MLB Enters Slippery Slope With MLB.TV, MLB Network

(MoneyWatch) 
As players take the field to begin a brand new season, Major League Baseball has another debut to worry about.

The league's MLB Network and online video platform MLB.TV got their first taste of live action on Sunday's Opening Night, and other content providers should sit up and take notice.

Major League Baseball has managed to do what many sports leagues can only dream of: get users to pay as much as $20 per month to watch games online, all while launching a successful proprietary cable channel. However, in doing so, baseball has passed over the television networks as a middleman and gone directly to the fans, which may pose a problem.

Baseball and other sports leagues largely depend on lucrative TV contracts for revenue, so the league was forced to have one foot on each side of the fence. The result is a few awkward policies and unconventional deals, but MLB has largely avoided the legal and contractual snafus that plague efforts to circumvent big media partners.

In order to appease local networks, MLB.TV adheres to a blackout policy that prevents fans from using MLB.TV to watch their home team when they reside in their team's market. The policy hasn't been updated in years, and can result in fans living 200 miles away from their "home city" and still getting blacked out. It also prevents fans from watching postseason baseball online.

In its other effort to skip the ESPN's of the world, the league has launched the MLB Network while agreeing to concessions for the cable companies and networks. The MLB Network is partly owned by cable companies, thus giving cable providers incentive to see it succeed and avoid a battle similar to the NFL Network's trouble with Comcast. The result was the most successful cable channel launch in history.

Thus far the MLB's new media strategies have worked. MLB.TV had 500,000 subscribers last season alone and the MLB Network is now carried in 50 million homes. Now the league is firmly entrenched in a favorable position in this waiting game of shifting attitudes.

As consumers cut their cable service in favor of online viewing, the scale will eventually tip to MLB's favor. Broadband Internet access will become more common, and television viewing will become more focused on the niche. Soon the MLB will be able to pull back on the favorable deals it has given its broadcast partners, and soon blackout deals and split ownership will be a thing of the past.