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Last week, I had the opportunity to attend the 4G Wireless Evolution (4GWE) conference in Miami. This event is produced by my friend Carl Ford and the gang at Crossfire Media, and is held in conjunction with the IT Expo conference and exhibition. I spoke on a panel titled “Mobile Video Revolution” at the IT Expo, but today I am writing about a presentation for which I was sitting in the audience.
Bob Bowman is President and CEO of Major League Baseball (MLB) Advanced Media LP, and he spoke about the work of his division – his team manages the mlb.com website and MLB’s other media “properties”. MLB offers consumers a $100 yearly subscription package that provides live online streaming of all MLB games to a variety of devices, including mobile streaming to the iPhone (and newly-announced iPad). In addition, there is a special iPhone app (available for $10 in iTunes) to optimize the user experience on Apple devices.
While Bob had an entertaining and informative presentation, his main point was unambiguous: “Free is not a business model.” He dismisses advertising as a business model, claiming that there is just too much content available, and not enough advertising money to support it all. From the very start of its online presence, MLB has charged for content; according to Bob, every other online media company will need to do the same, or risk going out of business.
During the week that the conference was underway, rumblings on this topic were spreading through the online media world. In fact, on the same day that Bob presented his thoughts, Tim Siglin wrote in streamingmedia.com about (1) a plan by the New York Times to begin charging heavy-volume users for access to information and (2) rumors that Hulu would soon begin charging for access to streaming video.
Streaming video is becoming an increasingly important component not only of video-centric sites like Hulu, but even of the websites of “traditional” media companies like CNN and the New York Times. So in my perspective, the real message here is that web-based video is going to have a price tag associated with it. I believe that some sites will follow a fixed-price subscription model, while others may adopt a micro-payment approach where users pay a small amount for each piece of information that they desire.
In my next post, I’ll extend this thought to the mobile world, and discuss ways that these business models can help solve some of the bandwidth and congestion issues being faced today by carriers such as AT&T. Until then, you and I should enjoy the free ride while we have it available – I don’t think it will be here for long.