Major Pro Sports No Different
The same kinds of television rights issues prevent live video coverage of most major sporting events online. The National Hockey League's broadcasting business is built on regional and national deals. "To stream any live game would totally undermine the framework we have for the broadcasting of our games and today that's a big limiting factor," says Doug Perlman, group vice president of Media Ventures NHL.
For the NHL, the audience size is not yet large enough to call for a serious change in the way broadcasting rights are handled. "In the future, making exceptions is a possibility, but certainly we are only going to do that at the point in time when it makes economic sense," says Perlman.
Mark Cuban agrees that it comes down to audience size.When Yahoo! streams an audio broadcast of, say, a Manhattan-Rhode Island college basketball game, it may get an audience that numbers in the hundreds. If advertisers on the broadcast paid the same rate as they do for radio broadcasts, streamed spots would cost $25 each.
"That's not going to pay for the bandwidth, let alone much else," Cuban points out. "The economics just don't work. Today, streaming sports is pretty much a loss leader that sites use to differentiate themselves."
While Cuban may judge that many Web sites are using streaming sports just as a means to show they can do it, there are others in the industry who are pretty serious about finding the winning revenue model, whether it is subscription, advertising-based, or pay-per-view.
"Really, the space is so undefined right now you have to experiment with ways to make the numbers work," says Matt Rightmire, vice president of entertainment and media at Yahoo!. "It could be a combination of all three, or it could be paid for by a bandwidth provider."
Regardless, the bottom line will take precedence. "We're in the business of making money," maintains Rightmire. "If it doesn't work, we won't be in business for long."
Quality An Issue
The NBA, says Brenda Spoonemore, vice president of Internet services for the NBA, is not interested in live video coverage on the Web until the experience is greatly enhanced. "I don't believe there is a demand for a full-length game experience on a postage stamp-size video," says Spoonemore.
"You are not going to get the audience and you are not going to command the same kinds of rights fees, and there is no reason to undermine existing rights fees until there is an experience that is competitive," continues Spoonemore.
Geoff Reiss, vice president for programming and operations at ESPN.com, agrees that people won't watch a lot of streamed content on the Web until it becomes a much better experience.
"Twenty-five years ago, when cable was breaking, everyone was saying, ‘There's no way I'll pay for TV.' It wasn't until the cable industry could demonstrate that the product offering was worth having that viewership rose," Reiss says. "No one would pay for cable if the programming were 25 channels of local access TV."
Ultimately, quality will determine the success or failure of streaming sports content, Reiss maintains. "There isn't any issue more important than presentation," he says. "Until this content is presented in a way close to the quality we see on TV, I don't care how personalized it is, or compelling, it's not going to work."
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