Internet Video

Sports Stream

8/23/2010 12:01 AM Eastern

For more than a decade, National Football
League fans have been able to watch every
bone-crushing tackle and game-winning touchdown
through DirecTV’s popular NFL Sunday Ticket
exclusive out-of-market package for live games.

This year, the crowd will grow bigger, encompassing
even fans without DirecTV service. Instead of a hookup
from their roof-based satellite dish to their 60-inch
HDTV sets, fans will hook up a high-speed modem to
their laptop computers.

The broadband NFL Sunday Ticket package 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. While the effort is not a major
money-maker now, leagues fear they ignore viewer
trends at their peril.

The all-star roster of pro sports properties offering
content to portable devices includes nearly every slam
dunk LeBron James makes as a Miami Heat star through
the National Basketball Association’s NBA League Pass
Broadband package and virtually every live game during
Major League Baseball’s September pennant races.

With faster broadband speeds, more viewer-friendly
mobile phones and portable devices like the iPad,
league package distributors say streaming live sports
content provides fans with a viable alternative to viewing
contests beyond the TV.

“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,” Perry
Cooper, senior vice president of digital media for the National Hockey League, said.

The major professional leagues have made
the majority of their games available to consumers
through cable- and satellite-based
pay per view and video on demand out-ofmarket
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,” Lee Berke,
president of sports consultancy LHB Inc.,
said. “The bulk of viewers are still watching
live sports games on traditional linear platforms
like cable and broadcast television, but
it’s 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 of their live
sports products to the Web 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 proven
to attract huge online audiences in 2010.
ESPN3.com’s month-long coverage of the
World Cup soccer tournament this past June
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’s “March Madness” NCAA
men’s college basketball tournament coverage
drew a record 8.3 million unique viewers
who watched 11.7 million hours of live hoops
games 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, according to network
officials.

“You’re looking at a scenario where people
will continue to look to consume sports
content wherever they are,” Berke said. “Everybody
is anticipating the future 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.”

The NBA, MLB and NHL currently offer
out-of-market game packages to satellite,
cable and telco distributors. Th e NFL’s Sunday
Ticket package is distributed exclusively
through DirecTV through 2014.

In an effort to better serve its NFL Sunday
Ticket subscribers, DirecTV in 2007 began
streaming live NFL games as part of a premium,
$99 upgrade for subscribers already
purchasing its $300 linear Sunday Ticket
package, according to Alex Kaplan, senior
director of sports marketing at the top U.S.
satellite TV provider.

The add-on “super fan” broadband service
has since generated “fairly significant”
growth in subscriber usage for the streaming
package and has delivered incremental revenue
for DirecTV and the league — although
Kaplan would not reveal specific figures.

The satellite service will expand its offering
this season to, for the first time, consumers
who can’t receive DirecTV due to
line-of-sight issues, including those who
live in high-rise buildings. The broadband
NFL Sunday Ticket package price for those
subscribers is $350. It’s unclear exactly how many potential consumers this could add
to the package’s subscriber base of approximately
2 million.

“We saw fairly small take rates last year [in
a Sunday Ticket trial for Manhattan residents
in New York City] 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
said. “But it’s a very small piece of the pie.”

NOT A TV SUBSTITUTE

Despite the broadband expansion, Kaplan
still sees the broadband NFL Sunday Ticket
package as a complement to its linear package
and not a substitute for watching the package
on television. To illustrate that point, DirecTV
is giving away the broadband service to new
customers who also buy the Sunday Ticket
package and has lowered the broadband price
for existing subscribers who buy the package
to $50 from $99.

“We certainly don’t think our mobile and
online versions are going to take the place of
[the TV] experience,” Kaplan said. “We see it
as a great supplement and enhancement to the
existing product.”

Other pro sports leagues, like the NHL, see
broadband packages more as revenue generators.
Along with the live feeds, the online
packages often provide more features than
the traditional television packages. Th e NHL’s
$169 GameCenter Live online game package,
for example, 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, Cooper said.

The league has experienced a 25% increase
in subscription sales for the 2009-10 package
compared to last season, according to Cooper.
“We’ve had 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 said.

The NBA has also garnered “significant”
sales for its inaugural 2009-10 NBA League
Pass Broadband package, according to Bryan
Perez, senior vice president and general
manager for NBA Digital, although he would
not reveal specific figures. The $149 package
— which is free to 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 those customers
who subscribe to the television version is the
ability to watch when they travel, and that’s what
League Pass Broadband serves,” Perez said.

Major League Baseball has been among
the most successful thus far in pitching its
online out-of-market package to consumers.
MLB Advance Services’ MLB.TV premium
service, which launched in 2002, generated
more than 500,000 subscribers during the
2009 season, according to MLB officials. That
number is expected to grow as the league has
expanded the distribution of the package to
Sony’s Playstation 3 gaming console and
Roku Internet-connected set-tops.

The $119 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 and jump to any half inning of a live or
on-demand game, according to the league.

Executives said that 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 sports telecasts.

Some cable operators have expressed concern
about losing subscribers
to their linear
out-of-market sports
packages. Still, Mark
Boccardi, vice president,
programming
and product development
for In Demand,
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.

“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,” Boccardi said.

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.

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 portable
devices. “I think the tablet market will
be particularly viable for this type of content
distribution just because the viewing experience
is so good,” Kaplan said.

MLB’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 league officials.

“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,” the NHL’s Cooper
said. “Everyone should feel good about upside
related to channel A,B or C — we think there is
a lot of upside when you look at how many avid
and displaced fans there are in the U.S.”

What pro sports leagues
are offering online:

Major League Baseball: MLB.TV, $119 annually; for cell phones,
mobile devices such as the iPad, Sony’s Playstation 3 game console
and Roku’s Internet-connected set-top box.

National Football League: NFL Sunday Ticket To-Go (in conjunction
with DirecTV), $350 annually; available to consumers unable to
access DirecTV. Additionally, NBC will stream its NFL Sunday Night
Football telecast on NBCsports.com and NFL.com.

National Basketball Association: NBA League Pass Broadband,
$149 annually; NBA League Pass Mobile, $39 annually.

National Hockey League: NHL GameCenter Live, $169 annually;
provides multiple camera angles for one game nightly; viewers can
watch up to four games simultaneously.

Sports fans have flocked to
online events in 2010:

ESPN3.com’s June World Cup soccer tournament
coverage generated 7.4 million
unique viewers.

CBSSports.com drew 8.3 million unique
viewers to its NCAA Men’s College Basketball
Tournament coverage in March and
early April.

NBCOlympics.com’s 17-day coverage of
the 2010 Winter Olympics from Vancouver
drew 46 million unique viewers.

SOURCE: The networks

October