Written by Mike Finley
651-644-4540
mfinley@mfinley.com
Hi, I’m XXXXXXXXX. I have
the pleasure of managing the creativity of as little over 200 employees at XXX
Advanced Media.
OK. As I think most of you already
know, we run XXX.com, the official Major League baseball website. In addition
we run the 30 individual team sites as well.
If you’ve never sauntered
over our way, I urge you to take a peek sometime soon. The URL is an easy one
to remember: XXX.com.
Fans probably think we all
shut down and go on vacation during the offseason,
but you people know better. The offseason – which
seems to get shorter every year – now it’s just from November through February,
when catchers and pitchers report for spring training – is actually our busiest
time. That’s when we test new products, and bulletproof our system for the 2005
opener. It’s hammer time, not hammock time.
We have to be sturdy because
we get a lot of traffic. Millions of baseball fans around the globe use XXX.com as their home page, all year long.
You can download any game played during the season, and also games from
the past, including classic games back to the early ‘30s.
We offer breaking news,
stats, clips, fantasy fodder, plus an interactive
forum where fans can vent their spleens.
You can buy tickets
to games, authenticated memorabilia, all that
stuff. You can learn about the business side of things, who’s filing for
free agency and who might pick them up. Or you can focus on the lore of
baseball, like how Honus Wagner used to scoop up
a handful of gravel with each ground ball, and throw the whole handful in a
cloud of dust to first base.
Whatever you do there, I
guarantee, you will have a ball.
Many people in the industry
don’t realize we employ the largest all-baseball staff on the planet. We
have close to 80 reporters and editors, at least two with each team, and at
least one of them “embedded” locally.
What I like about getting
together with a group like this is it makes me think about the big themes
in the sports media business. One big theme is attitude. In my mind baseball is
in a kind of perpetual war between our pessimistic and our optimistic
sides. On the pessimistic side, it’s Uh, oh, here
comes the Yankees. On the optimistic side, it’s “Wait till next year!”
Psychologist Martin
Seligman, in his book Learned Optimism, says it’s generally better to be
an optimist. Optimists live longer, find greater fulfillment, and enjoy life
more. The disturbing thing about pessimists is they are often right –
the good news that they are not always right..
A line you hear on Wall
Street is that “Prosperity climbs a wall of worry.” What this means is that it
is rare to experience a period of can’t-fail growth. We saw it in the 1950s,
following World War II, when we were the only country worldwide not left in a
smoking ruin. It’s easy to be optimistic when everyone around you is in ruins!
And optimism flared up in the technology sphere in the 1990s, when investors
could double their ROI by flinging darts at NASDAQ.
Of course, then a great
pessimism set in, as the dotcoms went splat. So today we’re climbing the wall
of worry again, and we’re fighting hard, and gaining ground. But there are
still a lot of nay-sayers to refute.
One pessimistic thing we hear
is that the dream of “advanced media” is a delusion … that by luring people to
the Internet and other platforms we are biting off our nose to spite our
face. If people are sitting at their screens at home hitting links, then
they’re not filling those stadium seats, or supporting teams with cable
TV subscription fees.
I reject this pessimism. But
I do it with kindness, because it usually comes from traditionalists. Baseball,
as you know, has some the most hidebound fans of any sports attraction.
But we love our traditionalists. We have to, because baseball is as much
about the past as the future. Take away Ruth, and Bonds doesn’t mean so much.
In this changing age we need to cherish its traditionalists like never before.
But they have a certain
knee-jerk response that I don’t subscribe to: If it’s new, it’s bad. To
them, downloading games is about as welcome as the designated hitter rule.
Thanks to them, Wrigley Field didn’t have night games until 1988
. Did you know that in the 1870s there was a 9-ball, 3-strike rule? I
know a guy who calls those the good old days. Slow, but good.
Baseball cuts its first
media deal in those days, when
Soon
But I remind the nay-sayers, since they revere history, that pessimists have historically
been wrong about a lot.
So what have we learned? At
every step, we learned that baseball is bigger than we thought it was.
