MLB Advanced Media Case
Major League Baseball has been an industry leader in the digital space for athletic entertainment, thanks to the launch of Baseball Advanced Media (BAM) in 2009. Once the organization took off and grew, it began branching out and offering its content in a variety of channels and platforms. Careful consideration had been given on each of these platforms, but the organization considered itself to be a risk-taker and a first-mover for its industry. Now, with the launch of Apple’s iPad in 2010, BAM was faced with different and complex issues concerning a BAM application for the device. Would they invest the resources to create an app? Would this app be different from existing apps, such as At Bat for the iPhone and iPod touch? How does this addition improve the portfolio of offerings, and does this cannibalize other sources of revenue for BAM? 2.
BAM has experienced tremendous growth since its inception, and has come to be known as an industry leader and overall content delivery model for others to aspire to be. Their content generation leads to increased revenues and partnerships, which leads to more features and options, which leads to more passionate fans and employees, which leads to more innovation. This virtuous cycle has allowed BAM to achieve substantial revenues from its four major sources. The first is their Ticket Sales, which account for 39% of total revenues. Over 30 million tickets were sold online last year (at the time of the case), which is more than a third of the overall baseball attendance. This ticket sale dominance grew substantially with the acquisition of Tickets.com, and a five-year partnership with Stubhub.com. Through these mediums, MLB and BAM removed the uneasiness and uncertainty associated with scalping tickets and created an official secondary market for reselling MLB tickets. When a fan enters the game, the clubs also make a lot of money on things like concessions and merchandise sales. Because of this, Ticket Sales is one of their greatest strengths (key driver), but is also one of the biggest areas that can be seen as a threat. As the content and experience of online and mobile products increases, the desire and willingness to pay for going to the actual stadium decreases. The MLB must work closely BAM to ensure that the two are not in direct competition with each other. The next is their paid-content model, which attributes about 31% to the company’s overall revenues. This, as discussed later in the paper, has been a great strength for BAM. If they are not constantly pursuing innovative and novel ideas and products, this will become a huge threat. BAM also benefits from Merchandizing and Advertising/Sponsorships, which account for the remaining sources of revenue. A key driver going forward will be to continue partnering and aligning with major players in the industry to not only leverage their content and expertise, but also to subdue any potential competitive products from seriously posing a threat to market share. 3.
BAM seeks to serve MLB fans of all walks of life. Whether it’s the Cardinals fan that wants to get audio coverage of a game that can’t attend, or the business executive that needs a quick update on how his Twins are doing during a meeting, BAM’s products seek to address a variety of fan lifestyles. For the die-hard fan that never wants to miss any of the action, MLB.TV gives fans incredible value by being able to watch any game out-of-market at any time, watch up to 4 games at once, or even get a 10-12 minute condensed version. MLB.TV reaches out to the more active fan that seeks to dedicate a large amount of their time to their MLB allegiance. For the fan that is passionate about the sport and/or their favorite team but doesn’t have a large amount of time to sit through 9 innings, there is MLB.com. On this website, fans can view scores, statistics, schedules, standings, get links to individual team...
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