The first discussion panel I attended at Friday’s Princeton Sports Symposium was on “Sports Business 2.0.”  The panelists were Christian Busch (Takkle.com), Hagos Mehreteab (yoonew), Doug Perlman (Accrue Sports and Entertainment Ventures) and Christopher Russo (Fantasy Sports Ventures).  Here are some of my notes from the discussion:

On the topic of monetization:

• There are three different models, which can all overlap depending on the specific business.  Advertising, Subscription, and Microtransactions. 
• Advertising is still powerful because the ads reach a young, male demographic, with a passionate association to the product. 
• Subscriptions tend to focus on valuable streaming content, such as niche or youth sports that would not be available for free elsewhere. 
• Microtransactions are situations where a basic service is free to use, but there are small, incremental costs for customizations and enhancements.

Some of the elements that are important for a viable subscription model are:

• Are there enough people willing to pay?
• Can you aggregate them and communicate with them?
• Can you offer a distinct value proposition?
• Is this content available somewhere else for free (e.g. Yahoo’s effect on fantasy sports – Yahoo offered it for free while ESPN/CBS continued to charge, and large numbers migrated to Yahoo because of it)
• If you use a “Free-mium” model (free basic service with additional paid premium services), how many can you convert from free to paid?  Industry average runs from 3-5%.

On the topic of mobile:

• Mobile should be used as another channel for engagement with existing users
• It is a very time-sensitive channel, but well suited for sports based on the combination of immediacy with passion
• The large number of different phones does make consistent application development a big challenge
• The big question is, when is the advertising model going to catch up?  This is very important in order to monetize mobile programs.
• Companies want to stay a half step ahead of the curve, but not three steps ahead (it could take too long for the consumer to catch up)
• Another challenge is that there is no direct revenue for the content owner, especially without ad-based revenue.

There were other topics covered as well (you can see some of the details on Lewis Howes’ Twitter page – he was live-twittering the panel).  I also asked a question about whether push or pull-based communication would be more effective for the mobile channel (assuming the used has first opted in).  The consensus was push can be much more effective (sending messages vs. viewing a WAP site), as long as you give the user full control over the types of messages they want to receive.  Finally, the panelists all seemed to agree that the “next big thing” was the convergence of mobile with video and social elements.

More posts later this week on some of the other panel discussions!

I’ve been using Twitter to help grow my network, get more exposure for the site, and look for interesting content.  Earlier today, I found a great article on NHL.com web traffic, courtesy of @detroitredwings. 

According to the article, “80 percent of visitors to NHL.com that watch videos return the next day.”  That’s an incredible repeat percentage.  Many organizations concentrate on how to get initial visitors, but repeat traffic is the key to developing loyal fans and customers, and clearly for the NHL, video is the most effective way to build this loyalty.  Video has been the biggest focus for the new NHL.com, from their free programming (game highlights, The Hockey Show, and more) to their new GameCenter Live product.

Another important takeaway from this is the value of engagement.  Too many entities focus on acquiring as many potential customers as possible, growing their database, and them immediately trying to convert those subscribers to revenue.  While generating revenue is the ultimate goal, there need to be an extra step between acquisition and monetization - engagement.  Provide additional value for your users, whether its video, games, or an “insider” newsletter.  The better you can engage your fans first, the greater that customer’s lifetime value will be.

A friend of mine passed along an interesting news story the other day.  SB Nation (short for SportsBlogs Nation, a group of over 150 team-based sports blogs) has recently obtained a “mid-seven-figure sum” of venture capital (TechCrunch, 10/29/08).  In light of the current economy, this is a substantial success for the “blogosphere.”  So what else does this funding tell us?

• Blogs are gaining more and more credibility in the public eye, taking traffic away from “traditional” websites. 
• This shift in web traffic will in turn have an impact on advertising rates that major sports websites can demand.
• Fans may trust blogs more than traditional sites because they are primarily run by other fans (although, if blogs become more corporate-owned, this could easily shift…something to keep an eye on).
• Teams/Leagues/Companies absolutely must monitor popular blogs that cover their team/league/company in order to stay in touch with what their fans are discussing.

