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Will MLB offering changes mean higher prices to viewers?

Major League Baseball is considering combining its two primary subscription offerings for out-of-market games – Extra Innings and MLB.TV – into one. A motivator is to increase their bargaining leverage for their in-house network, MLB Network, with cable systems. This news comes from SportsBusiness Journal’s John Ourand, quoting MLB Executive Vice President of Business Tim Brosnan.

Though not positioned as being a pro-consumer move, it may be spun that way, potentially opening up alternatives to baseball fans. While both offerings enable customers to view varying quantities of MLB’s out-of-market games (always within the existing territorial and blackout rules), they have been totally separate. In other words, a subscription to the television package on cable or DirecTV does not enable one to view the same games on-line, and vice-versa.

The SBJ article notes that the growth of the MLB.TV on-line offering has been fueled by boxes such as Apple TV and Roku that enable the internet stream to be viewed on televisions as well as computers. Correspondingly, sales of the Extra Innings package have been “depressing,” says the report. The systems carrying EI are the same ones carrying MLB Network.

This isn’t just a new technology issue. It is very much about money – and choice.

Let’s look at this from the consumer’s view.

Last season, Extra Innings’ list price was $223.96. The package provided “over 80 out of market games each week including up to 40 games in HD.” In other words, all games were not offered.

MLB.TV’s base price was less than half, at $109.99, or $124.99 for their Premium offering. The latter allowed selection of home or away broadcasts, DVR-like controls, multi-game windowing and other features.

MLB.TV also offered more games with more of them in high definition for the lower price, touting availability of “every out-of-market regular-season game live or on-demand, generally in HD quality.”

Further, MLB provided their minor league offering, MiLB.TV, to MLB.TV customers at half price, $20 versus $39.95.

Granted, MLB.TV has not been as reliable as EI. Overall, the internet is less reliable than cable, though that gap is closing.

Also, one does need an interface box to watch MLB.TV on a television, but many already own a Roku for Netflix, a PS3 or Xbox 360 for gaming or an LG, Panasonic or Samsung TV or Blu-ray Disc player, for example.

Given all that, is there any wonder that Extra Innings has been struggling while MLB.TV has been growing?

So for 2013, the $64,000 question for consumers is this: If the two offerings are combined, what will be the price?

Would MLB risk alienating their fastest-growing market segment, the on-line buyer, by jacking up MLB.TV’s price under the spurious claim of giving more choices to the viewer who already has it all? What choices are available to unhappy fans?

Or will MLB drop the price of Extra Innings to the current level of MLB.TV? That move would recognize the reality that EI has been a non-competitive offering – with higher prices and fewer games having been available. Would cable and satellite providers be satisfied with a lower price if it put them on a more level ground at which to compete with the on-line product?

Is this all secondary to MLB’s desire to maximize revenue for MLB Network? Will MLB put the consumer in the back seat as they make whatever moves they determine will best enable them to increase penetration of MLB Network while securing greater per subscriber rates from its carriers in the future?

In the past, MLB has been criticized for their low levels of sensitivity to the customer in their chase for the dollar. Let’s hope this time will be different.

February 5 update: MLB has just announced its 2013 MLB.TV prices (for mobile and connected devices, not cable or satellite). In what has to be considered good news, they look to be the same as last year. The basic offering is $109.99 and the Premium is $129.99. The latter includes the At-Bat subscription and other benefits.

There is no mention of any ties to MLB Extra Innings, so perhaps that idea was tabled for 2013.

Details here.

On the DirectTV website, MLB Extra Innings can be ordered for $199.95, though I cannot tell if the page has been freshly updated for 2013.

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Brian Walton

Brian Walton runs The Cardinal Nation and The Cardinal Nation Blog, covering the St. Louis Cardinals and minor league system.
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52 Responses to “Will MLB offering changes mean higher prices to viewers?”

  1. blingboy says:

    I’m sure the idea is to increase revenue. Hopefully, the product will be better as well.

    • Brian Walton says:

      Of course, but the rub is how revenue is increased. Higher per customer cost or increased penetration? Hopefully they just drop the price of EI to get more cable customers carrying MLB Network and leave MLB.TV alone. Since I can already see all the games (usually in HD) via MLB.TV, I don’t need any more and don’t want to pay extra for bundled services I won’t use.

      • blingboy says:

        I’m not advanced enough to have an opinion about all that. I just recently got MLBTV added to my Charter cable service, and had to also get (and no doubt pay for) some other stuff I don’t want as part of the upgrade package. I was already getting all Cardinal games, so its not like its a must have for me. I get that its a matter of interest for Cards fans living elsewhere.

        • Brian Walton says:

          The terminology is a bit confusing. I should have defined it up front.

          MLB Network. A special TV channel with MLB programming, including a few out-of-market games each week. Usually offered as part of a cable or satellite package.
          MLB.TV. The internet-only offering to watch out-of-market games. Separately priced.
          MLB Extra Innings. The cable/satellite offering to watch out-of-market games. Separately priced.

          You are right in that the MLB.TV/MLB EI pricing is not an issue for those who live in their favorite team’s territory and don’t care about watching other games.

  2. blingboy says:

    There has been quite a bit of discussion about what the Cards might/should do in the area of 4th/5th outfielders. I’m up in the air about it, and honestly haven’t had the time or inclination to think it through.

    But I happened to see that the Marlins hired Juan Pierre for 1yr/$1.6M. That might have been a useful addition. Not the least because he’s supposed to be a positive clubhouse stand up guy.

    We shouldn’t forget that there was a certain air of underachievement last year. That sort of thing doesn’t spontaneously fix itself. Not that Juan Pierre would have been the answer. But niether will a Randy Winn or a Corey Patterson type.

