No one ever accused big league baseball owners of adopting technology early. Lights? Too expensive. Radio and television broadcasts? That’ll kill the gate, the Lords of the Realm declared.
The Internet? To no one’s surprise, the owners were slow to embrace the new media years ago.
Today, as the 30 owners who collectively comprise Major
League Baseball (MLB) gather for tonight’s All-Star game, the
magnates are sitting on an estimated $100-million-a-year digital empire, built by its Web presence.
Through its wholly-owned subsidiary, MLB Advanced Media, baseball is
raking it in online. This includes subscriptions to live streaming media of games,
audio broadcasts, ticket sales, memorabilia and advertising and
sponsorships.
How lucrative? During last year’s World Series playoffs between Boston
and St. Louis, MLB.com counted more than eight million visitors in a single, record
day. The day after the Red Sox won the World Series, MLB.com recorded more
than $5 million in sales of Red Sox gear.
“The owners want to do with digital media what NFL did with broadcast
media: centralize it and exploit it,” said Bob Bowman, president and CEO of MLB
Advanced Media. “The charge
is simple: promote the game of baseball, get fans closer to the game of
baseball and get them to enjoy the game in ways they haven’t before.”
On any given day of the regular season, Bowman said MLB.com is as busy as
Amazon or eBay, pulling in six and seven million daily visitors checking out an
average of 10 pages per visit. Although the site is 95 percent free to
users, MLB is running up impressive numbers selling content, tickets and
memorabilia.
MLB.com offers users the ability to see live streaming media of games and
audio broadcasts. Users pay $3.95 per game or $14.95 a
month for all the games they want to watch or listen to. Bowman anticipates
more than a million paid subscriptions by the end of this season.
That’s only 30 percent of the annual take, Bowman said. Ticket sales,
through baseball’s purchase of tickets.com earlier this year, should hit between $15 million and $16 million this year.
MLB.com makes $3-$4 per ticket sale. Along with
sales of hats, bats, balls and other memorabilia, tickets and e-commerce are
50 percent of MLB’s online gross.
Advertsing and sponsorships make up the other 20 percent of MLB’s online
business.
“Consumers are going to tell us what they want and we have no choice but
to deliver baseball over every device we can,” Bowman said.
For Bowman, that currently means cell phones. MLB.com users can
currently listen to any MLB broadcast over their cell phones. By August,
Bowman said, live streaming media will be available over cell phones.
“It’s unbelievable. Live, on-demand baseball through your cell phone,”
he said. “Baseball believes in the subscription business and, on the phone,
everyone is used to paying for it.”
Bowman said he hopes to grow MLB.com
at around 30 to 50 percent a year over the next five years, driven by cell phone subscription sales.
“It’s a three screen world: television, PCs and phones,” he said.
“People are going to spend more time with a [phone] screen than a PC.”
Bowman, the former president and COO of ITT Corp., said the owners
originally ponied up $120 million in start-up capital for its online
operations in 2000. MLB.com was in the black by 2002, having used only $70
million of its seed money.
He said owners have considered an IPO for MLB
Advanced Media but those plans are currently on hold.
“Every company worth its salt has a digital strategy and baseball is no
different,” Bowman said.
Not everyone, however, is an All-Star in only its sixth year.
