I Want My Money Back
By Bret A. Fausett
For those who grew up in Boston, but moved to a place where red socks are simply a sign of poor fashion sense, the Internet has been a tremendous boon. For several years now, radio stations have been streaming local sports programming over the Internet. Even over a 28.8 modem, the radio call of a sporting event is good enough to listen to.
This simple ability to listen to a guy in a press box call the play-by-play of a game when you're thousands of miles away from the stadium is what launched Broadcast.com, and what made Mark Cuban a billionaire.
Major League Baseball and Real Networks knew they had a proven commodity when they teamed up to make the audio of all major league baseball games available over the Internet. In past years, these games had been streamed for free around the world and had proven tremendously popular. But in 2001, "free" stopped being a valid business model, and companies began to charge for audio streams.
They don't charge much, mind you—just $4.95 a month. For about the price of a bag of peanuts and a hot dog, you can purchase streaming audio for every game of every team in the major leagues. That's a pretty good deal. The nominal charge is clearly designed to acclimate users to paying for the service. It's no surprise that the service has proven popular. The price point was probably just right. Low enough to make the value apparent, yet still high enough to condition consumers to pull out credit cards and warm to the idea of a fee-based service.
After getting old listeners on the new payment plan, Major League Baseball and Real Networks must have believed that they'd solved one of the great mysteries of e-commerce—how to make money.
