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SBJ/June 24-30, 2013/Media
PlayOn!, high school group planning national network
Published June 24, 2013, Page 1
They’ll go to websites, mobile devices and, Rudolph eventually believes, a digital network that’s the home for strictly high school sports.
The digital high school network will broadcast games
The task of aggregating enough high school viewers to make a network commercially viable remains the question. It’s the moms and dads and grandparents of high school athletes who will make up the audience, and media experts remain skeptical that there are enough of them to generate the revenue needed to make a network go.
But for now, Rudolph said, the network is a digital play that will be accessible through broadband, wireless or any TV-connected device, and he projects that he can make the network thrive on 1 million consumer subscribers, or 20,000 a state, at $6 a sub. That’s a lot of moms and dads being asked to pay $72 a year for a subscription.
“I think this can be the Netflix of high school sports,” said Rudolph, the CEO of PlayOn! Sports and a former Turner executive.
An announcement this week at the NFHS annual meeting in Denver will make the new network official. Rudolph and NFHS Executive Director Bob Gardner will present the news to the 51 state high school associations that make up the organization, which is loosely like the NCAA of high school sports. The NFHS Network, as it will be called, has a planned launch in August.
Rudolph describes the high school market as uncluttered and ripe for such an opportunity. But Lee Berke, a New York-based media consultant who has worked on regional networks for college and pro sports, sees the high school space as completely cluttered. Fox regional networks, ESPN, Time Warner Cable, Comcast and local TV stations all broadcast high school events in some form, he said.
“The interesting thing is that there’s been a medium level of interest and activity around high school sports for over a decade,” Berke said. “They all get to a certain level and that’s as far as it goes. There have been a number of high school aggregators that have come and gone because it’s such a fragmented market. To achieve mass to make something like this work, you’ve got to have hundreds upon hundreds of relationships with schools and states, and the audience has to literally go from community to community.”
The NFHS relationship is where Rudolph believes he has a differentiator.
The NFHS and the state associations will own a combined 52.5 percent of the NFHS Network, while PlayOn! Sports will own 47.5 percent. Each of the 51 state associations (including one for the District of Columbia) will own a share at the network’s launch.
“We believe in the appetite for this kind of product,” Gardner said. “A lot of states do things TV-wise on a local level, but nothing like this has ever been attempted before on a national level. This brings the potential for some uniformity.”
PlayOn! Sports, with a staff of 65 employees and more than 2,000 freelancers, has been working for most of the last five years to create a digital home for the broadcast of high school sporting events at playonsports.com. PlayOn! since 2008 has produced and streamed thousands of high school sporting events.
The NFHS Network is the next phase. The meat of its live game programming will come from the thousands of postseason high school events across a variety of sports that are rarely broadcast to any platform. There are roughly 4,000 postseason events annually per state that usually are not seen anywhere on TV or online.
Rudolph is working feverishly to acquire the rights to all postseason games not already under contract. Those rights cost anywhere from $30,000 to $150,000 a year per state, depending on the state and number of games, and the network is seeking a five-year commitment from each state.
Most high school associations have media deals to broadcast the championship games in football, basketball and some Olympic sports, but very few of the games leading up to the finals are broadcast anywhere. That’s where Rudolph sees a sweet spot for the network.
PlayOn! has built a production infrastructure capable of broadcasting 80 events at the same time, all in high definition. The company owns 30 HD production trucks or vans, and another 50 video “fly packs” — rental production units — that enable students, high school staff or parents to broadcast games themselves.
Subscribers to the NFHS Network would have the ability to pick whichever game they want to watch, either live or from an archive. Analysis and highlights also would be part of the content offerings.
Beginning at its launch in August, playonsports.com will be rebranded to NFHSnetwork.com. The NFHS Network will be a completely new LLC.
“Like Netflix, it’s about being able to watch whatever you want, whenever you want,” Rudolph said. “High school sports all together generate three times the attendance of pro and college sports combined. It’s a huge marketplace, but it’s just really spread out. We’ve put in a ton of effort to achieve scale so that this will be attractive to consumers and advertisers.”
He’s hopeful, as an NFHS partner, that the network achieves the scale that’s been so elusive over the years, but he understands the challenge. He’s been down this road trying to aggregate high school sponsorship rights.
“It’s a very ambitious attempt,” Fitzpatrick said. “It’s a great signal from the NFHS that they’re taking this step to provide something so unique for its membership. Having said that, the world of media rights is complex. We’re just waiting to see how it unrolls and how it’s distributed. I’m in this world, so the more eyeballs on high school, the better.”
Rudolph has thought about a high school network for years, going back to his time at Turner Broadcasting. The Georgia Tech grad oversaw Turner South and eventually led strategic planning and new product development at Turner as a senior vice president before buying PlayOn!, a Turner property, away from the company in 2008 and making high school sports its full-time focus.
It was just last year, however, that he began serious talks with the NFHS. In a relatively short time — from last August until now — those talks have turned into a serious business plan. Writing a business plan for a network is nothing new to Rudolph, who at 26 years old wrote the business plan for Turner South and launched the regional network in 1999.
His plan for the NFHS Network projects top-line revenue of $100 million a year within five years, with 70 percent coming from consumer subscriptions and 30 percent from advertising and sponsorships.
The $70 million in annual subscription revenue is based on the targeted 1 million consumers (20,000 per state) paying $6 a month. Rudolph emphasizes that the business plan doesn’t include any revenue from traditional TV distribution fees.
“The subscription model is the most viable,” Berke said. “To get enough mass, you’ve got to have thousands and thousands of communities that might subscribe. That’s really stringing it together. That’s a lot of parents and grandparents signing on. For advertisers, that’s the only way you’ll achieve the mass to make it worthwhile. A linear TV channel, now that’s a really tough row to hoe. The distributors are already offering up high school sports and some of them [Time Warner and Comcast, as two examples] are doing it themselves. And then you’ve got ESPN cherry-picking the best events.”
The network will be based in PlayOn! Sports’ Atlanta offices and a five-person board of directors will be charged with its oversight. Three board positions will come from the state high school associations, and two will come from PlayOn! Sports.
Because the state high school associations have an ownership stake in the network, they theoretically will be motivated to move as many championship events as possible to the NFHS Network.
The sponsorship and advertising roles are still being worked out. HTM has the relationship with the NFHS, while Melt, an Atlanta-based event and marketing firm, is the agency of record for PlayOn! Sports.
“It’s a national inventory model, but it’s also something that can be customized down to a regional, state or local level,” said Vince Thompson, Melt’s CEO. He identified insurance, auto, wireless and health care as just a few of several categories that will be mined.
PlayOn! has sold title sponsorships to its game broadcasts in the past, but HTM also sells sponsorships to the championship events in most states.
Navigating those relationships so that there’s no conflict will be one of the challenges in the coming months.