SBJ/October 31 - November 6, 2005/Media

Is sports video next for iPod?

iPods in the front office

Sports executives are fans of Apple’s iPod for more than its business possibilities.

Brenda Spoonemore,
senior vice president of interactive services for NBA Entertainment

• iPod model: Original

Recent downloads: Violent Femmes, Prince

Items in library: 1,231

Paul Brooks
, senior vice president, NASCAR

iPod model: Original, Nano, new video iPod

Recent downloads: Black Eyed Peas, Gavin DeGraw, Nickelback, videos by U2, “Desperate Housewives” episodes, audio books by Tim Russert, Donny Deutsch

Items in library: 1,399

Doug Perlman
, NHL senior vice president of television and new media

iPod model: Mini

Recent downloads: Coldplay, U2

Items in library: About 800

Bob Bowman, president, MLB Advanced Media

iPod model: Original, shuffle, Nano, new video iPod

Recent downloads: Bruce Springsteen

Items in library: 1,100

Apple Computer Inc. is in active talks with sports properties for content deals to help boost its new video iPod, which debuted earlier this month to rave reviews.

Officials for the Cupertino, Calif.-based company declined to comment, in keeping with Apple’s typical reluctance to discuss future initiatives. But executives for each of the major sports leagues either confirmed existing discussions to make video content available on iTunes, Apple’s online digital download store, or said they expected such talks to begin soon. Apple now sells music videos and several ABC TV and Disney Channel shows on iTunes.

“We’ve initiated some preliminary discussions with Apple,” said Doug Perlman, NHL senior vice president of television and new media. “It’s still very preliminary, but I wouldn’t be surprised if something evolved out of those talks. They’re interested. And I think there may be an opportunity for us. There are other portable video players out there, but [Apple has] come in with the potential to give this whole area a big boost, just like they did for MP3 players. We want to be wherever our fans are.”

Said Bob Bowman, president of MLB Advanced Media, which has sold video clips at mlb.com since 2002, “I would assume they’re talking to just about every content provider out there, and expect we’ll be talking to them soon, too. It’s a great device. Nobody moves the needle like [Apple CEO] Steve Jobs.”

A deal to get sports content on iTunes would not be unprecedented. The NFL last winter, in conjunction with Audible.com, made audio play-by-play of the NFC and AFC Championship Games and Super Bowl XXXIX available on iTunes. NASCAR, which has ventured into licensed music releases, also has songs from its Motor Music library on iTunes.

Video, however, provides much more sizzle and economic potential, leaving each major sports league with an important choice: Is it better to pursue a mobile video strategy alone or enlist the significant marketing muscle of Apple? A combination of sleek, well-designed digital music players, a massive promotional effort featuring the likes of U2 and Eminem, and a strong emphasis on content has propelled Apple to a 72 percent market share for portable MP3 players. A similar level of dominance is expected for the new iPod, even though it arrives on the mobile video market several years behind some of its competitors.

The video iPod, which debuted three weeks ago, does not carry a special name. Apple rolled it out as simply the next-generation iPod.

“When you see the [new iPod] for the first time, the argument that one would not want to watch video on a small device quickly evaporates,” said Paul Brooks, NASCAR senior vice president. “The video iPod will never replace the television experience — especially for NASCAR fans. However, like the cell phone, the iPod will be terrific for our fans to watch customized content when and where they want. It’s now up to us to deliver on the content side — and we will.”

“Nobody moves the needle like
[Apple CEO] Steve Jobs,” says
MLBAM’s Bob Bowman.

The new iPod also does not include capability for streaming live video, which has quickly assumed a place of importance in digital video strategies for each of the major sports leagues. But even without that ability, the new iPod’s reduced size, enlarged storage capacity and razor-sharp picture has wowed critics and created a rush at retail. Apple has not yet disclosed early sales figures for the new iPod, but while launching the device in Australia last week, executives said American sales have exceeded expectations.

“If you already have the assets in terms of content, this is going to be gravy, because this is still a rather new form of distribution that’s all greenfield at this point,” said Ross Rubin, technology analyst for The NPD Group.

The stakes are likely most significant for the NFL, whose TV ratings easily trump those of the other leagues, and which operates a massive video vault and digital production facility at NFL Films. In a memo sent to team owners in August, NFL executives said they are keeping a tight watch on how the mobile video market evolves. But there is no timetable to make a decision about the iPod.

“We are closely evaluating the opportunity,” said Brian McCarthy, NFL spokesman.

The league earlier this month announced a deal with Sprint to provide streaming video and audio content to the company’s wireless customers.

The NBA, similar to the NFL, dipped a toe last year in the waters of mobile video, forming a partnership with Nokia to offer streaming video highlights and other content to its cell phone subscribers.

Like the other leagues, the NBA sees the deal as the first step of a much bigger push into video that very well could include Apple.

“There’s no question that NBA fans have a thirst for better-than-on-demand programming delivered to their device of choice at their convenience,” said Brenda Spoonemore, senior vice president of interactive services for NBA Entertainment. “We’re still early in the adoption curve, but our experience is that mobile video will once again extend the sports experience in materially significant ways, similar to broadband, satellite radio or digital cable.”

The deal between the Walt Disney Co. and Apple to make ABC content available on iTunes does not include sports programming or highlights from either ABC Sports or ESPN. While it would seem natural for ESPN to follow suit, the company instead is pushing its resources to its ESPN Mobile venture with Sprint, which, not unlike the NBA-Nokia deal and NFL-Sprint deals, will include streaming video content.

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