Sports on mobile: Driving more revenue through personalization

I am a long suffering Mets fan; too young to have celebrated Bill Buckner's 1986 error leading to a World Championship but just old enough to still bitterly recall consecutively missing the playoffs on the last day of two recent seasons.

As a glutton for punishment I continued my Mets fandom after moving to Boston in lieu of the Red Sox and the two championships they have won since I arrived. Living here I can read box scores or watch SportsCenter but it's not the same.

Fortunately for me, I now have many options to watch the Mets which either tether me or free me from my home because sports--unlike most major media--have made a graceful transition to distributing content on the TV, Internet or mobile device.

My first choice is MLB's pay TV option, Extra Innings. But being tethered to my house and paying $179 on Verizon FiOS is a bit steep. I can opt for the online service--MLB.TV--which allows me to watch every baseball game online in HD for $119.95. Add to that cost the MLB at Bat iPhone app which allows me to watch games on my iPhone via 3G or WiFi for $14.99 and I have invested nearly $135. This is not an insubstantial sum and clearly limits the attractiveness of the offering. While per day and per month options are available they simple increase the per game cost while lowering total cost of viewership.

Baseball is not alone in this all-you-can-eat model; the NFL has an app available on most mobile platforms through its pay TV partner DirecTV offering all games to subscribers of NFL Sunday Ticket at a cost of at least $300. Early in the season the NBA has released its own application for $39.99 offering up to 40 live streamed games per week. Just last month the NCAA offered its March Madness application for $9.99 which allowed me to enjoy the ecstasy of having picked Kansas State instead of Kansas until I was writhing in agony when their loss busted my bracket. And no Kansas State, I'm still not over it.

Now, the cost of these applications/services may seem small. Ten dollars here, thirty dollars there. But, when taken in totality the cost of watching sports adds up over the years. MLB has increased the cost of its MLB iPhone application over the last two years. Ditto for the NCAA. While features have improved dramatically by offering streaming over 3G, better quality content, and more the one area that remains unaltered is the business model.

The mobile device is the most personal gadget that we own. We customize the background, ringtones, pictures, icons and apps. So, why should the services we subscribe to be any less personal? Mobile sports should be offered in the a la carte fashion consumers have long desired from their pay TV provider.

The ability to personalize an experience was one of the findings of my most recent report, March Gladness--which evaluated what publishers and content owners can learn from sports leagues to successfully transition to the mobile device.

However, there is a lesson for sports leagues as well: allow for customization and hyper-personalized offerings in addition to all-you-can-eat models.

This not only makes the product more attractive to a wider audience but it helps create targeted segmentation for advertising. Why shouldn't a fan just be able to purchase the games they want to see?

Personalization offers a world of interesting opportunity, even for fans that can watch the games/events on TV. Golf fans could choose a particular golfer to watch during the entire tournament. Villanova fans could watch just the Nova games during March Madness.

The reduced price would attract more subscribers who in turn would serve as viral marketers for the services. While cannibalization of more expensive packages will occur, by offering enhanced innovations--such as watching your fantasy team players would entice subscribers to opt for the more expensive service. This would grow the total revenue pie.

Now, there are a few issues with this ideal scenario:

• Is implementing the technology to enable such personalization going to result in enough revenue to justify the expense?
• Will not having announcers at every hole of a golf tournament make users less interested in watching the action?
• Will fans that buy a personalized package miss out on the additional functionality the broader offering affords?
• How much cheaper will a single team/single player solution be?
• How will rights issues impact the flexibility of business models?

The rights issues must be worked out and leagues would be wise to follow the lead of MLB by finding a way to broadcast all games, but even if not available clearly spelling out what games are available will allow consumers to make informed decisions.

Mobile content is still in its infancy, but the ability to quickly grow revenue and subscribers is only limited by the availability of content. Will MLB risk losing some all-you-can-eat subscribers by offering a team specific package? Absolutely. But it is easier to wrest $50 from more a consumer's hands year in and year out than it is $130.

Leagues cannot view revenue as a one year opportunity but instead they must approach mobile with long term ambitions and planning. Leagues want consumers to buy these services every year and having a larger pool of potential clients is a start to building a long term sustainable business. By offering personalized packages leagues will find more willing buyers and ultimately more long term revenue.

Josh Martin is a senior analyst for wireless media services in the Global Wireless Practice of Strategy Analytics.