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SBJ/20100315/This Week's News
MLBAM plans to star in support roles
Published March 15, 2010
MLB Advanced Media is pursuing an expanded role with back-end hosting of live online and mobile video, the type of work seen in recent deals with ESPN and CBS Sports to support key elements of the forthcoming ESPN3 and March Madness on Demand.
The move by baseball’s digital arm to grow its business-to-business activities to supplement its core business-to-consumer initiatives marks another step in its ever-evolving operating strategy.
MLBAM in 2008 began to lessen its non-baseball activities, parting ways with the World Championship Sports Network and AVP Pro Beach Volleyball, starting its gradual separation from Major League Soccer, and declining most other outside work. The group’s significant advances since then in the distribution of live digital video — both on the wired side, with a sharply upgraded MLB.TV, and on the mobile side, with its award-winning MLB.com At Bat application — have prompted company executives to further leverage their expertise and investments in this area.
MLBAM will provide the technical infrastructure and operational support for ESPN360.com when the broadband online video destination is rechristened ESPN3 next month. The product is available in more than 50 million U.S. broadband homes and to another 21 million students and military members with .edu and .mil domains.
Meanwhile, MLBAM also played a key role in development of CBS’s recently announced free and fee-based mobile applications for MMOD and will provide back-end video support and encoding for both the wired and wireless versions of that product. MLBAM executives are in active discussions with other major programmers, as well.
“We obviously run a lot of live events, and there’s a ton that goes into all of that: encoding, geolocation, pricing, order fulfillment and so on,” said Bob Bowman, MLBAM chief executive. “So we believe there’s an aggregated, cable-like model for us in which we let the content managers handle the front end, and we handle the back end.”
MLBAM this week will open a 4,000-square-foot data center near its Manhattan headquarters to help handle the increasing run of events, which will number nearly 200 just between Thursday and Sunday when counting MMOD, MLB spring training games and beta testing of ESPN3.
The new space, which provides increased security and temperature control critical to server management, was planned months ago, but the company could not have assumed the expanded role with ESPN without it.
The ESPN-MLBAM pairing links the largest and second-largest providers of paid sports video content in terms of volume.
“We were trying to solve the problem of delivering live content amid a constantly changing set of challenges, and in particular were looking for a Flash-based video experience that didn’t require a software download,” said John Kosner, ESPN senior vice president and general manager of ESPN Digital Media. “BAM obviously does a great job, and we have a situation now where they’re handling our back-end and we can play to our expertise in acquiring and scheduling content and providing a first-class experience for fans.”
MLBAM’s agreement with ESPN for now is a services contract, and with CBS Sports, it is participating in a revenue-sharing agreement for the paid MMOD mobile application. Such deals, Bowman said, by themselves do not represent major changes to MLBAM’s balance sheet. The potentially bigger prize and intended next step is a series of cross-selling and cross-marketing alignments in which advertising sales for different products such as ESPN3 and MLB.TV can be bundled together and users can be marketed to for additional content subscriptions.
“That’s the ultimate goal,” Bowman said. “The first step is to get these things up and running, but we see a lot of benefits to leverage across the engagement we’re seeing with these products.”