A Digital Takeover?: Five Takeaways From Bob Bowman’s Interview With BTIG

As millions of viewers make the shift to — or are born into — a world of digital sports consumption, networks, leagues, media companies, and anyone else with a video product to sell or promote are looking to do so in a new way. In this space, Major League Baseball Advanced Media (MLBAM) has been a pioneer, a leader, and a visionary for the past decade.

MLBAM’s Bob Bowman (right) was interviewed by BTIG’s Richard Greenfield in a live-streamed interview on June 30.

MLBAM’s Bob Bowman (right) was interviewed by BTIG’s Richard Greenfield in a live-streamed interview on June 30.

Under the director of Bob Bowman, who was recently elevated to the role of president, business and media, for Major League Baseball, MLBAM has become a juggernaut, in both the business and technology sense, and it’s becoming more and more influential, providing the backend services for many non-baseball ventures, including the much hyped launch of HBO Now in April.

A couple of weeks ago, Bowman sat down for a streamed interview with Richard Greenfield, TMT analyst at BTIG, a global equity-trading and fund-services provider. In that interview from the MLBAM studios in New York, Bowman broke down both his business and the digital industry at large. Here are five things to be learned from the conversation.

1. Device Usage Is Generational, Not Situational
When it comes to determining when and where users will access digital content, some believe that it’s all about where the users are. Sure, they will watch video and browse digital content on the go, but, once they get home, they plop in front of the television set. Members of this group see the media world as the “best available screen.” They are the liberal-conservatives of the media space: they are not so naïve as to think everyone including your grandmother is going to watch next year’s Super Bowl on a phone but not so stuck in their ways as to cling to the TV set like a bible.

Bowman disagrees, however, with the “best screen available” crowd to an extent. In his eyes, it’s not where the user is when viewing content; it’s who the viewer is.

“It’s generational,” he said in the interview. “Everyone under 25 is using a device they can have in their hand or their lap. I think, for a lot of those above that, they are happy to use an Apple TV or Roku or PlayStation to watch their content. We’ve seen a big run-up in the Connected Devices on MLB.TV. It isn’t so much temporal like we originally thought: office means desktop, home means TV. It’s really not. It’s really generational.”

2, Churn Isn’t Necessarily a Bad Thing
Unsubscribes. Uninstalls. Cancellations. They are every media company’s worst nightmare. But should they be? Bowman sees them as an opportunity, especially in the beginning of a product launch.

Churn is a nasty word in people’s minds,” he explained, “but I would say, if you don’t have churn, then you are doing something wrong. Not everyone is going to love your product and your price. It’s impossible. You have to have churn.

“Some people don’t like the product, and you need to go and find what they didn’t like about the product. Some people didn’t like the price: obviously, too high.

“Let’s say you start with 100 people and churn out 40; sounds awful. I don’t know,” he added. “You’ve got 40 people now that you can have individual conversations with about why they churned out. Was it price? Was it the product? Did you not use it? What didn’t you know? That’s an invaluable resource for improving your product and finding out how do we win them back. Without churn, you don’t learn a lot.

“Now, after three years, sure, you don’t want your churn rate to be 40%, but, in that first year, that kind of number is completely expected. You’ve got to be driving a trial, and people are going to churn out, that’s just the way it is.”

3. The First Months Are Too Soon To Judge Your Platform, Good or Bad
The first few months of a product launch can be an exciting and stressful time. Everyone wants to get off to a good start, and many may be too quick to celebrate early success or mourn a slow start. As fast as the digital world moves, it will still take time to make your digital service a part of a user’s everyday life.

“No matter how good it is or if you are underwhelmed,” Bowman said, “it’s way too early in the first six to nine months. Even if you get massive numbers, it’s way too early. As hard as it is to believe, this is a business that takes 18, 24, 30 months to grow and develop so people come to rely on it.

“The best Internet businesses are those that people use every day. That’s one reason, frankly, why baseball was so fortunate: we play every day. There are no overnight successes in the Internet.”

4. The Internet Is Not Ready for a Large, Exclusive Live-Streaming Event
With each new major sports event — be it a Super Bowl, an Olympics, or a World Cup (an average 232,000 unique streamers watched the final on Fox Sports Go, a record for the app, and MLBAM provided the backend for ESPN’s Men’s World Cup streaming last year; the final pulled in a whopping 2 million-plus concurrents) — awareness and usage around digital platforms spike.

The Internet is great as one of a few selected sources for consuming a live event, but is it ready to be the only source? We may get a peek into that potential when the NFL exclusively streams a regular-season game between the Jacksonville Jaguars and the Buffalo Bills with Yahoo at the end of October. Bowman acknowledges that the industry still has a way to go before the Internet is capable of being the sole provider of a major live event.

“If it weren’t on TV and the concurrent number were 14, 15, 20 million, that would test the Internet for sure,” he said. “We’re not there today. Even building for something that has a million and a half to 2 million concurrents, you need to have a lot of the CDNs reserved, and you need to have stuff together. So, if it were the only way [to watch a major sports event], the Internet is not ready, but, as an important additional way to get it and to reach an audience that is not at home, that’s increasingly what everyone is going to try and do.

“TV certainly has the advantage in that regard today. TV is not going anywhere. This is a melting iceberg, but the water is very cold. So this is an important element for media executives to be thinking about, but it is not going to swamp the TV model today or tomorrow. But, with a generation of 85 million millennials coming who are native to the digital world, who grew up with this and expect it, it’s an absolutely essential part of how they are going to reach that next generation.”

5. In-Market MLB Streaming Is Coming Soon. Really
A Royals fan in Kansas City fires up his MLB.TV and can’t watch the Royals game because of local blackout restrictions. It’s frustrating for fans, but it’s the current nature of the business in regional sports networks’ deals, with the RSNs coveting their in-market exclusivity and the ratings and ad dollars that come with it.

However, the outcry for in-market streaming is starting to wear down those involved, and MLB is very close to providing the service, Bowman estimates, by the end of this season. He laughs at even himself for this, having predicted it before, but the signs are all there, with new MLB Commissioner Rob Manfred making the issue a top priority in his first year on the job.

“We have a new commissioner who is committed to getting this resolved, and he has reinvigorated those conversations. The issue here is, there are a lot of business people involved. Baseball is [involved] in the form of MLBAM (these are the rights that were conveyed to us); the clubs are because they want to protect and exploit their local markets; the RSNs are because they purchased those local rights; MVPDs are because they want that exclusivity. The consumer doesn’t care. They just want it. Right now, I think we are as close as we’ve ever been. Having said that, there’s a lot of issues to balance. We’re optimistic that this is the year that we will solve it.”