It wasn’t just seats in the stands. It was getting inside people’s heads, and
their hearts, and reminding them how much fun, and how engaging, the game is.
Here’s the actual,
not the feared, dynamic. In the history of media, no medium has ever replaced a
previous medium. It’s not like automobiles making horse-drawn travel
obsolescent. It’s a different dynamic.
There’s
something I want you to hear, a passage from The Sporting News wrote back in 1923,
when radio first broadcast a World Series:
"This
new radio craze is already crimping attendance at anything where the feast is
for the ear rather than the eye, and seriously affecting spectacular
entertainment because the family stays home to hear the concert or lecture or
story telling in preference to going out to see the things pictured on the
screen.
The article goes on:
"And
next we will have the whole works shot to pieces because instead of mere sound,
the radio will be producing in every home that has a ten
dollar equipment the picture of the play. Yep, that is the possibility. When
Ruth hits a homer or Sisler slides into the plate, a
film will catch him in the act, wireless will carry it a thousand miles
broadcast and the family sitting in the darkened living room at home will see
the scene reproduced instantaneously on the wall...
"Then
what will become of baseball? Nobody will actually see Ruth and Sisler in action except the bored operators of the wireless
picture producing machine who have to be out as part
of that job. The magnates won't have to worry about taking care of their
crowds; their concrete grand stands will be torn down and the business of
baseball will be collecting a fee for supplying the action that is reproduced
on the parlor wall instead of counting the gate."
Unquote! You see what I mean
– this controversy has been going on forever.
1935 saw another innovation
– night baseball. Savvy owners figured out that more people could come to a
game if it was played after work let out. This seems so obvious to us today.
But at the time it was controversial. The Larry in this upheaval was Cincinnati
Reds general manager Lee McPhail.
MacPhail’s son Lee, who joined his dad in the Hall of fame in
1998, remembers his father’s bold move:
“Owners were interested in drawing as many people as they could,” he said. “There were a lot of conservative owners and operators, and it took someone with a little foresight and courage to go against the trend.”
“Foresight
and courage” – and if I may supply another word for it -- optimism.
The move paid off big time.
Attendance increased, revenues soared, and teams adapted. Some wore reflective
satin uniforms to the outfielders wouldn’t smash into each other.
This same pattern happened with
TV in the 1950s. The first game televised from coast to coast was on
The industry was seized with
fear. One Senator offered a bill to give clubs the right to ban broadcast of
games in their own markets. Minor league teams, especially, saw TV as biting
into gate receipts. One of baseball’s biggest promoters, Branch Rickey, sounded
the alarm about TV, in a 1953 Senate hearing into the dangers of broadcast
ball:
“Once
a television set has broken [fans] of the ball-park habit, a great many fans
will never reacquire it. And if television makes new baseball customers, as
some are claiming, why don’t Broadway productions televise their shows? …. I
cannot concede that baseball has … any obligation to give away continuously at
only a fraction of its real worth the only thing it has to sell.”
Branch Rickey was probably
baseball’s greatest salesman over the course of his great career, but he
clearly struck out on this issue, by not recognizing TV’s inevitability. In
1950, 10.5 millions sets were in use. Every year for the next decade, that number
would double. By 1953, 15 of the 16 teams broadcast some games locally, and ABC
introduced its game-of-the-week format. By 1958 the die was cast, as the
Yankees inked a contract televising 140 games that season – nearly every game.
As you know, when the Yankees lead, what can other teams do but follow?
But pessimism never dies.
Cable didn’t knock out broadcast TV, and the Internet has not wiped the earth
clean of other media. They all still exist, even if they are moving the
furniture around to be the best at what they are.
Digital sports are not, not,
not the death-knell of analog sports. This is so clear. Nevertheless,
they are dividing us once again into pessimists and optimists. The pessimist
sees scarcity, a pie with a limited number of slices, literally a zero sum
game. The optimist – and those of us who work for technology companies have to
be optimists, because nothing ever works quite right yet – we know that
this pie has the capacity to grow.
