sports over ip: dynamics and perspec4vescfp.mit.edu/events/09oct/cfp fall09 presentations... · nba...
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10/29/09
SportsoverIP:dynamicsandperspec4ves
EmmanuelBlain
CharlesFine
10/29/09
Outline
•Framework–HistoryofsportsbroadcasAng
•Problem:WhathappenswhenyougooverIP?
•AnAtrustconsideraAons
•SystemDynamicsmodel
•ApplicaAon:BigleaguesandSmallleagues
10/29/09
$10M/year (43%ofUSpop)
(28.7MAckets,$12.5avg)
SI:1.3Mreaders/week
Thedeliverymodelforsports‐1970
10/29/09
$10M/year (43%ofUSpop)
(28.7MAckets,$12.5avg)
SI:1.3Mreaders/week
Thedeliverymodelforsports–MLB1970
Salaries:($29.3K/player,19% ofteamrevenue)
Over the Air TV:~100% share Total TV Revenue =$10M
10/29/09
(45%)
(55%)
$136M/year
SI:2.4Mreaders/week
(43%ofUSpop)
(46.8MAckets,$10.5avg)
Thedeliverymodelforsports–MLB1985
Salaries:($371K/player,49% ofteamrevenue)
Over the Air TV: 45%Cable TV & DBS: 55%
Total TV Revenue =$136M
10/29/09
(10%)
(90%)
SI:3.1Mreaders/week
(0.3%)
250Mreaders/week
(43%ofUSpop)
(75MAckets,$19.17avg)
($3.6/subscriber)
Thedeliverymodelforsports–MLB2005
($85.7avgfor4)
Salaries:($2.9M/player,55% ofteamrevenue)
Over the Air TV: 10%Cable TV & DBS: 90%WebTV:~.3% Total TV Revenue =$670M
10/29/09
(10%)
(90%)
3.1Mreaders/week
(0.3%)
250Mreaders/week
($71.36avg)
($3.6/subscriber)
Thedeliverymodelforsports–NFL2005
($107.56avgfor4)
$100M/team
Salaries:(59% ofteamrevenue)
Over the Air TV: 10%Cable TV & DBS: 90%WebTV:~.3% Total TV Revenue =$3B
10/29/09
Thena4onalTVchannelslandscape–OTAchannels
TelevisionNetwork Founded%ofU.S.households
reached
PBS 1969 ~99.00
ABC 1948 96.75
NBC 1946 97.17
CBS 1948 96.98
FOX 1986 96.18
10/29/09
Thena4onalTVchannelslandscape–moreandmorecablechannels
Name Owner NotesCBSCollegeSportsNetwork CBSCorporaAon formerlyCSTVESPN
Disney/HearstCorpora4on
ESPN2
ESPNPlusAservicethatsyndicatescollegesportstolocalbroadcastandregionalcablesta4ons.
ESPNClassicformerlyClassicSportsNetwork;some4mesusedasanoverflowforESPNandESPN2
ESPNews 24hoursportsnewsESPNU collegesportsESPNDeportes SpanishLanguagesportsnetworkFoxCollegeSports
NewsCorporaAonFoxSportsenEspañol formerlyFoxSportsAméricasFuelTVMLBNetwork MajorLeagueBaseball launchedJanuary1,2009NBATV Na4onalBasketballAssocia4on formerlyNBA.comTVNFLNetwork Na4onalFootballLeague launchedNovember4,2003NHLNetwork Na4onalHockeyLeague launchedOctober1,2007OutdoorChannel OutdoorChannelHoldingsInc.TheSportsmanChannel TheSportsmanChannelLLCVersus Comcast formerlyOutdoorLifeNetwork/OLN
10/29/09
OTAisreallyinadifficultsitua4on
•CablechannelsnowhaveacompeAAveadvantage:‐Dualrevenuestream(ads+subscripAons)‐Morethan60%penetraAonintheU.S.‐EasiertoaggregateRegionalSportsNetworksthatsAllbenefitfromhighraAngs‐Leaguesofficialchannelsareownedbyleagues:$0broadcas4ngrights!
•Moreandmoredealsarecutwiththesechannels(e.g.NFL)
10/29/09
Nowgoingonline…MLBexample•MLB.comisthe#1onlineportalforbaseball(wellaheadofESPN.com)
•MLB.TVrebroadcastsgamesonacomputerviaInternetsince2002.Theblackoutandout‐of‐the‐marketpoliciessAllstands,but4me‐shiaingispossible.
•NowstreamingtoiPhonesaswellPlace‐shiaing
10/29/09
Threemain“disrupAve”architectures:
#1:Contentisking‐‐SportsoverIPusingMLB.TV:MLBtakescontroloveralmostthewholevaluechain,fromcontentcreaAontoaggregaAon/distribuAonISPas“dumbpipe”
#2:Broadcasterisking‐‐SportsoverIPusingFancast/Versus:ISPusesanin‐houseplamormtogathercontentandcustomersCustomerspayforcable,getcontentonlineforfree
#3:Rebroadcas4ngSportsoverIPusingjusAn.tv(pirate):JusAn.tvistheappandaccessproviderISPas“dumbpipe”
ScenarioClassifica4on
10/29/09
Parallelwithdigitalmusic:
#1Contentisking‐‐SportsoverIPusingMLB.TV:MadonnacontracAnghertourpromoterforherCDreleases
#2Broadcasterisking‐‐SportsoverIPusingFancast/Hulu:Warnerusingonlineplamorms(iTunes)tosellmp3s
#3SportsoverIPusingjus4n.tv(pirate):Napster,KaZaa
IsthesamesequencegoingtohappenforSports?Willthosethreemodelscompetewitheachother?Isonegoingtoprevail?
