Catching the Future

Athletic Management, 16.2, February/March 2004,

New media technology may revolutionize how fans watch sports. Will it be a challenge or an opportunity for your athletic department?

By Dr. James Santomier and Dr. Joshua Shuart
James Santomier, PhD, is a Professor in the College of Business and Director of the Sport Management Program at Sacred Heart University. Joshua Shuart, PhD, is an Assistant Professor at Sacred Heart's College of Business.

If you asked your athletic department's most loyal fans what they would like to know about your teams, what would they say? In all likelihood, there would be many different answers. Some people might want to see the most current scores, some might like to read background information about your student-athletes, and some might want to watch video footage of last week's game.

With "new media," you actually can provide all that information at once. New media--the Internet, wireless technology, and interactive TV--have already changed the way fans consume sports news, statistics, and events. In fact, sport fans are among the most eager users of these new technologies.

There are two fundamental factors that distinguish new media. First, they allow information to be transmitted across the Internet and be accessible virtually anywhere in the world. Second, these media are interactive. New media integrate text, images and sound, giving users the ability to choose how and when they want to consume information.

To be an effective administrator in the future, you will need to understand and integrate new media functions into your athletic department's operations. This article provides what you need to know to stay ahead of the complex, ever-changing, new media curve.


One of the most important new media technologies for athletics is Video Image Compression. This enables a given message, such as a television picture, to be converted from an analog signal to a series of digitized images, which can be quickly transmitted over the Internet. It requires a much smaller transmission capacity than an analog signal.

This development is what allows video streaming--the ability to broadcast live action from your men's basketball game onto computer screens all over the world. It also allows viewers to save the broadcast to their computer's hard drive or to DVDs. (Another result of the technology is that more channels can be offered on cable TV systems.)

However, in order for fans to receive these compressed images, high speed broadband Internet access is needed. More than 40 million households in the U.S. will have broadband access to the Internet by the end of 2004, but it is not yet available in all geographic areas, and many consumers do not feel it is worth the cost. Broadband averages approximately $40 per month vs. $19 or less per month for dial-up. Also, research indicates that consumers will not pay for simply faster-loading Web sites, which means that Internet sites must provide consumers with exceptionally personalized and interactive content.

However, prices may soon drop as this high-speed connection is drastically changing the way in which the movie, music, telephone, computer, and cable businesses operate. Cable companies are positioning themselves to take a large share of the traditional phone business in 2004 by using Internet technology to deliver voice calls over cable lines. And the phone companies are planning to offer bundled services and lower-cost Internet calling to attract customers.

Digital content may be distributed in several ways: through asynchronous digital subscriber lines (DSL), cable modems, digital cell phones, and advanced wireless networking. Wireless communication may be the transmission trend of the future. Users of Personal Digital Assistants (PDA) in the U.S. consider wireless-enabled devices to be second only to e-mail for receiving sports news and scores.

Some U.S. stadiums are being equipped with wireless devices to allow fans to I.M. (Instant Message) friends, order food and drinks, and request personalized video replays. The key point here is that wireless connectivity content, delivered anywhere via the wireless Internet, will prove to be a key to boosting average revenue per user.

Right now, however, only about 10 percent of all mobile phone subscribers have web-enabled phones, and making money from sports-related content has proven to be a challenge. The good news is that research conducted recently by Gartner, Inc., indicated that cellular carriers added over 4.4 million customers in the second and third quarters of 2003. This is, in part, due to new family and teen plans, and new services like text messaging and photo sending. Evidently Nextel sees a bright future in sport markets, as it closed a sponsorship deal with NASCAR worth $750B over 10 years in June 2003.


While transmission is key to new media, so are the tools used to obtain and display content. Access and display of digital communications is undergoing rapid transformation through personal digital assistants (PDAs), electronic books, smart phones, wearable computers, and HDTV technology. These formats are continually falling in price, becoming increasingly portable, and providing enhanced resolution.

Other new media technologies allow videographers to better capture the action of a sporting event in a digital format. The at-home spectator can then feel more like he or she is at the game, which is especially important for hard-to-video games like ice hockey and soccer.

Just as important for athletic administrators is how new media hardware and software affect obtaining and sending of content. New technologies include digital audio recorders, digital video and mega-pixel still cameras. Digital video and audio editing software tools are becoming more user-friendly as are graphics applications such as Adobe Photoshop. Web-development tools and applications such as Macromedia's Dreamweaver have contributed to the development of sophisticated Web sites for many sports organizations. Increasingly, these tools are available to run on low-cost, portable devices, such as PDAs and cell phones.


Transmitting and receiving data may not be the most exciting concepts to a non-techie, but what they can provide is exciting to every athletic administrator and sports fan: interactive content. Interactivity means the user gets to choose among options that enhance his or her viewing. And the provider gets to customize its digital communications.

One only need to look at a few current examples in the sporting landscape to see that interactivity is at the forefront of nearly every new media endeavor. The Web site announced recently that over 55 million people had voted for the 2004 Pro Bowl game through its online ballot. The league is excited that fans regularly check the site for live game updates and play its version of fantasy football. These efforts continue to enhance the NFL's branding initiative, focusing on the wants of its fans. Embracing the technology has helped the NFL to grow faster than any other major professional team-sports league.

