Net sites
favored by sports nuts point way to future of the Web
April 12, 1999
BY MICHAEL KRAUSS
Do you know anyone who's a "sports nut?"
I have a neighbor
who's a sports nut. He's a great guy. During his annual New Year's
Day celebration, he has six television sets running in different
rooms of his house so he won't miss any of the football play-by-play.
In the old
days, it was easy to spot the sports nuts. They were the people
who read the newspaper from back to front. They started with the
sports section and memorized the baseball box scores and team
standings, often discarding the rest of the paper unread.
The Internet
has been a tremendous boon to the institution of the sports nut.
At
8 a.m. on Monday morning, the sports nut can walk into his or
her office, boot up the computer and hit the Web. Seconds later
they have up-to-the-minute facts and figures on everything from
last night's NBA scores to the status of their fantasy baseball
team as well as the standings of their son's or daughter's local
soccer league.
Despite the
best firewalls corporations can muster, sports nuts are logging
on in increasing numbers. They're visiting ESPN.com, CBS SportLine.com,
Sportingnews.com and CNNSI.com-some of the hottest and most interesting
sites on the Internet.
There's a
lot to be learned from these sports Web sites and the enthusiasts
they serve.
On the plus
side, these sites do much of what the Internet does best: supply
timely, up-to-the-minute content to a highly targeted audience.
They provide the user with a unique and engaging experience, delivering
detailed multimedia content impossible to access before the arrival
of the Internet. The sites augment, enrich and enhance the entire
sports-enthusiast experience-at little or no cost to the customer.
On the downside,
these sites face many of the challenges that content, commerce
and community sites grapple with daily on the Internet.
Take CNNSI.com
for example. Launched in July 1997, the site weds the journalism
of the venerable Sports Illustrated magazine with CNN's 24-hour
television news coverage competence. In conversations with Michael
Klingensmith, president of Sports Illustrated, and Hart Hooton,
general manager of CNNSI.com, they raise these six issues common
to most Web sites:
1.
Revenue generation
The CNNSI
site sells ads and charges fees for its fantasy sports leagues,
but the scale of the revenues is dwarfed by the core magazine
publishing enterprise.
"I can't
imagine the Web site ever having the profit potential of our magazine,"
Klingensmith says. "The economics of the Web today are not
as strong as the economics of magazine-based communication-not
even close. What's missing is a consumer revenue stream.
"Since
the Web grew up as a free medium, you can't get anybody to pay
you for content. Even if you try, there are 10 guys who will give
away the content for free," he adds. One sweetener here is
that the CNNSI Web site plays a significant role as a subscription
generator for the core magazine.
2.
Attracting and retaining eyeballs
Klingensmith
says the site already aggregates plenty of eyeballs, averaging
25 million to 35 million page views per week, recently spiking
as high as 70 million page views in February. Still, that's far
short of the Internet's monster site, Yahoo!, which delivered
167 million daily page views in January.
Hooton points
out that the site attracts eyeballs through its strong connection
to CNN, and Klingensmith adds that the three biggest sports Web
sites now all have "broadcast television relationships."
The implication: Future sites will thrive only if they have powerful
links and meaningful relationships.
3.
Deal-making and partnerships
This is perhaps
the most important art form being practiced today in interactive
marketing. Certainly Yahoo! has perfected it, and Klingensmith
and Hooton are borrowing from Yahoo!'s playbook.
"Business
development deals are the key to success on the Internet,"
Klingensmith says. "To win you need traffic. People are aligning
with the portals to build traffic. Deal-making is everything."
4.
Product cannibalization
Klingensmith
and Hooton have done a nice job of building a Web site that complements
the core magazine product. "The Web site serves to promote
Sports Illustrated, and it sells subscriptions to the magazine,"
Klingensmith says. "It's also used to highlight a major article
in the newsstand version, while enabling us to break sports news
that won't hold for a week."
Market research
demonstrated that sports enthusiasts come to the Web for immediate
scores, fantasy sports leagues and merchandise, and to the magazine
to absorb in-depth content.
5.
Retaining talented people
Recently I
heard a top executive of Yahoo! say retaining talented technical
people is one of their two biggest challenges (the other being
deal-making). That's at Yahoo!.
Klingensmith
and Hooton agree this is critical but say they haven't had much
trouble here: "People like working at Sports Illustrated,"
Klingensmith says. Technical support from the established parent
organizations (CNN and SI) also has mitigated this problem.
6.
Reinventing the business
This is apparently
the most challenging issue. "The Internet isn't going to
be about reading," Klingensmith says. "The Internet
is going to be about watching. People are going to be less interested
in sitting and pouring though a magazine article (on the Web).
It's going to jump over magazines to compete with television."
While Klingensmith
has great enthusiasm and energy for the Internet, he shares the
concerns of many executives who run portfolios of Web-based and
non-Web businesses. "I think the CNNSI site is an essential
to have, but from an economic standpoint it's not yet significant.
Will it be a major profit stream in three to five years? We have
no indication it's going to drive our business, unless we can
get people to pay for the content," he says.
While stock
market capitalizations soar for ".com" companies, many
Web site operators are faced with the same dilemma as Klingensmith.
"Sports on the Web is a big deal but it's not a big-profit
deal," he says. "At least not yet."
The solution
for Sports Illustrated and other Web marketers involves totally
rethinking their business and identifying whole new ways to meet
the sports enthusiast's needs. They ought to reconsider the entire
sports-nut experience and reflect on ways their core capabilities
and tomorrow's new technology can be brought together to deliver
entirely new products, services and experiences. FACE="Wingdings">n
Michael
Krauss is a partner with Diamond Technology Partners in Chicago.
He can be reached at news@ama.org.
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