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SBJ/January 9 - 15, 2006/E Sports
Next for iPod: NHL and NASCAR
Published January 9, 2006
The sports industry’s fascination with the new video iPod has turned into a full rush of dealmaking, with the NHL and NASCAR close to reaching agreements with Apple Computer Inc. for video downloading.
ESPN and ABC Sports announced a deal with Apple’s iTunes online digital download store last week, joining other Disney properties in making video clips or entire shows available for $1.99 each.
Officials at both the NHL and NASCAR said they have similar deals that are within weeks of completion. MLB Advanced Media also is actively negotiating with Apple about an iTunes deal, executives there said.
“It would be fair to say we are close,” said Doug Perlman, NHL executive vice president of media. The NASCAR deal, meanwhile, could be complete in time for next month’s Daytona 500, industry sources said.
Apple officials deferred comment to ESPN and ABC Sports.The rush to sell sports content on iTunes arrives as the video iPod has quickly proved to be a massive success. Debuted in October to strong reviews, the next-generation iPod has fueled sales of more than 3 million videos, and attracted both ABC and NBC to sell their top-rated entertainment programming through the service, including shows such as “Desperate Housewives” and “The Office.”
Now, every other major content provider and hardware developer is scrambling to offer video for download, either through iTunes or a competitive service. Google’s announcement last week regarding the creation of the Google Video Store — with the NBA signing on as an initial content provider — added a powerhouse new player in a market that has developed practically overnight (see related story).
The ESPN/ABC content on iTunes — the first sports video to hit the service — will consist initially of condensed versions of the recently completed Bowl Championship Series, and a battery of ESPN-created programming such as “SportsCentury,” “SportsCenter” commercials and ESPN Original Entertainment features. As of late last week, 15-minute highlight packages of the BCS games were among the top downloaded programs on the iTunes service.
Financial terms of the iTunes deal were not available, but Apple typically arranges revenue-sharing agreements with content owners to share collected fees.
ESPN executives, initially cautious on how iTunes would coexist with the forthcoming ESPN Mobile venture, now see the two projects as complementary. The ESPN Mobile phones will feature many of the same programs, though on a streaming basis.
|BCS bowl game highlights were among
the top downloads on iTunes last week.
“We were watching very carefully how the ABC [entertainment] content was being received, and the market clearly has spoken,” said Sean Bratches, executive vice president of sales and marketing for Disney and ESPN Networks. “We’re putting our foot in the water, and I’m sure we’ll continue to go deeper as time goes on.”
The advent of the video iPod and downloadable video creates a whole new set of rights issues that leagues and networks must address. ABC’s BCS contract included a supplementary agreement for non-live, mobile distribution, Bratches said. Other ESPN content, however, could be encumbered by agreements that are limited to television or other specified new media outlets.
When they can, rights holders are looking to do their own agreements, bypassing the television networks and dealing directly with Apple, Google or any third-party that will compensate them for these rights.
The NFL is about to begin active discussions with several suitors for its new national Internet deal, a pact that could include expanded provisions for video downloads. The NBA, meanwhile, is playing the field.
“The iPod is a great device and it’s exciting to see what’s happening,” said Brenda Spoonemore, senior vice president of interactive services for NBA Entertainment. “Apple, however, is only one piece of a much larger distribution model. The key thing is having the best available content in the most convenient manner for fans.”