Paradigm Shifts

» 12 April 2009 » In international baseball, sports business »

Open question to readers: is there a paradigm shift coming in baseball? In sports in general?

Context: in the last ten years, we’ve seen the emergence of the web lead to paradigm shifts in a number of different businesses. Retail was among the first affected, with the rise of e-commerce and websites like and eBay. Then we saw the music industry try and ultimately fail to shut down online music sharing, and the rise of iTunes, the return of the single and the demise of CD sales. Now the news media industry is going through an identity crisis, with publications going under and the industry at large trying to figure out how to transition from paper to digital mediums while remaining profitable.

In the three examples I listed above, the web changed the basic way customers purchase and consume the products. That doesn’t seem entirely possible in sports — you’ll still have live events and TV and radio. Also, in each of the three examples there was an external, disruptive force involved. The sports business is somewhat isolated from that because of the monopolistic nature of the top leagues.

So where is the paradigm shift in sports? I suppose the fan experience is a little different. This blog, and others like it, provides information would otherwise be unavailable in English. Without the web, it wouldn’t exist as  I couldn’t afford to bootstrap a print publication. But do independant blogs and other online resources change the way teams on either side of Pacific operate? Do they change the way fans consume the baseball product?

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  1. Patrick
    13/04/2009 at 8:29 am Permalink

    Amazon and eBay happened because people were able to communicate better. That was phase I.

    Phase II dealt with the break down of distribution channels and the what turned out to be artificial scarcity due to information being distributed on physical media. A computer can create an exact duplicate of something digital with negligible costs, meaning that the gate keepers (distributors) of recorded media no longer had any but artificial (and undesirable from the consumers’ point of view) control. The only thing the Music Industry was able to do was attack their own customers, trying to retain control – and it didn’t work. While the lawyers continue to try to preserve the RIAA’s outdated business model, trying to turn back the clock, the rest of the world is moving on.

    The third phase was a bit more complicated, but I think more related to the sports industry than the first two. This was the eating away of the newspapers’ revenue streams as the world turned to the Internet for news. While the newspapers are all trying to blame Google for taking their revenue streams away, it was really Craig’s List that did it. If anything, Google kept the news sites relevant much longer than they actually were. Personals and want ads are what traditionally paid for newspapers, followed by a few large ad campaigns. The news itself never did.

    Yet AP and others are now trying to base their survival on selling news (since Craig’s List does local want ads better for less). When they move to selling news, they basically move into the entertainment and advertising business. It’s entertainment because they have to write things that people will “enjoy” reading. And companies pay the news organizations to run their PR as though it were an actual news article (Forbes, The Wall Street Journal, and others are all basically Microsoft shills, already do this for years).

    Local newspapers need to become relevant locally again. But I’ve spent too much time on this topic already. How is it relevant to baseball?

    Look at how well (or not so well) NPB has dealt with the web. Their attempts at streaming games on the web have all been impaired by artificial restrictions like Microsoft-only DRM (Data Rights Management) crippled streams which used Global DNS filters to restrict the broadcasts to Japan only. They’re going down the same road of trying to restrict what people may do with their content as all other content providers who have failed before them. Unless they embrace Open standards available on multiple platforms without restrictions, they will not be able to grow their business domestically or globally. They’re just going to continue to make the online experience more trouble than its worth, and not attract the younger generation through the web.

    But all is not lost. Last year we found ways around the GDNS by using proxy servers and many people still suffering with Microsoft Windows on their computers were able to find a use for their outdated operating systems and enjoyed NPB outside of Japan. We also found Justin.TV, a service that gets around all of the defective-by-design DRM that content providers insist on, and uses cross-platform technologies, allowing people throughout the world to enjoy NPB regardless of operating system. Fans want their content their way.

    And this last statement is something that MLB.TV really needs to learn as well. Black out areas? There should be no such thing. My uncle complains that it’s a 8 hour drive to San Francisco – not a drive he can make every day. Yet, MLB.TV blacks out San Francisco home games in his area – the very area where they could best sell their service!

    NPB and KBO have been at war with the rest of the world for years, trying to restrict the flow of information outside of their borders. The recent WBC seems to have loosened both organizations’ grips as more and more information is starting to flow in English. (And through the web-based newspapers no less!)

    MLB has figured out how to market to a global audience. NPB and KBO need to figure this out, too. But they need to remain relevant locally as well, as the locals will be more likely to make purchases. There is so much that the web can do to help them, but their attempts so far to retain full control over everything does not paint a reasonable picture. They need to be partners with the web communities, build and nurture them. If they can do that, then they won’t be the fourth phase eaten by the World Wide Web.

  2. Patrick
    13/04/2009 at 9:15 am Permalink

    Personals and want ads are what traditionally paid for newspapers, followed by a few large ad campaigns. The news itself never did.

    While that’s true, the news content enabled the papers to monetize those channels. Volume makes advertising more valuable, and good news content attracts a higher volume.

    And also there’s a minority in America that’s willing to pay for news content — NPR subscribers. You and me are kind of like NPR in a way, I think.

    It’s interesting that NPB observers were always scared by the departure of star players to MLB, but it might turn out that the availability of MLB baseball products to consume online may be the bigger threat.

    But on the other hand, Japan now has 16 independent teams, Koshien is as big as it’s ever been and I think the Industrial Leagues will get more attention this year thanks to Junichi Tazawa. Add that to the greater availability of MLB coverage and it’s a great time to be a baseball fan in Japan (or anywhere). The business of it all may be a different story though.

  3. Patrick
    13/04/2009 at 12:19 pm Permalink

    I understand that MLB in Japan is greatly limited — NHK usually shows games from a select few teams – Seattle, Yankees and a couple others. And of course subscribers may only watch archived games in Japan. It seems likely that if MLB wants to keep kosher relations with NPB they will seek to keep from enfringing on NPBs market.

    MLB also protects its markets via blackouts of home games based on subscriber location (in some cases this can include up to half dozen teams).

    Wihtout a doubt blogs such as this do not have hardcopy equivalents. Great blog btw.