Now I just need to find a way for TheBusinessOfSports.com to get some funding.  I’d settle for a ”mid-any-figure sum!”  Calling SB Nation – how about a new section on Sports Business??

Gonzaga is running a campaign called “Inspired Season” which is one of the most innovative and interactive marketing campaigns that I have seen.  Before you read any further, please go to www.inspiredseason.com and enter in your name and phone number to experience it for yourself (your information is kept private and is not used for additional marketing purposes, which is actually a BIG sacrifice on their part, as they could really grow their database with this campaign).

Now that you’ve experienced the video, what did you think?  I came away very impressed and the quality of the production and the message they chose to focus on.  You, the viewer, are the center of this campaign.  You come away from the video with a closer connection to the school and the women’s basketball program.  If I lived in the Washington area, I have to believe I would be much more inclined to come out to a game after watching this.

The campaign also has great viral potential.  I know that I emailed several friends and colleagues about this, and now I’m taking the time to write about it.  They give the viewer an easy way to share the video with others through social media link and an email link.  They might want to add other social networking links (MySpace, Delicious, etc.) or provide an easy form to email the video to others (which would also let them collect names and email addresses).  Even without these elements, the campaign is so unique and engaging that it should spread virally regardless.  Great job by Gonzaga – it won’t be long until other schools and teams copy their efforts.

Update: PartnershipActivation.com also wrote about this campaign recently, and the post includes the name of the partner agency (in case you are interested in exploring this type of campaign yourself).

I received an email yesterday announcing the launch of NHL GameCenter LIVE, the NHL’s new online streaming media service that will broadcast all of this season’s game live (hence the name).  The service seems to be modeled after MLB.tv, with a subscription costing $19.95 per month (this is an initial promotional price), and potential blackout restrictions applying for games televised in your local market.

This is GREAT news for the NHL.  To me, the number one problem holding the league back is a lack of public exposure.  Too many fans, both casual and dedicated, either do not get Versus or are not in the habit of searching for it.  Last year I thought that this type of service would be a great way to help fans get around the lack of TV exposure to watch the games conveniently on their computer.  I have little doubt that the more “hardcore” fans will flock to this service, generating a nice new revenue stream for the league.  I disagree slightly with the price point however.  This seems too high for the more casual fans, limiting the initial adoption and limiting the league’s chance for additional public exposure.  I would do two things right off the bat (or stick, in this case):

1.  Create a discounted full-season option (right now, the full-season is $159, which is the same as the monthly price for the length of the season).  Yes, you may lose a bit of revenue, but you will increase exposure which for the NHL simply needs to be a higher priority.

2.  Create two monthly price points with differentiated features, similar to what MLB.tv did.   The “premium” package can have better quality streams, the ability to aggregate multiple games on one screen, show additional camera angles, etc.  The dedicated fans will select this full-featured option, and the casual fans will be more likely to sign up through the lower price-point option.  Right now, I think they are going to miss out on a large percentage of the casual fans by only offering the full-featured package at the current price.

Even if they do not go with either of these suggestions, NHL GameCenter LIVE is still a big step forward for the league.  Their attendance numbers have continuously increase, so the interest is definitely there from the fans.  Now they need to capitalize on this growth and expand into the public light.  I believe that this will be a very good year for the NHL.

One of the most popular pages on any team’s website is the schedule page.  This make sense – your fans want to know when and where you are playing, so they can either go to the game or watch at home.  But what if your fans are really busy, and don’t have the time to look at the website all the time?  You need to get your schedule in the hands (or computers) of your fans and make it as convenient as possible for them to know when the next game is.  Passing out your foldout schedule cards is always a good tactic, but here are a few extra things you can do to make this happen a little easier.

