Published:
29-Jun-09
Major League Baseball Advanced Media (MLBAM), the league's online division, has secured live in-market streaming rights to New York Yankees and San Diego Padres games after agreeing deals with the relevant regional sports networks (RSNs) and local cable operators. The Yankees and Padres deals – agreed with RSNs YES and Channel 4 San Diego, and local cable operators Cablevision and Cox, respectively – are the first MLB has announced since it opened negotiations for local streaming rights with all 30 MLB teams earlier this year.
The terms of the deals restrict access to the games to the participating cable operators' broadband subscribers (and in the case of the Yankees-YES-Cablevision deal, to cable subscribers taking the extended basic TV package with which the RSN is bundled). Users must also pay a premium to watch the games online – $19.95 for 30 days access or $49.95 for the remainder of the season.
The live in-market games will be streamed via the teams' portals, which are operated by MLBAM; Yankees games will also be available through the YES site (operated with MLBAM), while Padres games will also be offered via Cox.com. MLBAM will manage the authentication process, which will enable users to watch the games online anywhere in the region but will block out-of-market streaming. Indeed, there has been no indication that these games will be available via MLBAM's centralised streaming subscription service MLB.tv, which is currently only able to stream out-of-market games live as blackout restrictions designed to protect local TV rights have prevented MLB streaming games in regions where they are being broadcast.
MLBAM recently extended the reach of MLB.tv though a deal with Boxee to offer its online service via the free media centre and an upgrade to its iPhone and iPod Touch app to include adaptive bitrate live video streaming.
Premium subscribers to MLB.tv can now stream games live and on-demand through Boxee at no additional cost. Boxee is optimised for viewing on a TV screen but users have to connect their set directly to a computer or via a media extender in order to access it. The online video aggregator is looking to agree deals with device manufacturers to build Boxee into Internet-connected TVs, set-top boxes and other hardware, which will enable it to deliver content direct to the living room.
MLB is also launching live streaming on Apple's iPhone and iPod Touch devices with the latest version of the MLB.com At Bat 2009 app. Even before the addition of live streaming At Bat 2009 was the best-selling sports application in the US iteration of the app store and still ranks among the top 100 paid applications overall, more than two months after its launch.
MLB will initially stream up to two live games per day via the app, for no extra charge, but plans to expand the offering to enable MLB.tv subscribers to access all games streamed across paid online service. The app enables users to pause and rewind live games and uses adaptive streaming to provide the optimum user experience, whether video is streamed via Wi-Fi or the iPhone's 3G connection.
Live streaming is enabled by the latest iPhone and iPod Touch operating system (OS). Before now, video streaming to the Apple devices had been improvised by developers; with the version 3.0 upgrade Apple has introduced a formally standardised protocol for video streaming - HTTP streaming using H.264 - which should result in more efficient and reliable delivery, although this is obviously dependent on the user's connection. Users that downloaded the $9.99 app prior to the new OS are entitled to a free upgrade once they have updated their device.
Our take...
MLBAM continues to push the envelope for online distribution of sports video. By delivering content 'over-the-top' (OTT) to Internet-connected devices MLB can extend the reach of its online service, offering a value-add for existing MLB.tv subscribers and creating an opportunity to up-sell its top-tier subscription. To access content via Boxee users must subscribe to the premium MLB.tv package, which costs $20 a month compared with $15 a month for a basic sub (MLB also offers discounted annual subscriptions for the premium and basic services). And while MLB will stream one or two games a week for free via the Apple devices, the expanded service will only be available to MLB.tv subscribers.
However, while MLB explores OTT opportunities it is clearly keen to preserve existing revenue-rich deals with traditional platform partners. By partnering with local cable operators on in-market streaming, the league avoids antagonising the 'gatekeepers' that control the lucrative pipeline into the living room.
In a broader context, the cable companies' willingness to co-operate offers further evidence of traditional platform operators embracing online distribution and multiplatform delivery amid concerns – especially around sports content, which underpins the pay TV business – that OTT delivery will result in rights holders bypassing established distribution channels. Indeed, the terms of the in-market streaming deals are on similar lines to the TV Everywhere model on which Time Warner and Comcast are collaborating, which will offer cable subscribers online access to cable programming (although this will be on a VoD basis and for no additional charge).
Restricting access to the live in-market games to the participating cable company's broadband subscribers (and in Cablevision's case, pay TV subscribers) seems to have assuaged fears that online access to cable programming could cannibalise their core pay TV business. The requirement that users pay a premium for online access will also be welcomed by traditional platform operators, although MLB admits that the in-market online subscription model is likely to generate modest revenues initially. According to MLBAM – which expects the majority of teams to be participating by the end of 2010 – all local streaming deals will be based on the 'same relative terms', with MLBAM taking around a 50% share of the revenues generated from the in-market subscription – net of operating costs – and the rest being split between the 'local interests' (the cable companies, the RSN and the team itself).
RSNs and cable operators might also be appeased by the fact that they can offer the in-market games through their own sites, rather than the centralised MLB.tv service. That these games are apparently not available via MLB.tv suggests that MLBAM will be pursuing two different distribution strategies for live streaming, with MLB.tv serving out-of-market fixtures, and the local interest portals hosting in-market games.
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