Thursday, March 27, 2008

Hulu Hoops (and more)



Founded last August and debuting last month, Hulu might just be the future of TV on the Internet. A joint venture between Fox (News Corp) and NBC (GE), this little site with big backers bills itself as “a single source of free, on-demand programming from some of the most popular studios and online networks, helping viewers quickly and easily find and enjoy the premium content they are looking for.”

Hulu just added its first sports content this week, with content from the NBA and the NHL. Sure, the pickings are slim right now (there are only two NBA games up, they’re both months old, and they’re both Lakers games) but the site is just getting off the ground. The potential for this to be a sports hot spot is there.

Hulu now offers these sports features, free to everyone:

NBA
- 2 full-length games (including Kobe Bryant’s 81-point game)
- Daily Recaps
- Highlight reel: NBA 5-star plays
- Top 10 highlights

NHL
- NHL Best of The Week - Season 2007-08 (highlights the week's best assists, goals, saves, and hits)
- NHL Classics
- NHL Player Profiles 2007-08
- NHL Regular Season 2007-08

Action Sports
- Firsthand
- The 808 from Fuel TV

College Football
- The Boise State-Oklahoma battle in the 2007 Tostitos Fiesta Bowl

There’s no doubt that by the next time I log into Hulu there will be significantly more content. The real question is how NBC, Fox and their partners will transition these sports events from TV to online distribution. The current advertising model relies on short commercial breaks (with ads from Intel, Priceline, Direct TV etc), banner ads, overlays (promotional graphics that roll over the bottom of the screen) and maybe extra sponsorship dollars from events sponsors. Some games also offer a choice to viewers: to watch the game with commercials, or watch a two-minute advertisement at the beginning. (The Wizards/Lakers game is currently being shown with a preview for “Baby Mama.”)

The main obstacle for Hulu, going forward, will be whether it can attract other major content providers like CBS and ESPN. If Hulu can expand its broadcasting capabilities then it will be bigger than YouTube, bigger than social networking, maybe bigger than Google.


Notes:

NBC Sports broadcasts the Olympic Games (through 2012), the NFL, the NHL, Notre Dame Football, the PGA Tour, the USGA Championships, Wimbledon, the French Open, RCA Tennis Championships, the Dew Action Sports Tour, and more.

Fox Sports has broadcast rights to NFL games, MLB (1996–present), college football's Cotton Bowl, most of the Bowl Championship Series (BCS National Championship Game, Fiesta Bowl, Orange Bowl, and Sugar Bowl), and NASCAR. ‎

Monday, March 24, 2008

YouTube Sports Channels

Consumers of sports programming are seeking out online video for a number of reasons. Whether they’re looking for Web gems, using videos to find a community, or sharing tastes, these consumers are more likely to visit YouTube than any other online video-sharing site, as shown by the graph below. (YouTube accounts for more than 96% of all videos shown by Google.)


Among sports properties, there is no clear winner in the battle for online video supremacy. Last month, I wrote about Nike and adidas in the online video world, but these aren’t the major sports properties on YouTube. On the contrary, while the Nike Soccer channel boasts 286,000 views and adidas “It Takes 5ive” channel can claim 413,000 views, the NBA channel on YouTube leads the pack with 2.7 million views.

I’ve created a chart with a sampling of sports properties and their respective rankings on YouTube. Some sports properties have no official presence on YouTube, such as Major League Baseball and NASCAR, while some (like the NFL) have made a disappointing effort.

A YouTube channel is a centralized location where other users can see a user’s videos, favorites, bulletins, comments, subscribers and video log. In the case of these sports properties, a YouTube channel is similar to a Web site or a social networking profile page. The sports properties use these landing pages to direct viewers back to their official homepages (“Visit NBA.com for over 15,000 videos”) and to help promote a campaign (“Help decide which NFL player story should be made into a Super Bowl commercial”).

And while the skeptic might point out that none of the 2008 Super Bowl ads pointed to their social media presences on YouTube, the number of Americans viewing online video is encouraging (research indicates that 78.5 million viewers watched 3.25 billion videos on YouTube.com in January). In a market where grabbing a consumer’s attention seems ever more difficult, these numbers are worth a second look.

Thursday, March 13, 2008

Economics of the Final Four


March Madness is starting soon, with Conference Championships ending on Saturday and Selection Sunday coming the day after. The post-season NCAA tournament is good news for fans, great news for the 65 teams that compete, and fantastic news for CBS. But is it a good deal for the host cities of the Final Four?