• Make Outlook Calendar and Apple iCal files out of your team’s schedule and make them available to download off your website.  Now your schedule is on the fan’s computer and maybe even their mobile devices.
• Make a Google Calendar available online so fans can see the schedule on their own Google homepage.
• Use popular event calendar websites, particularly those local to your region like craigslist.org, eventful.com and upcoming.org to reach some of the more casual fans.
• Create desktop wallpapers that include the team’s schedule, so your fans can see the schedule every day on their desktop (take a look at the ASU Football wallpaper here as an example).
• Use mobile alerts, maybe through twitter.com, to remind fans about the game on game nights, and suggest how they can attend, watch, or listen to the game.

These are just some of the ways to make sure your schedule is viewed as much as possible.  The best part about these ideas is that they have no cost and take little time!  If you have other ideas, please share them in the comments.

Two of my former classmates from the Arizona State Sports Business MBA program have started a cheerleading-focused web business called Sideline Star.  I think the business has a lot of potential, so I asked Leslie Reedy (one of the co-founders) to tell us a bit more about the site:

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While some may argue that cheerleading should not be classified as a sport, there should be no doubt as to whether or not there is big business behind the activity.  There are over 14 million cheerleaders in the U.S. alone, accompanied by the coaches, vendors, choreographers, and admirers of the industry.  Similarly, marketers are drawn to this niche because cheerleaders are social creatures by nature and often very influential as far as purchasing. It only seems natural that this group should have their own online community, a place that understands who they are and what they want.

Bring It On-Line:  Social networking sites such as Myspace and Facebook have been met with widespread popularity in recent years.  While it would be easy to simply replicate the basic features, this does not guarantee that the staggering number of users will follow.  The competitive advantage of SidelineStar.com is its potential to serve their audience in a variety of new ways that are specific to this niche.  For example, this space will offer references for safety regulations, a cheerWIKI, calendaring systems for the squads, fundraising through “virtual bake sales” with customized team stores, recruiting tools for coaches, SMS text messaging and video downloading capabilities; these are just a few of the ways SidelineStar.com will differentiate itself from other social networking sites. 

Getting A Jump Start:  So we have knowledge of the industry and identified areas where SidelineStar.com could greatly benefit this market– now how can we begin to capitalize on the opportunity?  There are three equally important things that are critical for turning an idea on paper into a fully functioning organization: product, funding, and demand.  While these three things may certainly occur in any order, we have found that pursuing them simultaneously in stages is beneficial to what we are trying to accomplish.  By receiving a substantial amount of grant money from ASU’s Edson Student Entrepreneurial program, we were able to build the bulk of our product – the website – that will include some of the “sticky” features mentioned earlier. At the same time, management has invested a tremendous amount of sweat equity into marketing efforts, brand management, and awareness in order to drive traffic to the site.  As a result, we are able to showcase a product-in-progress with proven demand; in turn, investors are more likely to provide additional or 2nd round funding, which will enable further growth, and the cycle continues. 

Let’s GO 2.0:  The cheerleading market has been underserved in the interactive online community; everything has been static or 1.0…until now.  SidelineStar.com has several business development strategies that will assist in generating traffic, the primary driver for every one of our revenue streams.  One way we plan to accomplish this is by using other successful social networking sites to feed users to our site. In order to promote the launch of our site we will be having a contest where teams that use the tools on the site the most will be rewarded with more entries.  One team will be chosen each month to win prizes comprised of in-kind donations from our sponsors such as a Nintendo Wii and the new All Star Cheer Squad game.  We also host LIVE! Clinics where Sideline Star staff teach cheers and routines to young cheerleaders across the country and post their pictures and video performances online, which will prompt  them to create profiles and invite others to view them as well.  Sponsoring local, regional, and national competitions is another marketing strategy we look forward to starting in the near future. 

By driving high traffic figures, we also become highly visible to corporate sponsors.  It’s a well known fact that customer loyalty is important for any company, but a loyal customer with an influential reach can be extremely lucrative.  This is especially true when you realize the impact globalization is starting to have on the industry. Western cheerleading is already popular in countries such as China, where there were cheerleaders at every event during the Beijing Olympics this past August.  For reasons such as this, it is crucial to continually evolve strategies all while prioritizing and executing those things that will help us reach important benchmark goals.  However, we also know that our success is directly related to our knowledge of and passion for cheerleading, which makes us very excited about SidelineStar.com and what it can mean for the “sport.”

