Ticket subscribers who will use the product on their computers, but our core product is the linear television product," he says. "We certainly don't think our mobile and online versions are going to take the place of that experience. We see it is as a great supplement and enhancement to the existing product."

Other pro sports leagues like the NHL see the broadband package as more of a revenue generator. Along with the live feeds, the online packages often provide more features than traditional television. The NHL's $169 GameCenter Live online game package provides fans with multiple camera angles for one game a night, allows viewers to watch up to four games simultaneously, and offers access to league-wide video highlights as well as repeats of all games throughout the season, according to Cooper.

The league has experienced a 25% increase in subscription sales for the 2009-10 package compared to last season, according to Cooper. "We've have terrific season-over-season growth and we're at the beginning of the product life cycle, so we think there's a lot of upside from a cross-channel perspective for our out-of-market package," he says.

The NBA has also garnered "significant" sales for its 2009-10 NBA League Pass Broadband package, according to Bryan Perez, senior VP and general manager for NBA Digital, although he would not reveal specific figures. The $149 package, which is complimentary for purchasers of the $189 NBA League Pass television package, allows viewers to watch three games simultaneously as well as repeats of any game throughout the regular season.

"The most requested feature of customers who subscribe to the television version is the ability to watch when they travel, and that's what League Pass Broadband serves," Perez says. "It's really a compliment to our existing television product based on feedback we get from the consumer. But it's also a product for people who may only want it when they travel-you can't take your plasma TV with you."

MLB Hits Home Run

Arguably Major League Baseball has been the most successful thus far in pitching its online out-of-market package to consumers. MLB Advance Services' MLB.TV's premium service generated more than 500,000 subscribers during the 2009 season, according to the New York Times. That number is expected to grow as the league has expanded the distribution of the package to Sony's Playstation 3 gaming console as well as to Internet connected set-top maker Roku.

The $129 MLB.TV package allows subscribers to access every out-of-market regular season game as well as the ability to watch three games at a time as well as jump to any half inning of a live or on-demand game, according to the league.

Executives say as broadband penetration continues to expand - currently more than 42% of all households have a broadband connection, according to the NCTA - more sports fans will flock to the web to view live pro sport telecasts.

But not everyone is cheering the emergence of broadband-based out-of-market sports packages. "Anytime you talk about technologies that are going to take eyeballs away from the settop box and the TV screen which is our bread and butter, it's going to raise some red flags and be a concern," said Mark Boccardi, vice president, programming & product development for In Demand, which distributes the various pro league out-of-market packages to cable operators.

Still, Boccardi said the NHL, NBA and MLB out of market packages continue to be "consistently strong performers" for cable operators despite competition from broadband and mobile sports packages. He added that in the end television still provides a richer experience for the sports fans than viewing on a computer or iPad screen.  

"Not only do I think there's strong opportunity for growth, I think the TV experience continues to remain the best way to watch these out-of-market sports packages," he said. "Even with these other ancillary packages I believe there's still room for growth on the television side."

 The NBA's Perez is also bullish on the revenue potential of streaming live content to mobile phones and other portable devices such as Apple's iPad. With mobile phones employing new and enhanced 4G technology, Perez said the potential audience for the league's $39.99 stand-alone NBA League Pass Mobile product launched last year is huge. The mobile package mirrors the same features as the NBA broadband offering.

"Mobile is probably the biggest opportunity for us going forward," he said. "What mobile allows you to do is watch not only when you travel but when you can't be in your house. If you're at your kid's soccer game you don't have to miss any of the action."

Apps? Absolutely.

To that end, DirecTV will also offer a wireless phone and iPad app for its NFL Sunday Ticket package this fall that will allow package subscribers to watch NFL action on the portable device. "I think the tablet market will be particularly viable for this type of content distribution just because the viewing experience is so good," said Kaplan. 

Baseball's iPad app has already been a major hit with consumers. The $14.99 At Bat app, which allows MLB.TV viewers to watch live games as well as breaking news, schedules, interactive rosters and player stats for every team, has already been downloaded 100,000 times since the iPad launched this past April, according to tech business website Business Insider.com. On average, about 40,000 people use the app on a daily basis, and from those daily users, 25% watch live games, according to the website. 

The NHL's Cooper said believes that the audience viewing NHL games on broadband, mobile and other portable devices could soon rival that watching the league's NHL Center Ice television offering. But the new media audience will add to rather than cannibalize the traditional television package and grow the overall audience for the product.

"We know that there is a lot of runway for growth when it comes from fan activation across all channels -- television included -- because our penetrations are nowhere near what we think market demand is," Cooper said. "Everyone should feel good about upside related to channel A,B,C or L -- we think there is a lot of upside when you look at how many avid and displaced fans there are in the U.S."


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