July, 2008

Sirius-XM Gets Official OK

Sunday, July 27th, 2008

After a year and a half of wrangling and questions, the FCC decided late Friday to approve the merger between Sirius and XM, the nation’s two satellite radio providers.

For sports fans, the merger means the combination of the service with exclusive rights to Major League Baseball broadcasts (XM) and the one with rights to NFL games (Sirius). Now Seattle fans should be able to listen to broadcasts of the Seahawks and Mariners, and self-hating Philadelphia transplants can listen as both the Eagles and Phillies fall short at the end of the year.

The two companies began to combine back in 2006, when both said they were losing large amounts of money. Many blame the woes on throwing large amounts into deals with personalities such as Howard Stern, as well as the exclusive sports contracts.

The Federal Communications Commission spent a while reviewing the transaction to try to stave off worries about a potential monopoly. The satellite radio companies argued that, although they constituted the satellite market, they compete with iPods, traditional radio and internet radio stations. That apparently resonated with the FCC.

Part of the ruling in favor of the merger is reportedly an agreement from the new satellite giant to offer a la carte pricing. That means subscribers should be able to select which stations or groups of stations they want to receive and which they don’t need. As of Sunday, neither the Sirius nor XM site mentioned subscriptions in any terms other than monthly or yearly. In addition, neither site mentioned the merger — at least in any obvious fashion.

We’ll have to see how the merger ultimately affects pricing, service and the longevity of the now-combined company. At the very least, though, all those shares of stock that Stern reportedly got when he signed on might finally be worth something.

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Fantasy's Growth Rate Is Strong

Friday, July 25th, 2008

Over the past five years, the fantasy sports market has doubled, with users increasing at a rate of about 23 percent a year, according to numbers from the Fantasy Sports Trade Association and the research firm Ipsos.
As many as 30 million people played fantasy sports in the United States and Canada between July 2007 and July 2008, and they spent about $800 million on their games, according to research results presented at the July FSTA business conference by Aaron Amic, vice president of Ipsos Public Affairs.

That first number - the high-end estimate - is up from fewer than 20 million the year before, according to Ipsos’ 2007 data. This is obviously good news for the growing number of companies seeking to make their way in the fantasy sports industry. Not only does it mean more eyes and fingers are visiting various websites, but such growth can be a tremendous asset when approaching big market advertisers.

In the United States, 17 percent of males said they had played fantasy within the past year, as did 5 percent of females. Those numbers were up from 10 percent and 3 percent, respectively, in the previous year’s study. Canada’s jump basically mirrored that of its southern neighbor. The percentage of male participants rose from 8 to 15, while females jumped from 2 to 6.

As usual and expected, the most-represented age group is 18 to 34. The 22 percent of us who play fantasy sports within that age bracket constitute a rate at least nine percentage points ahead of any other age range.
Overall, though, fantasy sports appear to be growing rapidly among young people. In 2007, the 7 percent of 12-to-17-year-olds who had participated in the past year matched the rate of the 35-to-54 bracket. In the most recent study, however, participation among “teens” - a group including 12-year-olds for this study - nearly doubled, to 13 percent, while the 35-54 bracket remained stagnant. Canada’s change was even more pronounced, with teen participation jumping from 4 percent to 14 percent while the rate of 35-to-54-year-olds rose from 6 percent to 9 percent.

That the fantasy crowd seems to be skewing younger should be of particular interest to potential advertisers, who are still learning how to approach this growing market. Anyone pursuing these companies can tell them that more than half of fantasy consumers (51 percent) spend somewhere between 11 and 25 hours on the internet in the average week, and another 13 percent of users are online for more than 40 hours. That info came from the study that Dr. Kim Beason, associate professor at Ole Miss and founder of Fantasy Sport Research Specialists, presented on the first day of the FSTA conference. Combined, this means an audience that is not only growing but also fairly captive.

What all of this also means is a pretty clear target audience for fantasy-content and -service providers. Although it should surprise no one that men aged 18 to 34 are the industry’s largest demographic, the growing number of teen participants and quicker recent growth rate among women points toward a very healthy future for the fantasy sports industry.

The Ipsos study surveyed 1,210 Americans and 1,200 Canadians aged 12 or older on their fantasy-sports habits. The second phase of the study culled 594 fantasy players who were at least 18 years old. The entire study is available to FSTA members via the organization’s site at www.fsta.org.

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