MLBAM Shifts Strategy On Price Cuts; Bundles Video Sub With ESPN, NHL
This story was written by Staci D. Kramer.
Back in December, Bob Bowman told me that Major League Baseball Advanced Media planned to cut subscription prices for the 2009 season by at least 20 percent as a response to economic hard times. That was then. The pricing announced for this year does include a pay cut for annual plansa $10 decrease to $109.95 for premium and $79.95 for standardbut, as Bowman readily admitted when I called him on it, the monthly rates won't change at all and the overall cut is roughly half than he projected two months ago.
Bowman said the strategy changed when they started talking to fans about the upcoming season and found that a price cut sent the wrong message: "It was basically down to price versus value ... They thought the product wouldn't be as good as opposed to a product twice as good." He said the overall message was the price was fair and fans were more interested in an improved feature set than a lower price. Once they moved away from the deeper price cuts, the plan was to stick with the same pricing across the board. That changed again a couple of weeks ago with the decision to lower the annual packages "a little bit and maybe encourage people."
More than half of MLBAM's roughly 500,000 annual subscribers (the gross number) take annual packages so would see cuts of 9-to 10 percent. Those who switch from monthly$19.95 for premium, $12.95 for standardto annual could see savings in the range earlier mentioned but it's not being pitched that way.
The price cuts first came up when Bowman was explaining the layoff of some 20 employees (the actual number turned out to be 22): the savings would offset the price decrease. And now? "Ironically, it works out to be pretty close." That's assuming the same ratio of annual subscribers. Renewal notices haven't gone out yet so it's too soon to gauge actual subscriber reaction.
A tip to Dan Rayburn at StreamingMedia.com for picking up on the mixed pricing scheme. More on new features and bundles subscriptions after the jump.
New features: The premium feature set for 2009 includes "true" HD quality streams based on the subscriber's ISP access, live game DVR functions, live game picture-in-picture, and, one of the favorites based on surveys, syncing local radio to the video stream.
Bundling with NHL, ESPN: In a different kind of strategic switch, MLBAM is trying bundles with other content providersstarting with longtime partner ESPN (NYSE: DIS) and the National Hockey League. Other possibilities are out therethe NBA, for instance.
MLB.TV-ESPN: An MLB.TV premium sub sold with ESPN Insider runs $129.95, about $20 off the usual price of buying both. The two will cross promote the package across digital media and ESPN The Magazine but no mention of TV promos.
MLB.TV-NHL: Starting Feb. 16, a fan of both sports can get MLB.TV premium and NHL GameCenter Live for $139.95. That's not shabby given that the NHL Race For the Cup package, which includes some Stanley Cup games, runs $79 and the full-season package runs $169. Bowman says they don't have data on fan-interest overlap with other sports but that the NHL said it could be about 80 percent.
By Staci D. Kramer