Module 7 Assignment - Case Study: YES Network and MLBAM

Case Study: YES Network and MLBAM Name Institution Course and Code Professor Date Case Study: YES Network and MLBAM The history of partnership between the YES Network (YES) and Major League Baseball Advanced Media (MLBAM or BAM) illustrates how digital transformation changed regional sports networks and professional leagues. BAM became a solution owned by the league but converted to one of the leading streaming services providers whereas YES tried to defend the local broadcasting rights and maintain the sustainable development. According to Stanford Graduate School of Business (2011), and TechCrunch (2015), the economics of paid content and the business model of BAM are crucial in the decision of making a win-win deal. BAM’s Business Model, Drivers of Success, and Key Threats The business model of BAM started as a centralized digital platform that was developed to operate all websites of the MLB clubs and online ticketing (Stanford Graduate School of Business, 2011). Eventually, BAM grew to be a tech-focused streaming platform, and offered MLB.TV subscriptions, operating team websites, and providing third-party streaming infrastructure to its clients including HBO, WWE, ESPN, and the PGA (TechCrunch, 2015). The change made BAM a B2C content distributor and a B2B service provider. The success of BAM lies in its timeliness in the area of live sports streaming, since in 2002 the organization started its operations, and by this time the organization had fine-tuned its systems before its competitors had entered the market (TechCrunch, 2015). The MLB 2,430-game schedule also needed to be organized, and this necessitated the creation of large-scale infrastructure to cater to thousands of live events on a yearly basis. The paid-content model of BAM increased the expectations of reliability and generated a stable income with the help of MLB.TV subscriptions. Additionally, BAM had the technical expertise, scalable platform and the capacity to provide high quality mobile and connected-device streaming which made it an attractive partner with major media companies. Some threats that BAM deal with include the increasing expenses of continuously developing its technological infrastructure and labor force to satisfy streaming needs (TechCrunch, 2015). It is also competing against other large tech companies such as Apple and Amazon joining forces in sports streaming. Furthermore, Stanford Graduate School of Business (2011) notes the alteration of league economics, blackout rights and fractured sports rights bring about uncertainty and adversely affect the long-term market stability of BAM. Economics of BAM’s Paid Content Model The economics of BAM is largely reliant on the direct-to-consumer (DTC) paid subscription model, mainly the MLB.TV. It is a good model, as it provides stable income, loyalty of fans, and the incentive to improve the quality, as once they pay they get impeccable service (TechCrunch, 2015). Paid content is also a good fit with the need of younger consumers to consume mobile, sharable, on-demand video. Nonetheless, B2B streaming services have gained more significance. BAM has diversified revenue and eliminated relian...