It is only a matter of time before sports networks respond to the new media and begin to incorporate elements of Interactive TV (iTV) into their broadcasts of collegiate athletics. For example, a digital video broadcast of an intercollegiate football game could include linear narrative, images of the game's action, and additional content available on demand. The sports fan could use a mouse, remote control stick, or voice command to access additional footage or a promotion for licensed merchandise. All this allows the athletic department to layer much richer content into its broadcasts than is currently available, therefore enhancing the value of its broadcast and its brand.

A leader in Sport iTV is the NDS Company, which enables broadcasters, network operators, and content providers to profit from innovative interactive applications. For example, NDS created an interactive sports application specifically for the 2002 FIFA Soccer World Cup, where viewers, while watching a game, could vote for their favorite team, choose multiple camera angles, access match statistics, and view match highlights.


One of the most radical elements of new media, however, is how they can change who controls what is broadcast to sports consumers. Essentially, any sport enterprise that can produce digital images can also broadcast these images to a virtually limitless audience, allowing an athletic department to provide entertainment directly to its stakeholders. This increases the college's control over broadcast revenues, as well as other residuals that were previously controlled by cable companies and television networks.

This fundamental shift in the balance of power could drastically reduce the influence that television networks hold over sport. If it occurs at the professional sport level, intercollegiate athletics will most likely follow. Media companies will then face increasingly larger obstacles in retaining sport content and will need to adopt flexible rights strategies as sport teams exercise greater autonomy and control over content distribution.

Some media giants are preparing for this reality. ESPN's Digital Centre is a two-year building and technology project that should be completed later this year. This new business unit will tie together a lot of ESPN's new media initiatives and position it for the future of TV. This could lead to synergistic opportunities with college athletic departments of all sizes.


Put together faster transmission, more advanced hardware and software, enhanced interactivity, and an athletic department's ability to control the content its fans receive, and more revenue can't be far behind. E-commerce is the most obvious revenue source of new media, and it continues to grow. The total value of online sports-related advertising and e-commerce could reach $4 billion in 2004.

According to some analysts, for many major sports, overall online revenues will account for at least 25 percent of their total revenues. Also, considering that increased usage of broadband by consumers in general results in increased buying, this is likely to carry over into collegiate athletics. During the 2003 holiday buying season, U.S. consumers spent a record $12.9 billion via the Internet from Nov. 1 through Dec. 26, up 23 percent from the same period in 2002. E-tailers have an appealing formula: Keep it simple and open for business 24 hours a day.

But there are other ways to see revenues through sports-related broadband distribution. For example, advertising, sponsorships, content syndication, pay-per-view, subscription, and gaming (including fantasy sports) are all proving to be successful ventures.


Probably the most significant opportunity for sport presented by new media is their ability to develop a deeper relationship with sports consumers. The sports broadcast environment is undergoing dynamic restructuring, and the relationship among athletic teams, broadcasters, marketing and technology companies, traditional media, athletes, and fans, will be significantly different in the future. Athletic administrators will want to understand this shift in the balance of power and use it to their advantage.

The opportunity to better connect with fans, increase exposure of less visible sports, find new audiences, and create dedicated communities of fans is just around the corner. And, in the long run, these opportunities will have great financial value.

One key issue that may impede the development of new revenue streams is that most intercollegiate athletic departments are still struggling to meet the needs of all of their constituencies. That's why it's important to develop a strategic plan around new media opportunities. Athletic administrators should be prepared to identify new media resources and what benefits they may provide to their departments. Most importantly, athletic administrators must realize that, although new media are complex, with intelligent and rational strategic planning and e-business implementation, they allow for maximum adaptation to environmental changes.

The radical change from the old "lean back" couch potato culture to the new "lean forward" computer culture will revolutionize the way we consume sport on all levels. And it will ultimately force sports producers and athletic administrators to rethink how they provide fans with content.


On a Smaller Scale

How do new media affect the small-school athletic director? You might be tempted to think that interactivity, broadband, and rights ownership only relates to schools that bring in large amounts of revenue. But new media also affect smaller schools at both the high school and college levels.

No matter how large or small your school, the heightened interactivity and improved image quality of new media will likely increase the audience for your sporting events, especially for your lower-profile teams. As the technology becomes more sophisticated and prices drop on the hardware and software needed to record and edit a sports event, it will become less expensive to upload your video onto the Internet, where it can easily be seen by new fans and parents.

In addition, you can potentially use the new media to streamline your fund-raising efforts. Interactive digital sport yearbooks could be the wave of the future, and parents may soon be willing to pay for the convenience of getting their child's stats from a game through their PDA.

And don't count out the sports media giants when it comes to your school in the future. ESPN and other networks are regularly pushing the envelope in terms of their programming. Last year, ESPN televised several basketball games featuring prep basketball star LeBron James' high school team, which led almost immediately to a pay-per-view demand to see more of James' games. This year, ESPN continues to expose in-demand high school athletes, broadcasting games featuring Sebastian Telfair of Abraham Lincoln High School in New York. While coming under fire by some critics for exploiting underage athletes, networks contend that they are simply delivering what the public wants.

However, beyond just game coverage, high school athletes are now regularly the subjects of documentary "reality" shows, covered extensively on sports Web sites, and the center of many online and wireless fan polls.

For athletic directors who think that new media are exclusive to high revenue sports, you might want to think again. New media are becoming more and more accessible, and even if video streaming is the farthest thing from your mind right now, it may not be in five years. So start understanding the lingo and get your Web site up now, before an opportunity passes you by.