Monetizing ' free' is the holy grail of new media. How stumps content producers. There are signs that's changing.
At least glimmers, some content produces are willing to experiment, invest, and explore to solve the elusive new media revenue riddle.
The Edmonton Oilers, are streaming their NHL, pre season games. Try
here for tonights game with the Islanders. According to Allan Watt, VP Broadcast, they drew 60,000 for one effort. Not a big number by TV standards. A really big number in terms of a live event, gate, equivalent to over three sell outs at Rexall Place.
So there's a market. Production is enabled by lower cost digital technology. Distribution, via the internet, is cheap. The reach is global. Seems like opportunity for sponsorship, advertising and host of revenue generating interactivity. However, the Oilers are prevented by NHL convention, league rules, from maximizing the opportunity.
According to President, Pat LaForge, the pre-season games are 'geographically gated'. Net distribution is restricted to Oilers market footprint, Western Canada and the NorthWest Territories. Hmm, typical old business model. Create scarcity in the face of abundance. Restrict instead of enable.
The net is a global distribution platform. The NHL and other content producers, still, believe they need to protect themselves, from each other. So they create artificial markets and loose money in the process.LaForge says, "We don't want the Maple Leafs' games streamed, in our market, we agree not to stream ours in theirs". Why?
This suggests head to head, the Leaf brand is more appealing, than the Oiler brand. The latter needs protection. The Leaf brand is appealing to Western hockey fans, no question. So why not take advantage of it. Why not give fans a choice, Leaf Brand and Oiler brand! Charge the Leafs a fee for the privilege, say 50% of the revenue, they might garner from a live streaming event. New revenue to them. Additional revenue, though not triple A margin revenue, revenue just the same, for the Oilers.
Choice and options always create massive value. Value earns premium revenue. In this case, both teams have the potential to generate more revenue. There's no scarcity, no restriction. Isn't business about competition? Well in theory. Business doesn't like competition at all. That's why business seeks to control markets through convention, or regulation.
This territorial rights
issue is, exactly, what Jim Balsile is fighting about, in his attempted take over of the Phoenix Coyotes. Despite claims to the contrary, territorial rights do exist, in professional sports. They don't have to be restrictive. Ironically, they could be a key in unlocking the mystery to making money, in the free digital economy.
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