Pro sports jumping into digital arena

Apr 16, 2001  •  Post A Comment

The National Hockey League became the latest rights holder to see the benefits of managing and distributing its video assets electronically. Last Thursday it announced it would provide on-demand highlights of 2001 Stanley Cup Playoffs on NHL.com.
“The deal is for this year’s playoff’s only-we want to do a short-term deal to start,” said Doug Perlman, the NHL’s senior vice president of television and media ventures. “We want to make sure that it works in practice-and gauge its popularity.”
According to Virage spokesman Carlos Montalvo, entities providing sports and news coverage are among the first in video publishing to move to the Web because they have proven brands, audience and content that lend themselves to nonlinear and personalized viewing in a way that long-form TV does not.
“They also have very straightforward intellectual property rights that are readily deployable across multiple business models and viewing devices,” Mr. Montalvo said.
The property rights message came across loud and clear late last month when Major League Baseball announced an exclusive three-year, $20 million pact with RealNetworks that effectively cornered the market on live audio webcasts while converting them from a free to a subscription-based service.
And radio is only the beginning. MLB and Virage are already setting up the infrastructure to create a searchable video database for the 2001 season.
World Wrestling Federation Entertainment preceded MLB into the digital archiving business by about a week, choosing Sekani as its media-asset-management partner. The project will store, catalog and manage more than 40 years of original live programming, pay-per-view events, home video and other media properties. Driving the initiative, WWFE President Stuart Snyder said, is the potential to “transform our vast library into significant new revenue streams.”
Mr. Snyder estimates that the entire project will take about 18 months-as well as “a seven-figure investment”-to complete.
Mr. Snyder pointed out that in addition to the WWFE generating added revenues, digitizing its assets would streamline and reduce time to market its product. Instead of spending days or even weeks to find a certain piece of footage, access would be instantaneous with the computerized system. And once WWFE can better manage its assets, Mr. Snyder reasoned, it will be in a better position to protect them.
Leading the digitizing sports pack is the National Basketball Association, whose “In Progress Highlights” let fans create highlight reels during the online broadcast of the April 13 Sacramento Kings vs. Dallas Mavericks game, thanks to patent-pending technology provided by Convera. The Convera technology comes in two versions: an Internet-only model (used by the NBA) and a TV-plus-Internet model, where the user watches the game live on TV but turns to a PC for replays. Be Here gave it a panoramic 360-degree perspective.
“By centralizing the management of these sports assets, the entities are taking the first steps toward creating value where there was no value before,” said Steve Vonder Haar, an analyst at the Yankee Group think tank who focuses on streaming media. “I think there’s a very good chance that they will find a market that generates incremental revenues that support the deployment of this technology. But it will not replace the network broadcast TV contract anytime soon.”
He believes any fallout from broadcasters over being cut out of the Internet game will be short-lived.
“You will have rights holders from radio and TV crying foul over these emerging Web-based content-distribution deals,” Mr. Vonder Haar acknowledged. “But this technology represents a way to grow the overall market by encouraging a broader set of consumers to at least sample pieces of the content. Using digitization to repackage in-game content paves the way for more viewers to be engaged with the sport. And you’re still going to have fans who watch the game from the start to the bitter end.”
He expects revenues from these webcasts to be modest-at least initially.
“Historically, the amount of revenue attributed to any online initiative represents a tiny sliver of the overall broadcast contracts,” Mr. Vonder Haar said. “Broadcasters are not going to miss the online content. And the Web to these folks is a sideline business-it’s not going to move rating points or ad dollars.”