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SBJ/Jan. 13-19, 2014/Media
Sony, WWE extend MLBAM’s non-baseball business
Published January 13, 2014, Page 6
Baseball’s digital arm in the interim steadily picked up other third-party streaming video and technology deals, including with Southwest Airlines, political pundit Glenn Beck, and youth sports programmer The Whistle (see related story). But the scope of last week’s two pacts means they represent seismic industry developments in their own right, as well as substantial boosts to MLBAM itself.
Sony’s as-yet-unnamed cloud TV service will attempt later this year to provide consumers a multichannel digital video subscription service combining live and on-demand content, but without a cable or satellite provider. WWE, meanwhile, on Feb. 24 will launch the WWE Network, a full-time, over-the-top digital network including all of the pro wrestling property’s popular pay-per-view specials at just $9.99 a month. MLBAM will provide the back-end video infrastructure for both efforts, each many months in development.
“Great content needs great distribution,” Bowman said at last week’s WWE event in Las Vegas announcing the network. “[WWE Chairman and CEO] Vince McMahon and WWE over the years have been at the forefront of content distribution, from pay-per-view to cable to their website to mobile and social media. But today, in 2014, distribution is very different than even two years ago.”
Bowman has held a long history with McMahon and WWE, and served on the property’s board of directors from 2003 to ’08.
Financial terms were not disclosed for either deal. But the agreements no doubt represent a boon for an MLBAM operation that last year surpassed $630 million in annual revenue; will see further, significant revenue growth in 2014 with the implementation of new national media deals with Fox, ESPN and Turner; and represents a major driver in rising baseball franchise values since each team owner holds a 1/30th share in the outfit.
About six years ago, MLBAM began to move away from handling consumer-facing digital operations for non-baseball properties such as Major League Soccer and AVP Beach Volleyball. Instead, it shifted its non-baseball efforts toward a business-to-business model in which it supported back-end operations and application development for other entities, buttressing its own 12 years of success streaming MLB games to computers, then to mobile and eventually hundreds of connected devices.
After a steady buildup of clients, most notably ESPN, the company now streams video for more than 25,000 events in total annually, only a fraction of which are baseball games. That number now promises to grow substantially with the arrival of Sony and WWE.
“These are massive undertakings, providing full 24/7 live and VOD content on a scale like this,” Bowman said. “But to be on the ground floor of interesting undertakings like this that are completely rethinking how consumers access content is very attractive to us.”
The arrival of Sony and WWE also will accelerate efforts for MLBAM to expand its physical infrastructure to handle the encoding and delivery of the additional video content. Prior to these deals, MLBAM last year opened a new data center in Omaha. MLBAM remains based in New York, but the Omaha facility will soon become the epicenter for its video content delivery.