The article describes how Major League Baseball Advanced Media (MLBAM), an interactive media and internet company, has helped Major League Baseball (MLB) to become a profitable business both through e-commerce and m-commerce. MLB makes about $450 million per year. About half of the income comes from fans that pay $120 per season to watch games live over the Internet. The rest of the income comes from advertising of free content related to major league baseball teams. The business has grown significantly for MLB which is roughly $6 billion in total revenues. The market strategy for MLB is the implementation of online content business. MLB.com offers fans complete baseball information on the web such as up-to-date statistics, game summaries, historical background of the ball players, MLB events and programs, ticket sales, baseball memorabilia and collectibles, fantasy games, video webcasts of every game, and real-time pitch-by-pitch enactments of every game. The MLB Website offers more live events on the Internet than any other game in the world. Bob Bowman who is chief executive at MLBAM said, “Somehow the strategy of putting baseball games on every device that has a plug or a battery has worked for the business partners. Even more important, it has worked for our fans.”
MLBAM is now focused on the mobile phones as the next big opportunity for revenue. It has already built customized applications for a number of phones such as the BlackBerry from Research In Motion (RIMM). As of September 2008, MLBAM has implemented software that allowed individuals of the iPhone to acquire statistics from the Gameday Web site. This technology is likely to be followed by other similar applications for other phones such as Nokia, Motorola, and Sony-Ericsson. MLBAM hired a separate team to design mobile Web sites and applications. The MLB mobile site now receives about more than 10 million page views per day and it has more than 25 mobile applications. Right now the revenue generated from mobile phones is roughly $10 to $12 million so it is not a significant business for MLB. However, the revenue from mobile technology is expected to increase as Bowman mentioned, “I’m not sure it is for anyone, but those days will come.”
MLBAM understands that it could increase revenue from advertising if it develops a strategy for placing ads on its mobile Websites. However, it is still trying to determine the best course of action. They determined that advertising for wireless mobile phones is not robust because of the small screen, but as the technology becomes further developed, and the video becomes easier to use on all devices, then the technology will certainly become more profitable. Bowman’s strategy is that “If you serve the fans, you care of your business.” As a result, MLBAM will most likely become the lead in sports entertainment through m-commerce.
I like the article because I am a fan of Major League Baseball. I have made several trips to Dodgers Stadium. The technology described will certainly help me to better understand the significance of MLBAM through the internet to better provide mobile service to series fans.
Reference: Jay Yarow, "MLB's Real Competitive Advantage," Business Week Online, September 2, 2008, p26. Website: http://www.businessweek.com/technology/content/aug2008/tc20080828 _061722.htm.
it's interesting, sports is always a great motivator to push new technologies. Many people in our culture seem to identify strongly with sporting teams. A fascinating fact. i suspect the next players strike will be the players wanting a cut of the online revenue as well.
ReplyDeleteThe use of smartphone like iPhone and Blackberry is increasing, so is the potential revenue for mobile advertising. Application such as MLBAM and ESPN Scoreboard are free for smartphone users so they won't be able to make any money of the application itself but they will be able to generate huge profit from advertising.
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