ScenarioClassifica4on
10/29/09
SpoIPandAn4trust
OverviewoftheregulaAonforCable:
•1960s:theFCCdidnotwanttoregulatecable
•Firstregulatorymove:CableCommunica4onsPolicyActof1984(deregulaAonwithconstraintonmargins)
•Re‐regulaAon:CableActof1992(regulaAonofbasicratesforcableproviders)
•Finally,deregulaAon:Telecommunica4onsActof1996«effecAvecompeAAonwillkeeppricesdown»
10/29/09
Whereisthevaluegoing?
SpoIPandAn4trust
10/29/09
OverviewoftheregulaAonforSportsBroadcasAng:
•SportsBroadcas4ngAct(SBA)of1961(league=singleenAty,allowedtoactasamonopoly)
•…andthat’sit.
•IsthisreallysAlladequatetoday?
Update:AmericanNeedlevs.NFL
SpoIPandAn4trust
10/29/09
Marketpowerfortheleagues…
SpoIPandAn4trust
10/29/09
Lessons:
•RegulaAonisbroken(SportsBroadcasAngActisnotrelevant)
•Regulatorsarewatchingbroadcasters,want«effecAvecompeAAon.»
•Back‐and‐forthregulatorymovesmakelong‐termprojecAonsdifficultWhatwillbedoneaboutWebbroadcasAng?
•Fornow:•Cableproviders&broadcasterswillhavetorespectnetneutrality•LeaguesmayhavetocompletelydisintegratecontentproducAonanddistribuAon(e.g.MLB&MLBAM)tocomplywithAnAtrust
SpoIPandAn4trust
10/29/09
SDmodel:Methodology
•UseofSystemDynamicstomodelthemarketforSportsviewingandtheinteracAonsbetweenfans,leagues,broadcastersandpolicymakers.
•CompeAAvemodelbetween:‐CableTV(e.g.ESPN)‐WebTV(e.g.MLB.TV)‐PirateWebTV(e.g.jusAn.tv)
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
DemandFor Live
Performances
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
TeamRevenue
+
+
StadiumPrices andAttendance
++
DemandFor Live
Performances+
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
TeamRevenue
+
+
StadiumPrices andAttendance
++
DemandFor Live
Performances+ Content Attractiveness
+
+ ++
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
TeamRevenue
+
+
StadiumPrices andAttendance
++
DemandFor Live
Performances+ Content Attractiveness
+
+ ++
-
- -
(Local Sports
Blackouts)
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
TeamRevenue
+
+
StadiumPrices andAttendance
++
DemandFor Live
Performances+ Content Attractiveness
+
+ ++
-
- -
(Local Sports
Blackouts)
- -
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
TeamRevenue
+
+
StadiumPrices andAttendance
++
DemandFor Live
Performances+ Content Attractiveness
+
+ ++
-
- -
(Local Sports
Blackouts)
- -
BroadbandDemand
+
+
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
TeamRevenue
+
+
StadiumPrices andAttendance
++
DemandFor Live
Performances+ Content Attractiveness
+
+ ++
-
- -
- -
BroadbandDemand
+
+
InternetInnovation
++
10/29/09
PotentialFans
CasualFans
(Video)
RabidFans(Live)
FanCreation
Rate
Rabid FanCreation
Rate
LeaguePopularity
+ ++
+
DemandFor VideoContent
+++
+ + +LicensedInternet
Un-LicensedInternet
Cable /Paid TV
TeamRevenue
+
+
StadiumPrices andAttendance
++
DemandFor Live
Performances+ Content Attractiveness
+
+ ++
-
- -
- - BroadbandDemand
+
+
InternetInnovation
+
+
+ +
10/29/09
MLBaverage4cketprice
10/29/09
MLBplayers’salary
10/29/09
MLBrevenuesfromtradi4onalTV
10/29/09
Applica4on:Smallleaguesvs.Bigleagues
ExampleofsmallleagueoverIP:Sail.TV
•Createdin2006intheUK
•FreeWebTV,totallyad‐supported.
•User‐generatedcontentcanbeuploaded
•contentisavailableon‐demand(forfreefornow)
•Featuredthe32ndAmerica’sCup
•Verysmallshareofonlinetraffic.
10/29/09
Ourbet
Bigleagues Smallleagues
Contentisking
Broadcasterisking
10/29/09
Bigleagues
10/29/09
Smallleagues
10/29/09
Conclusions
•SpoIPisslowlydisrupAngtradiAonalSportsBroadcasAng•Leaguesmovingdownthevaluechain•Cablecosmovingupthevaluechain?•Piracythreat
•ThelegislaAonneedstobefixed•SportsBroadcasAngActirrelevantnowadays•DoesWebbroadcasAngneedtoberegulated?How?
•DifferentchallengesandopportuniAesforsmallandbigleagues
10/29/09
Thankyou!
Anyques4ons?
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