There’s a false dichotomy that makes its way into conversations about media strategy about whether it’s best to have a paid content strategy or one that rests on advertising support. In a conversation with paidContent editor Staci D. Kramer at the kick off of pC Mobile 2011 conference, Major League Baseball Advanced Media CEO Bob Bowman says they’re not mutually exclusive.
“Everybody would like to have a paid content strategy and free one,” he said. “You need one to drive awareness, ad revenue and the other drive scale and to make more money.” You’ve now passed $500 million in revenue. “That’s what they say.”
IPO unlikely: The topic of IPO’s is also becoming more of a popular option for media companies trying to grow their businesses over the past year. That topic was floated years ago for MLBAM and at this point, it’s an unlikely route. “An IPO is up to the commissioner and I think the answer is no,” Bowman said. “We’re focused on becoming a good company, not a good stock. It’s not our decision. I guess there’s a reason to go public: to pay off owners or to be able to add capital to invest in the business. We have plenty of investment in our business.”
Competition: Although there’s a lot of places fans can go for baseball news and updates, there are other things vying for fans attention and it’s not just other sports sites. “We have beacoup buckets of competition and we’d think it would be great if they all stand down,” Bowman said, grinning. “It’s not just sports. We have eight minutes in the morning and there’s a lot of other things that are making demands on people’s time. You can’t get dollars from someone unless you capture their attention. We try to get people to go to a baseball game. Not only is it TiVo (NSDQ: TIVO) proof because it’s a live event, but it makes them a better fan. And after that, you might go to one of the team’s websites. That’s how it works.”
Apple (NSDQ: AAPL) as a partner: Apple has been a great partner, but not a perfect partner, Bowman said. But it’s the panoply of systems from Android that presents the greater challenge in some ways. “Whether it’s Verizon or AT&T (NYSE: T), you’re in the same church with Apple,” he said. “But with Android, we have to build another system. Then you throw in another tablet and that’s another system to build. And it gets expensive. Being on Android is two- to three times more expensive because of the fragmentation [of devices running that system].” In terms of the 30 percent revenue cut that Apple gets, Bowman concedes that Apple has a good argument for it. “We didn’t invent the iPad and they’ve been a pretty darn good partner. I wish it were lower. But it’s hard to complain.”
Tablets = growth: The biggest growth of MLBAM’s business is, naturally enough, in tablets right now. “It not only has a much wider audience than it did a year ago, but it’s become the object of choice for people who would buy the kind of rich content we have.”
Live video ad inserts launching: MLBAM makes more money from subscriptions than advertising, but that’s shifting a bit. (Bowman wouldn’t provide specific on the growth rates there, beyond saying it’s “substantial” and in the double digits. As a result, MLBAM recently chose Auditude to build a rich media ad serving platform for inserting live ads. “That system will be rolling out this month, much to our fans delight,” Bowman said. “Baseball has natural breaks, so it shouldn’t be too painful. The reason we’re doing this from scratch is due to the fact that no one does live video ad insertion. And it makes sense to build it to our needs.”