YES Network, MLBAM Break In-Market Streaming Barrier

By Carolyn Braff

On June 24, The YES Network, Cablevision, and MLB Advanced Media took a giant leap toward uniting old and new media. Beginning July 8, customers who already receive the YES Network as a Cablevision subscriber can purchase a package of the network’s Yankees game telecasts to watch live online, anywhere in YES’s four-state territory. This deal — sure to be the first of many — marks the only live in-market–streaming product in professional sports to include games with local-television rights.

“This is a landmark deal,” explains Tracy Dolgin, president/CEO of the YES Network. “As YES moves into true convergence of old and new media, we’ve been very, very careful in crafting a deal that respects our partners’ business models on the content side, on the advertising side, and, very importantly, on our distributor side. Not only is it going to respect their old business models, but it will enhance new business prospects for all of us.”

Additive Access

Fans who purchase the Yankees on Yes live-streaming package already have access to the games, since the product is available only to Cablevision subscribers. The value of the package, therefore, is not necessarily access to the games but the convenience of accessing those games from any computer or WiFi hotspot.

“What they’re paying for here is the portability, convenience, and feature set that comes along with an online offering,” Dolgin says. “This deal is really all about choice. Fans can continue to watch the Yankees on the YES network at no additional cost, or, if they want the convenience and portability that live streaming provides, they can subscribe to this package.”

The deal was initially struck with Cablevision because it is the largest cable operator within the YES Network’s footprint. However, YES is in discussions with multiple other operators and distribution partners, including Time Warner Cable, to craft similar deals.

Subscribers to Cablevision — which operates the Optimum Online Internet service — can use the streaming product anywhere within the network’s footprint, no matter what broadband provider their computer relies on. An authentication system requires users to log in using their Optimum Online account information, but a single user can log in from a laptop at home one night and from an office computer the following afternoon, even if the office does not use Optimum Online for Internet access.

Picking a Price Tag

To properly price the product, the YES Network tapped MLBAM’s experience in the marketplace. Yankees on YES live game streaming will be available beginning July 8 priced at $49.95 for the remainder of the season or $19.95 for any 30-day period. MLBAM’s full-season MLB.tv out-of-market package starts at $109 for the season. With the season midpoint on July 8, the YES Network product is prorated, at half the price of a full out-of-market subscription.

“We know full well that there is a great demand for an in-market product in every city, and we presume from that that there will be a great demand in New York City,” says MLBAM CEO Bob Bowman. “In our talking to Yankee fans around the country and here in New York, we think we’ve hit the right price, and we think the majority of people will sign up in the $49.95 option versus the monthly option.”

The Features Market

The fantasy Player Tracker and other features available in the MLB.tv product will not be included in the Yankees on YES live game streaming, mostly because they do not make sense for a single-team product. However, fans can expect to see feature sets debut in upcoming seasons.

“We’re going to be working with YES to create a new feature set for in-market streaming,” Bowman says. “I think there will be different features that in-market fans would rather see than what out-of-market fans have. But the principal feature set is true hi-def streaming.”

For the 2009 season, the online stream will be identical to the television broadcast, including the commercials. In future years, with enough users and some cooperation from Nielsen, Dolgin hopes to be able to sell separate advertising to insert into the online stream.

No Gravy Yet

Although no new production personnel are required to produce the online feed, plenty of additional equipment, resources, and training are necessary to send the stream live.

“Aside from the fiber that we have in and out, everything else is additional,” Bowman says. “It’s a new feed, a new encoder, new monitors, new customer-service people. There’s no new rent, but virtually everything else is additional. It is a unique product with an education effort with customers and fans that we really can’t duplicate.”

As more teams offer in-market streaming, the per-game costs will go down for MLBAM. But until then, substantial costs are involved in both offering the stream and educating the public on how to access it. To maximize that access, the Yankees on YES streaming portal is available through three sites: Yankees.com, YESNetwork.com, and Optimum.net.

Taking It on the Road

Not every Major League Baseball team has a stake in a regional sports network (RSN), so in-market–streaming deals at the other 29 clubs are sure to look slightly different. However, centralizing the feed and its management is most important to the deal, and MLBAM is prepared to be flexible as other teams get into the game.

“I think the structure that we’ve established initially here with YES allows us and recognizes the flexibility that we need,” Bowman says. “The deal might look slightly different — although [it has] the same overview — in different cities with different clubs and different relationships with RSNs. I think, as you see other clubs and other RSNs roll out deals in the ensuing weeks, we’ll be able to point that out more, but the concept necessarily allows for differences as we go across the country.”