    Robinson and Chambers are good org guys, and maybe Chambers will pan out, but I think the roster spots could be more profitably used.

  3. JumboShrimp says:

    Shane Robinson is the new So Taguchi, right swinger who can play CF. Mo is probably happy with Robinson and Skip or Chambers as extra OFs.
    The 2013 bench could be Cruz, Kozma, and Robinson from the right side, Carpenter and Skip/Chambers from the left.

  4. JumboShrimp says:

    Its fun to pass away the winter with dreams, though the roster is pretty full already. We enjoyed Taguchi for a few years.
    For a bench player, you want somebody to make contact, run, and defend several positions. Kozma, Carpenter, Chambers, Robinson, and backup catcher would be a fine bench, better than most years.
    If we wanted a bench player who could slug, it would have made sense to protect Steven Hill.

    • Brian Walton says:

      Keep the sights low, so there will be no disappointment – until they start playing games, that is…

      • crdswmn says:

        No one would accept that because it is the same sorry bench we had in September and the postseason.

        Who needs dreams, that’s a nightmare.

          • JumboShrimp says:

            It helps Mo for the fans to drone on about bench players, while Mo focuses on getting a second lefty reliever. Thanks!
            I wonder if this platelet injection therapy can replace Tommy John surgeries? Maybe in future they will be known as Raffy Furcal injections, after Raffy returns in fine form.

            • crdswmn says:

              So I guess in the half a dozen interviews where Mo said he was looking for a RH bench bat, he was just kidding?

              You’re slipping Jumbo.

              • JumboShrimp says:

                You listened to Mo and heard nothing about a backup catcher, as I predicted, accurately it turns out. Last winter, you were outraged the Cards had not told you Pujols would leave. I do not know why you listen to Mo. Sometimes his declared intentions turn out, othertimes they do not.

                • crdswmn says:

                  A minor league contract for a catcher to replace Anderson in Memphis hardly constitutes a search for a backup catcher.

                  I have no idea what you are talking about with Pujols. I said from the get go he would likely not sign because he needed the big money to satisfy his ego.

                  Jumbo, you are almost amusing……..on second thought, no you’re not.

                  • JumboShrimp says:

                    We must have catcher depth. Johnson and Cruz are suitable backups. One will be on the ML roster, the other at AAA. Johnson spent 3 years with the Mariners. The Cards have more catching depth for 2013 than they enjoyed during 2012. Its an upgrade.

              • JumboShrimp says:

                What is a GM going to say? I am looking for hitters and pitchers. What else is there to say? This covers all the bases. Its safe. It gives fans hope. Smart.

            • Nutlaw says:

              Jumbo, sometimes I feel like we’re engaging in a game of Mad Libs here.

              “It helps (name) for the fans to (verb) about (player designation) while (name) focuses on (task). Thanks!”

              The resulting sentence doesn’t make any sense, but I guess that you keep trying in hopes of finding an amusing combination.

            • Brian Walton says:

              How did that platelet process work out for Bartolo Colon? Maybe it is more effective if a chaser of your “muscle helpers” is included…

              • JumboShrimp says:

                Athletes can be helped by effective chasers. We just have to hope Raffy has smart medical advisers who can get him back into fighting trim. Mo seems encouraged.

  5. WestCoastbirdWatcher says:

    The plan was to establish a feeder system…… The actual quality of that feeder system is where the “showman ship’ comes in…….. These issues are all control factors in a perpetual 5 year plan. 1 and 2 yr corrections have a direct correlation to the “integrity” of the 5yr plan………….or appearance of integrity………… just wait and you will soon find the course corrections will be powered by the value of the ponies already in the stable. You will see favored players traded for players needed. …… all young….. it a great financial strategy…………. It took 5 yrs to achieve……. any quality player brought in, is going to illuminate issues with the Cards new ” philosophies” ………….. 5 team division means win it your no October……….. Garcia is toast…… If Carp has to pitch under duress (low run support) he won’t last long……… If Adam struggles against his contract posture………. never was there a tale of more woe………… than that of Jumbo and his and his Moliette……..

  6. blingboy says:

    I noticed we signed a pitcher from the Dominican Prospect League, Yeison Medina. $17,500 probably buys his family a house. Don’t they have any shortstops there?

    Anyway, I notice his player page doesn’t have a date of birth. They’re probably still waiting for the ink to dry on the docs. Will he be Rule 5 eligible in 4 years or 5?

  7. blingboy says:

    Article about how tax increases due in 2013, and differences in State tax rates might affect things.

    “. . . Ontario’s provincial tax rises to 11.16 percent . . .

    . . . Among states with big league teams, income tax rates go as high as 10.3 percent in California and 8.82 percent in New York. At the other end, Florida, Texas and Washington have no state income tax. ….

    … According to an analysis done by a tax lawyer on the staff of agent Scott Boras, a player with a $10 million salary and average deductions who plays in Florida and is a resident of that state will see his taxes rise from $3.45 million this year to $4.09 million next year under current law. If traded to the Blue Jays, that player’s 2013 tax would rise to $4.27 million. And if dealt to a California team, the tax would go up to $4.4 million.

    By moving money from salary into signing bonuses, players can sometimes lower their state tax bills. Shifting money into December this year could reduce federal taxes.”

    Note the part about shifting money into December 2012. Maybe there will be a lot of activity. Maybe we will see contracts with unusually large amounts of the total as signing bonus.

    I also noticed Marlinland has no state income tax while BlueJayland has 11.6%. Ouch.

    Billy Beane says it mostly affects high dollar players and big spending teams. He doesn’t think it will come up much in Oakland.

  8. Brian Walton says:

    See the update on the MLB.TV/MLB EI situation appended to the bottom of the original post.

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