The 10th Annual Sports Media & Technology Conference, presented by the Fantasy Sports Association, Sports Business Journal and Sports Business Daily, took place Thursday and Friday amid a tough economic landscape.
Leaders from around the sports media field met in New York City to discuss and learn about the way some top companies are dealing with the tough times and to find out what might be on the industry’s horizon.
Ted Kasten, founder of Advanced Sports Media — which develops the Draft Analyzer fantasy draft software and PlayerSearch, the first sports-focused search engine — was in attendance and shared his notes from the forum with FSB.com:
The economy was obviously a huge focal point. There were three related themes discussed throughout the conference:
1) Companies need dual revenue streams during the economic downturn: Companies with dual revenue streams (advertising revenue plus subscription revenue) will be in much better shape during the economic downturn than companies that rely solely on advertising revenue. Sports, in particular golf, will be hit hard because of their dependence on financial firms and domestic car companies for sponsorships. Jimmy Pitaro of Yahoo pointed out that they have always been tempted to provide all of their fantasy tools, such as the Stat Tracker, for free but never did as those premium products continued to grow every year and are currently growing faster than their free services. Considering the change in online advertising, that was a smart move to retain the premium features.
2) Major sporting events such as the BCS moving to cable: Broadcast networks that rely solely on advertising revenue are unable to compete with ESPN and their powerful dual revenue streams. Demonstrating this was ESPN’s recent acquisition of the rights to the BCS games from Fox. Fox was unable to match the $125 million/year bid from ESPN (Fox currently pays $82.5 million/year for the rights to the BCS). This will be the first time these games will not be available on free broadcast TV.
3) Flight to Quality: Panels repeatedly stated that a “flight to quality” will make the smaller companies feel more of the pain from the downturn in advertising than the larger companies and brands.
The first and third items should be of particular interest to companies within the fantasy industry. “Flight to quality” is a phrase said to originate in stock trading, and it refers to taking investments out of risky ventures in favor of the safest possible entities.
For the purposes of our industry, it could mean advertisers, sponsors or even investors veering away from smaller fantasy outfits or new ventures and throwing their money behind the familiar names.
Any lack of funding from those avenues feed directly into the need for dual revenue streams. Obviously, if a fantasy site can’t pay its way on advertising dollars alone, it has to find other ways to stay viable. That, in turn, brings us to the whole free vs. subscription quandary that not only faces many a fantasy site but all sorts of content and service providers around the Web.
If you’re reading this site, you’re probably already facing these issues, but maybe you’ll find it a little heartening to know that such things are on everyone’s minds throughout the industry — even the big boys.
