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  • CFO IT

Whole New Ball Game

The first decade of E-business was not an unmitigated field of dreams, but some companies are once again ready to take the field.

Ten years ago, as netscape’s IPO kicked off the dot-com boom and Amazon.com and eBay brought E-tailing to Main Street, Major League Baseball (MLB) was doing some innovating of its own. The league introduced a new round of play-offs, dubbed the Division Series, to great acclaim. It also scrapped a much-criticized scheme in which it produced its own baseball telecasts and rotated games between ABC and NBC. Under that plan, no play-off games except the World Series would win a nationwide TV audience. Sports Illustrated quipped that this reduced baseball to “America’s regional pastime.”

Win some, lose some. A decade later, not only has MLB sorted out its broadcast strategy, it now reaches a vastly wider audience than ever — thanks largely to its embrace of the same technology that burst onto the scene in 1995. Seeing in the Internet a chance to extend its brand in entirely new ways, the league launched MLB.com in the spring of 2001 and, by any measure, hit one out of the park.

But wait. Having seen the dot-com collapse take so many promising ideas down with it, and having failed at its own effort to control its broadcast destiny, wasn’t MLB skittish, to say the least, about its belated plunge into an entirely new business model? “I think there is a certain fear for established brands to make a run of it on the Internet, given the mistakes others have made,” says Jeff D’Onofrio, vice president and CFO of MLB Advanced Media, the New York-based company that owns MLB.com (and is in turn owned by the 30 teams that make up MLB). “But if companies can couple the financial discipline of their traditional business model with creativity, some of that fear may dissipate.”

Some companies are doing precisely that. While manufacturers and retailers are now overcoming obstacles that made direct selling via the Web difficult (see “Old Dogs, New Clicks,” Summer 2005), other companies are going even further, developing entirely new business models that capitalize both on the capabilities of the Internet and on the failings of those that came before. While their approaches vary, they all reflect, as D’Onofrio says, a balance of prudence and boldness. They have, it seems, needed the wisdom of Yogi Berra: “You can observe a lot just by watching.”

Ten years on, “people are just beginning to grasp the potential of the Web,” says Dale Peskin, co-director of The Media Center, a Reston, Virginia-based media think tank. “They’re recognizing that the Web fundamentally changes the transactional relationship between goods and services, creating huge opportunities. That said, most companies, for a number of reasons, whether culture or a comfort level with what they’re already doing, are reluctant to grasp the idea that the Web is more than just another channel.”

Restoring Vision

MLB president Robert DuPuy and commissioner Bud Selig did grasp that idea. “They figured we could control our destiny in the interactive media space by taking the content of baseball and delivering it on the Internet,” says D’Onofrio.


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