Remember the Net a few years
ago, when Yahoo and Petsmart and all those guys were
racking up incredible price-to-earnings multiples based not on profits but on eyeballs
– the number of page-views you got in an hour. A medium bringing in 20 million
hits a day has to be good for business, right? That was the thinking at the
time: Get the eyeballs today and the money will follow tomorrow. Well,
all that eyeball business went down in the dotcom crash. Lesson: The net does
not live by eyeballs alone. That was the received wisdom, and pessimists
embraced it.
But some folks took it too
far. The fact that the net-based media business is still a business does
not mean that it works like every other business. Amazon.com is not
Wal-Mart. It remains a fabulously different environment in which to do
business.
The number one difference is
the nature of digital products. If a customer goes into Wal-Mart and
buys a clothes hamper, that’s one fewer clothes hampers in inventory. It can’t
be sold again. Somebody somewhere is going to have to mold or weave or glue
another one together.
But if you come to XXX.com
and download Game 4 of this year’s AL Championship Series – and I hope you
will, because it was a heckuva game – we don’t have
to subtract one from inventory, and we don’t have to make someone in a Third
World nation sew a replacement. We get to keep selling that game, over and over
again.
With digital products there
is no such thing as scarcity. We never run out. And our cost per unit sold
keeps dropping through the floor. This is one of those things pessimists don’t
get. The physical game of baseball is here to stay – it has to be real.
No one wants to watch a computer-generated Roger Clemens throwing the stump of
a broken bat at Mike Piazza. It cries out to be analog. And in this sense
the eyeball idea is still intact. Video on demand is a radically different kind
of business, and people who don’t “get” that will fail at it.
It is simply not true
that digital sports takes away from sports in-person. This year marks our 4th
(Jim: true?) year of doing business online, and our best year yet. This
coincides with the best attendance in Major League history, and our best gate
ever. Whether it is the most profitable remains to be seen.
But the point is, the money is flowing, and the fans, whether
they are in the stands or checking a late-inning score on their laptops, are
tuning in.
You see, it really does come
down to eyeballs. Count me among the traditionalists that were sad to see the
Cubs clamp down on rooftop spectating along Addison
& Clark Avenues in
Years earlier, it was kids
sneaking in under the stands to steal a peek at a game – an archetypal American
activity. It meant baseball was important. People wanted to see it with their
own eyeballs. I think that’s great. And we’re trying to cultivate this same
intensity and fascination at XXX.com – because if people don’t care, What’s the use of any of this?
Let me tick off some wisdom
that pessimism doesn’t cover.
Number
one. Can you make money on the net? Yes, you can. XXX.com
surprised everyone, including our owners, by turning a profit in its second
year of operation. Yes, we have a product other vendors drool over – we’ve got
Ichiro, we’ve got Albert Pujols, we’ve got Johann
Santana -- we’ve got Pete Rose, for Pete’s sake – but the fact remains that we
took aim at a market and made it profitable, in two short years.
If we can
do it – well, maybe not everyone can do it, but it certainly can be done.
A better question, today,
is, Does the site advance XXX’s
interests in attracting new customers to Major League baseball? And here the
answer is an emphatic YES. In a world with a ton of other attractions besides
baseball – and yes, I’m talking beach volleyball here – baseball is not just maintaining
but building on its fan base. And these new technologies – which, if you
step back and turn your head and squint, sometimes do look like they are held
together with bandaids and chewing gum -- are part of
the key to this strength.
Standards are being set now
for just about every information platform you can think of. Today you
have the option of pulling in play by play from XXX.com on your cell phone, on
your handheld, on your Blackberry, etc. It may not be full-screen action, but
it is live baseball, and it is real in its own oddly compelling way. And every
way we come up with to reach out and grab fans with, helps us hold onto them in
this increasingly competitive realm.
The biggest mistake anyone
in our business can make is to go through the motions. You know what I mean:
streaming video can be sold, so we’ll sell streaming video. Friends, this has
nothing to do with streaming video, but everything to do with the bond that
exists between our customers and the game of baseball. They just flat-out
love the game. And it is not our business as the “keepers of the keys” to tell
them how they can show their love – that they have to watch games in a stadium
… or on pay-per-view … or even in real time, as the actual game is played.
