Nothing But Net
At the height of the stock market Internet craze, when emphasis was placed on the transformative nature of new technology, the only events of historical import deemed relevant were followed by the term "revolution" (as in "the industrial revolution") or preceded by "invention" (as in "the invention of electricity"). But when it comes to business models involving sports content and streaming, historical evolutionary models are, I believe, most relevant. And that’s very good news. Why? Because sports has been an important driver of every new delivery system of the past 50 years or so, and promises no less for streaming.
From the Friday night fights in television’s early days, to the Olympics as an early definer of the ABC Television Network, to the National Football League, Major League Baseball and the National Basketball Association as staples of over-the-air network television, sports could be counted on to attract users to the medium. Cable was projected in the ‘70s as the medium that would replace over-the-air television. It didn’t, but what it did do initially was provide "niche" outlets for fans of many types of programs — especially for sports. Individual teams put more games on locally for their fans, and ESPN made a bet that enough viewers would be there to consume a 24-hour all-sports network.
As cable penetration increased to its current level of over 75 percent of U.S. households, the number of hours devoted to sports programming on the national cable networks accelerated, and regional sports networks — which themselves boast subscribership approaching 70 percent of television households — dramatically increased their live programming hours.
The future of streaming media promises yet another live distribution channel — one that reaffirms the significant appointment viewing aspect of sports.
Then came satellite delivery, and if you check the offerings of DirecTV, you will find for intense sports fans, tailored offerings of the NBA, National Hockey League, MLB, NFL and college basketball, all driven by the channel capacity advantage that satellite offered over traditional cable distribution. Projections for satellite penetration in the next several years are currently in the 20 million household range.
To add to this cornucopia of "viewers’ choices," digital cable is now in the intense rollout stage. The NBA’s League Pass and its 1,000-game package are now being offered on digital cable through iN DEMAND, as well as on satellite. It may be just a matter of time until most, if not all, sports programming currently available on satellite becomes packaged for digital cable, as well. Although the projections vary considerably, I believe it is a safe bet that the penetration in "digital homes" (both satellite and cable) will be well in excess of 60 percent of television households by the end of the decade, and sports, as it always has been, will be an important participant in driving this increase.
Sports has been no less important to the development of regular usage of the Internet by those seeking "content." Fans regularly go to their favorite sites for scores, information, fantasy games, shopping, audiocasts and highlights. There can be no doubt that high-speed delivery will increase — whether by cable modem, two-way satellite or DSL — and in light of historical precedent, it is more than likely that sports will be at the forefront again. In fact, it has begun.
- The NBA has been streaming the audio from each of its games for the past four years, and more recently has made the audio broadcast available to the more than 175,000 subscribers to RealNetworks’ GoldPass.
- NBA.com TV, the 24-hour NBA network initially available to DirecTV and digital cable subscribers, is now also being streamed to the subscribers of Real’s GoldPass.
- MLB has recently made a deal with RealNetworks to stream audio feeds of all MLB games for a fee to subscribers.
- On April 13, the NBA video webcast a live game between Dallas and Sacramento, marking the first time in history that a professional sports league made a live game available on a global basis to its Internet audience.
- The NBA has entered into a long-term deal with Convera Corp., which promises to set the standard for a video services company, for everything from indexing and infrastructure to distribution channels for a variety of Internet and set-top box applications.
Streaming media offers sports consumers more control over their viewing experience, which can be synched up with stats, analysis and other features that sports content feeds. On-demand streaming media offerings such as
NBA.com’s My Highlights — through which users are able to determine exactly what players and plays they want to see and create personalized highlight reels — provide fans the functionality to create their own highlight shows at any hour of the day, rather than waiting for someone else’s rendition at 6 or 11 o’clock.
With streaming media content creation and distribution relationships with America Online, Convera, CNNSI.com, ESPN.com, RealNetworks, Sportsline.com, Yahoo!, and a variety of international partnerships, the NBA is positioned to help set the standard for consumer adoption of live and on-demand programming.
Even as reality begins to supersede hype, streaming media will not replace traditional television, cable and satellite outlets anytime soon. As a complimentary experience to current methods of mass distribution, streaming media extends and enhances the user experience, increases fan interactivity and allows consumers to view the program when they want to. The future of streaming media promises yet another live distribution channel — one that reaffirms the significant appointment viewing aspect of sports. In this age of "reality" television programs like Survivor and Temptation Island — which are in fact taped and edited well in advance of their airing — sports remains the best live drama, the last stand of authentic reality TV.