Technology, particularly mobile and its widespread adoption across both enterprise and consumer sectors, is creating change, and quickly. Ubiquitous data capture, wearable technologies, big data analytics, social media, The Internet of Things (IoT) and the idea of the ‘quantified self’ are all playing their part in this change we’re experiencing.
But for more traditional industries such as media, publishing and content distribution, the rate of change many players in this space have executed has often been criticized, and perhaps for good reason.
Why?
Because the way we now interact with information, and are stimulated by information is different.
And although we are exposed to thousands or marketing messages per day, we are now somewhat empowered to filter through and strategically source that which truly interests us.
Organizations like the MLB Advanced Media (MLBAM) have taken advantage of this.
CBS, in a segment dubbed “How Technology Became MLB’s MVP” called MLBAM one of the tech world’s top players and I don’t think that call is too far off the mark. With projected revenues to hit at least $1 billion by the end of 2016, IPO speculations have long been on the cards.
But how does MLBAM generate all this revenue? Let’s provide some context by giving a bit of back-story.
Launched back in the height of the dot-com boom, MLB Advanced Media released MLB.com with the backing of all 30 Major League Baseball clubs. The initial agreement would see each club invest $1 million per year for four years to fund the establishment, growth, and path to profitability of the MLBAM.
Much to the pleasure of key stakeholders, including the 30 MLB clubs, by 2003, MLBAM had begun generating excess revenue which meant only $70-75 million had to be invested. The board of directors are expecting a dividend of $7-8 million for each club in 2014.
This initial arrangement was fueled by the desire to power each of the clubs websites, but has since become much, much more, with today’s primary value proposition now residing in subscription services, and of course mobile, with access available for over 3,500 devices.
In the CBS interview mentioned above, MLBAM’s CEO Robert Bowman discussed the struggle to remain relevant in this age and the true appreciation that MLBAM has for their users time.
“We don’t need all your time, but give us ten minutes and we will over-deliver,” Bowman said in the interview.
With today’s consumers spoilt for choice, the capability for any organization to deliver a highly valuable and engaging experience is absolutely paramount. From both the words of Bowman, and the actions and execution of MLBAM’s technology, it is clear that they understand this.
MLBAM now has a diverse suite of products and services for both consumers and enterprise customers. But this suite of products was built incrementally around experiments, rather than more traditional structured planning.
Bowman speaks of starting out and knowing ‘absolutely nothing’ about what would, or wouldn’t work. And as such, the MLBAM experimented with numerous capabilities, measured the success of each effort and scaled what worked.
These types of methodologies that surround building business models have more recently been dubbed evidence-based entrepreneurship (funnily enough, this is sometimes referred to as money-ball for startups), or Lean Startup, with a focus on validating customer value as early as possible.
Due to MLBAM’s constant focus on building their business and products around customer value, their success, although never guaranteed, was thoughtfully designed and effectively executed. With this in mind, the argument can be made that MLBAM has shaped the value proposition of the modern sports media landscape.
But, the question that is of significantly higher interest is how they (or others) will shape the sports media and technology landscape of the future?
My prediction is that sports media, like many other industries will become highly contextual and personalized. It will deliver desired value to users based on the context of their historic, real-time and predicted environment.
This will occur via the furthered development of Artificially Intelligent or machine-learning technologies, advancements to big data analytics, elements of the above mentioned ‘quantified self’ (from both athletes and consumers), more reliance on mobile and social, and perhaps even the likes of augmented reality.
As has been the case since the arrival of the Internet, this presents a challenge for existing incumbents, but for the likes of MLBAM, I believe it presents a significant opportunity to further diversify their product suite, client base and the overall value they deliver to millions of consumers in the US and beyond.