As we continue to move forward on the evolving Sports Digital space, I thought it’d be good to take a look back to when the Internet Sports space really started to take off.
Back in early ’95, I was in charge of marketing for Home Team Sports, the regional sports TV network serving the mid-Atlantic region. I had been reading about online services, such as Prodigy, CompuServ and America Online over the past year. I was thinking about how we could differentiate HTS from the other 22 regional sports networks in the US.
In January ’95 , we met with the NDC Consulting Group to discuss creating a web site for HTS — we’d be the first RSN with a stand-alone internet presence. At around the same time, I was also contacted by a fairly small company, AOL, about joining them to help the get their Sports Channel (it was called channels back then) up and running.
I was interviewed by Randy Dean, the channel GM, and Anne Levy, the incoming business development lead for the channel. We had a couple of interviews and totally hit it off. But, I still wasn’t sure about leaving the cable TV business for this new internet medium. But, then Randy gave me the line that hooked me — just as Roone Arledge helped create and define the TV Sports business, we had the opportunity to do the same with the internet. That line hooked me up — and helped drive the decision to go work for AOL in the Spring ’95.
1995 was the year that Internet sports sites really came into play. Yes, some sites had been up in the past, but many of the big portal sites and league sites launched that year. For AOL, the business model was straightforward and simple. Our model was to generate revenue by consumers paying the $9.95 monthly fee plus $2.95 per hour. So, our goal was to drive as much usage as possible from consumers. AOL then split the revenue with its content partners who were called Information Providers (IP’s). Most IP’s were compensated 10% – 20% of the usage generated in their specific area.
It was like the wild, wild west back in ’95. We were creating a new medium for the Sports sector. What did the consumers want? We spent many hours in strategy meetings, reviewing IP proposals, traveling all over the country for endless meetings with potential IP partners and conducting many conference calls.
Since our goal was to generate usage revenue for both AOL and the Sports IP, we had to develop and program the Sports Channel in way that met these mutual goals. So, we had to find out what did Sports online / internet users most desire? We could easily track the usage hours in the different areas of the channel so we constantly monitored what was working / not working. We quickly found out that Sports fans came online to post comments on the message boards about their favorite sport, league, conference, team, player, etc. Grandstand was our partner that excelled in helping make this happen (they were a visionary).
Consumers also wanted scores, scores, scores. In fact, as we found out, the scoreboard is what drives the usage for a sports site — much like the Stocks and Quotes portfolio drives the usage for a personal finance site. Back in the ’95 – ’96 timeframe, I was working on how to generate more and more usage for our partner, STATS Inc. While I was responsible for the business side, we fortunately had a great programming mind, Kevin Lockland, who took the lead on the technical side, in creating create the first real-time live sports scoreboard. This was a home run. Our usage hours increased dramatically — and the STATS Inc become one of the top 10 content areas on AOL.
Kevin and I also worked on creating a Player Portfolio, which tracked real-time usage for fantasy sports players. Ironically, this was just the tipping point for what is now a huge business … Fantasy Sports on the internet, mobile devices, smart phones, etc. When we approached the NFL about serving as their Fantasy Football partner in ’97, they told us that fantasy football was too similar to gambling so they passed on it. The NBA was the league that took the plunge. As we saw the traffic spike significantly from the number of people participating in fantasy sports, the NFL took notice the following year and also saw a large spike in traffic. The NFL then fully embraced fantasy football — which helped drive not only NFL.com traffic but also spiked their Sunday Ticket ratings. (Fantasy Sports is a topic for a separate blog posting. Also, much credit should go to Yahoo Sports for being the first and best sports site to fully integrate fantasy sports into their offerings — it is the reason they are a leader in this space.)
Another valuable lesson we learned in the formative years was to provide Sports content that was not being offered by the traditional Sports outlets — TV, radio, newspapers, etc. A perfect example was the World Wrestling Federation (it was called WWF back then before they changed to WWE). In 1995, WWF fans could watch their favorite sport on cable TV once or twice a week, but its’ matches were not covered by local and national radio or TV – nor was it reported on in newspapers. But, this new medium — online / internet — could provide 24 x 7 coverage. We were able to satisfy the enormous appetite of the WWF fans. They posted messages, filled the chat rooms, downloaded photos of their favorite wrestlers and managers (one female manager, Sunny, became the most downloaded female on the internet), etc. They became a top 10 content area on AOL. For our large AOL Live chats, the WWF wrestlers regularly drew more users than big-name stars from the big 4 sports leagues.
These examples above from the formative years of the Sports Internet industry proved that the Internet would be a viable and important medium for Sports consumers. In essence, we were able to provide instant real-time info to Sports fans (witness the huge popularity of Fantasy Sports); allowed them to interact and engage with one another (hence the popularly of sites now such as SportsBlog Nation, Fanhouse, Bleacher Report, etc); gave the “displaced fan,” a fan that is does not live in the geographic area of their favorite team, the opportunity to avidly follow their team via the internet. We also experimented with the “athletes on the internet” model. This model has not been cracked yet, from a meaningful revenue perspective, but as Twitter is showing us now, the ability to follow our favorite athletes has increased dramatically.
Just as ’95 – ’98 was when the Internet Sports space took off in a furious manner, we are in a similar position with Mobile Sports right now. As noted in previous blogs, Sports is always the driver of the adoption of new technologies. The time is now for new Sports applications for smart phones and tablets. It’s already been an interesting 12 – 18 months, but this period will continue to explode, particularly as this becomes more global with huge emerging sports markets in China, India, Brazil, Russia, etc. It is indeed an exciting time to be a Sports content provider and Sports Marketer. There are many, many opportunities facing us — and we take a look each week at key Digital Sports issues.
March 29, 2011 at 3:00 am
I am a Portuguese lawyer and I am writing you to let you know that i absolutely love your blog. Simple and very interesting as all blogs should be.
Also, I plan to attend the Gtown Master in Sports management in 2012 so please do not leave the faculty before that!!!!
April 11, 2011 at 11:39 am
Jose – thanks for the kind words. That’s great to hear you’ll be coming to our SIM program. No worries — I’m not going anywhere. I’ll be here at Georgetown for many years to come. Do you start this Fall? Jimmy
April 6, 2011 at 6:07 pm
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