The answer seems like it would be an emphatic “Yes,” but in the book The Economics of Sports (2004), Robert Baade and Victor Matheson argue that promoters overstate the economic benefits of the Big Dance. Accordingly, they maintain that in only two of the 48 men’s and women’s tournament finals before 2004 did the host city experience significant positive income growth.

In the separate Handbook on the Economics of Sports (2006), Baade again argues that the NCAA Tournament (along with other “mega-events” such as the Olympics, World Cup, Super Bowl, etc.) fails to generate the expected income because of costly government subsidies (such as stadium financing and infrastructure), security expenses, operating costs, and the likelihood that a counterbalance to the gross spending of visitors occurs when residents not attending the event decrease spending because of local price increases and their desire to avoid venue congestion. On top of that, multiplier analysis can be used to estimate the amount of money retained locally. In Economics of Sport and Recreation (2000)Chris Gratton and Peter Taylor estimate that only 20 percent of additional visitor expenditure is retained as additional local income.

On the flip side, it’s easy to see why cities line up to host the Final Four. Besides the public relations benefits and the opportunity to attract visitors who may be coming to the city for the first time, host cities also make real money. In 2006, Indianapolis hosted the Final Four and reported an economic impact of $40 million, not including direct spending from media or corporate sponsors.

Maybe this year San Antonio, the host of the 2008 Final Four, will strike it rich. But my guess is that when the dust settles and they’re counting media and visitor spending revenues, it might be harder than they think to balance their checkbook.

Friday, March 7, 2008

Nike Marketing Campaigns

Nike has had some very forgettable marketing campaigns. In a year or two, who will remember the “Free” campaign in which Nike urges athletes to train like they were wearing no shoes? Or the “Second Coming: Our Game. Our Time.” campaign that celebrates the 25th anniversary of Nike Air Force 1? Though they might be successful, they won’t last in the public imagination in the way that some of Nike’s most beloved branding accomplishments have.

But unlike these comparative flops, I think it’s fair to say that Nike, more than any other brand, has created marketing campaigns that have emblazoned themselves into our memories, and have changed the way we look at sports and maybe even ourselves.

Too corny? I challenge anyone to find marketing efforts from any industry that have made as much of an impression as the JUST DO IT and LIVESTRONG campaigns.

The slogan “Just Do It” combines grit and determination with a touch of humor. It’s a rallying cry to get off the couch. It’s self-empowering. And, according to the book, Nike Culture: The Sign of the Swoosh, the slogan shows that no matter who you are, no matter what your physical, economic or social limitations, “transcendence is not just possible: it’s waiting to be called forth.”


Lance Armstrong’s “Livestrong” movement, run in association with Nike, is similarly empowering. For a dollar, people wanting to support the fight against cancer could purchase a yellow “baller band.” By 2005, a year after the loopy wristbands were released, they had sold 42 million, making it one of the most successful cause-related marketing campaigns ever. According to the book, Why We Talk: The Truth Behind Word-of-Mouth, Nike succeeded with this campaign by focusing on customers’ higher-level needs. The “Livestrong” bracelet helped a tribe of loyalists identify themselves and with each other.

These are just two out of many Nike marketing endeavors. Below I’ve assembled a partial list of the others (most done by the Weiden + Kennedy ad agency) along with the year the campaign began.

Air Jordan – 1985
Revolution – 1987
Just Do It – 1988
Bo Knows –1989
Instant Karma – 1992
I Am Not a Role Model – 1993
Let Me Play
– 1995
Whatever – 2000
Secret Tournament – 2002
Livestrong – 2004
Free – 2005
Joga Bonito ("play beautiful") – 2006
Second Coming: Our Game. Our Time. – 2007
Quick is Deadly – 2007
Become Legendary – 2008

Tuesday, March 4, 2008

Virtual Ads

At their exhibit at the New Orleans Convention Center, the Spalding team showed off its plans to use NBA backboards as an advertising medium. Spalding’s rear-screen projection system would put ads on the glass backboards during timeouts, halftime, and other non-play periods.

Virtual ads are nothing new: the patent dates back to 1993 and the technology really took off in 2002, about the same time that virtual first-down lines started showing up in NFL broadcasts. But where midfield soccer ads, corporate logos behind home plate, and branded first-down lines are all examples of completely virtual advertising, the projection technology proposed by Spalding is visible to in-game spectators as well as broadcast viewers. In fact, the target audience is presumably the in-game spectator since timeouts and halftime trigger commercial breaks for broadcasters.

It will be interesting to see how this technology is received. In the 2001 World Series virtual ads were criticized as obviously fake and obnoxiously big, while today they are a fully-integrated part of the event.