Leslie Reedy
CFO/COO of SidelineStar.com
Arizona State Sports Business MBA Program, Class of 2008

Here are my recommendations and quick picks for this week:

Book: Bleachers by John Grisham – This may not be a business book, but it is my favorite sports fiction book.  The story revolves around the passing of a legendary local high school football coach, and people coming back together to celebrate his life, even those who hated him.  The book does a great job showing how big an impact sports can have on people, even at such a small scale.

Website: Business Week’s Power 100- I wrote about this 2 weeks ago, and they have just released this year’s list.  I thought that David Stern (3rd) or George Bodenheimer (4th) would top the list this year, but they selected Tiger Woods.  It’s still a great choice – the only reason I didn’t think he’d be #1 was because of how long he’s been away from the public stage this year with the injury, but it wasn’t enough to keep him out of the top slot.

Team: The Chicago Cubs – You have (maybe) another year of disappointment for the most loyal fans in baseball, combined with the continuous process of the Tribune Company trying to sell the team.  The Cubs are an prime example of brand power – no matter how many times the team falls short, the fans keep coming back, and as a result, the team is one of the most valuable franchises in all of professional sports (even with the potential cost of renovating Wrigley Field).

Other: I’m going with a podcast this week – Marketing Edge by Provident Partners.  There are new episodes of this podcast every week, and while it’s gear towards traditional business, the content is just as applicable in sports.  They cover some great topics, including how to leverage new media, market research, social networking, and more.

Do you have a good “pick of the week?” Use the Contact Us link at the top of the page and send me your picks!

Are you looking for a unique way to drive interest in your products, whether they be collectibles, merchandise, tickets, or anything else?  Take a look at the website Woot.com.  Woot sells a fixed quantity of a single gadget every day, posting a new item for sale every night at midnight.  They also have two spinoff sites, shirt.woot.com and wine.woot.com, which logically sell shirts and wine (the shirts change daily and the wine changes twice a week).  The site has a cult-like following, with people staying up every night just to check the site every night for the next great deal.  They also have a very active forum-based community, which helps build a deep connection between the site and their customers.

So the question is, would this “deal of the day” model work in the sports world?  I think it would, depending on what products you sell.  I’ll use a basic professional franchise as an example.  The team could take one month of the season and run a Woot-like site and selling a new product at a discount every day.  One day it’s a t-shirt, then a jersey, then a mezzanine seat to next week’s game, then a bobblehead.  The idea of having a special item each day and changing that deal every night at midnight creates an exciting experience for your customers.  What’s today’s deal going to be?  Can I get it before they sell out?  I understand that there is only so much inventory to sell, so this would not be feasible long-term, but for a short-term jump in merchandise sales and to build some extra buzz for your organization, I do believe this would work.

This year, the Oakland Raiders created a site called The Raider Creator (www.raidercreator.com), which lets users take one of their own pictures, add the Raiders eye-patch, and create their own Raiders banner image.  Here is one that I put together pretty quickly:

I really liked this program for several reasons: 

• This is a great way to build a deeper brand connection with your fans, literally making their own image a part of the brand itself.
• The Raiders collect each participant’s email address, and then have an additional data collection opportunity by letting fans enter their image into a contest to be on a Raiders billboard.
• They give an easy way to share the image with others, and in turn, collecting the names and email address of the user’s friends.
• They’ve created a unique merchandising opportunity, by letting users purchase a mug, hat, or bumper sticker with their image.
• Finally, when you’re done with your image, you can “See Where You Can Sit” and buy tickets for an upcoming game.

The only thing this site is missing is the ability to share your Raider image via social networking sites (Facebook, MySpace, Blogs, etc.) which could make a service like this generate a more viral impact.  Regardless, it was a great idea and well executed.