At XXX.com, the customer, the
fan is Number One, the king. Our job is to find ways to requite that love,
in as many ways as the fan wants. If we discover fans want games displayed on
their waffle irons at breakfast, we’ll get to work on that. If they want to
watch games while driving on the freeway, that’s tougher, but we’ll figure a
way. I hope you get that message: It’s not the streaming video that drives this
business. It is the heartbeat of the individual fan.
I want to close with an
observation that is not really about baseball at all, but is about the business
everyone in this room is involved in – communicating the joy of sports. What is
it – the 9th of November. We just put
another World Series to bed – a darn good one, too. And as happens ever so
often, a political campaign even longer than the baseball season also came to
an end. Some nights these things came into conflict, as during the debates.
Now, I don’t want to run down
anyone’s candidate. Check that. I want to run down everyone’s candidate.
Because as important as politics is, it is virtually
unbearable for most people to watch. We only do it because it’s
important, like getting your teeth cleaned.
Maybe we can get a show of
hands here. Which would you rather have to sell – the World Series or
the debates? (Show of hands) Good, it’s
like I thought. No surprise there.
Here’s the magical
part. Why is it that people trust sports but something in us never
quite lets us trust politics?
The answer is that politics
is rigged, and sports is not. Those debate
questions were so pasteurized it’s a wonder the candidates could still draw
breath. We knew what was coming. Even when it was our guy talking, it kind of
made us sick. Because it’s not like life. In life, and
in sports, you never know what’s going to happen next. The pitch comes in, the
batter swings, and everyone freezes, because anything – absolutely anything –
can happen in that moment.
So that’s why sports works. Because we believe it. It’s
actually better than Hollywood, because we don’t need creative screenwriters to
determine outcomes. The game does it all. It’s beautiful that way.
Every pitch in the World
Series, we were on the edge of our seats. Either something terrific was about
to happen, or something awful. This anxiety created a wonderful sense of hope.
What did Yogi say – “It ain’t over till it’s over?” On any given day the
Minnesota Twins can take it to the Yankees. Maybe not four out of seven days,
but you get the idea. Any given day, Joe
Terrible can outduel Pedro
Martinez. Every 500 years, a designated hitter will steal home. You don’t know!
It’s amazing. It’s great.
And when you aren’t sure, you
feel alive. The crack of the bat, and every head turns.
That’s living.
Now, I know there are still
pessimists out there. There are some right here, in
our midst. You’ve seen a game or two, and seen the slips in the live action, or
the wait while the highlight video buffers. Every now and then, the sound
burps. The point being, the system is not yet perfect. We still
experience glitches. So – as the appetite for these products increases, wait
times will get even longer, and glitches even more unacceptable – especially to
people who aren’t sure about using their PCs as TVs in the first place.
To them I say, Have it your
way. We don’t want to change your experience one iota. But for folks who do
want to catch a few plays while out and about, or to
see this afternoon’s game when they get home from work at night – we’re there
for you.
As for the glitches and
beeps, consider this. As mature technologies go, the Internet is about an hour
and a half old. It’s still in diapers. Where we are today is not where we will
be in two years, or even next month. When people kvetch to me about buffer
times, I say, what kind of fan are you? This is the first inning. The first inning.
The research group IDC
estimates that this year 27.8 million homes in
But that number is going to double to 36% by 2008, IDC says. Think
of a market that doubles in four years. Think about 42 million-plus subscribers
worldwide. Think about revenues of $3.7 billion. We’re not just a stalking
horse for our teams and print publications with numbers like those. We are
it. We are ourselves the core of a great and profitable industry.
This game is going to last a
long time. And with every pitch, my friends, it’s going to get better.
That’s really all I came
here to tell you today. So cheer up everybody.
As for us at XXX.com, spring
training is already in the air. So I’ve got to get to work.
Thank you for listening to
me today, and best of luck with your own online endeavors!