Athletic Management, 16.2, February/March 2004, http://www.momentummedia.com/articles/am/am1602/newmedia.htm
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.
TRANSMISSION
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.
TOOLS FOR DISPLAY
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.
INTERACTIVITY
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 NFL.com 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.
RIGHTS
OWNERSHIP
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.
REVENUE
STREAMS
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.
DEVELOPING STRATEGIES
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.
sidebar:
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.