March 27, 2001 11:40 AM PST
Real catches baseball deal--at a price
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RealNetworks pitches deal to baseball fans
Larry Jacobson, COO, RealNetworks
Under a deal announced Tuesday, Major League Baseball said it has licensed its Web radio broadcast rights to RealNetworks for $20 million for the next three years, an exclusive deal that will force fans to pay a monthly fee for online access to games beginning this season.
The agreement comes as Web publishers are reevaluating strategies of offering free products in a bid to drum up traffic and sell advertising. That business model proved disastrous when ad sales pulled back amid skepticism over the effectiveness of online marketing.
Now, many companies are experimenting with subscription fees--a move that only months ago was seen as the kiss of death. In recent weeks, online publishers Variety.com and Salon.com launched paid versions, while others are testing new premium services for a fee.
RealNetworks will let people listen to the baseball broadcasts if they pay $4.95 a month for its RealPlayer Plus software for at least 6 months. Typically, the company charges a $29.95 one-time fee to download the complete version of RealPlayer, which is also offered in a free version with fewer features. Alternatively, people can pay $9.95 a month for its GoldPass subscription service, which also includes National Basketball Association audio broadcasts.
The deal is a setback for fans but a coup for RealNetworks, which is engaged in a heated market share battle against Microsoft. The software giant has been aggressively courting content providers to use its Windows Media technology to broadcast audio and video over the Internet.
"Just as much as they want to be a media player, they don't want Microsoft to sign exclusive relationships to give them more market share," said Patrick Keane, an analyst at Jupiter Research.
The deal also spells the end to an agreement between MLB and Yahoo's Web broadcast arm, which had provided streaming services to the league since 1998.
Bob Bowman, chief executive of Major League Baseball Advanced Media, said access to Web broadcasts will eventually be limited to only RealNetworks' Real.com and the league's Web site. Currently, the league has partnerships with many local affiliates' Web sites, which also have agreements with Web portals such as Yahoo. Those deals will eventually "migrate" to strictly Real.com and MLB.com, he said.