MLB's Real Deal

Major League Baseball's deal with RealNetworks to corral the Internet streaming rights to all baseball games this season hasn't won a lot of friends at radio stations around the country. And it's not because of advertising dollars or local autonomy. According to program directors at many of the league's flagship stations, it's because the deal violates the basic tenet of radio broadcasting: Radio is supposed to be free.

"Radio is free. Radio has always been free. Streaming audio is part of that," said Bob Agnew, operations manager and program director for KNBR in San Francisco, which broadcasts the San Francisco Giants and had streamed the games for the last few years.

"It is ridiculous to try to capitalize on an institution that up until now had been free," said Agnew.

Under the three-year $20 million deal, more than 5,000 game feeds throughout the season are available only on Major League Baseball's site (www.mlb.com) and Real's site (www.real.com). MLB.com offers the season package for $9.95, while Real offers a variety of price points depending on whether the user is a Gold Pass member or has purchased the Real Player Plus. All the games are streamed exclusively in Real's format.

Will Fans Pay?

The big question, however, is whether baseball fans will fork over their funds to pay for the privilege of listening online. "It's a great question because radio has always been a free medium," said Darryl Parks, director of AM operations for Clear Channel in Cincinnati, which owns the Cincinnati Red's flagship station WLW.

Kris Olinger, program director for KIRO-AM in Seattle, which carries the Seattle Mariners, is more skeptical. "We're not happy about it. I don't feel [fans] should have to pay to get the broadcast that they got for free," she said.

But the notion of a free Internet simply isn't a reality anymore, said T.S. Kelly, director of Internet Media Strategies for Nielsen/NetRatings in New York. The climate for a pay model is more in vogue than before, he explained, pointing to sites like The Wall Street Journal online and Salon.com, which charge for content. "The pay model is being tested because the ad model can't support the cost to deliver content. If the pay model doesn't work, the Internet can't work," he said. And, Kelly added, the price for the games is eminently reasonable and should probably attract diehard baseball fans initially with occasional listeners to come in time.

Some argue that listening to baseball for free on the Internet isn't a Constitutionally mandated right. Ken Charles, director of AM programming for Clear Channel in Houston, which owns KTRH, the radio station for the Houston Astros said: "God didn't wake up one morning and say 'You can have baseball for free on the Internet.'"

Charles said that the Major League Baseball deal isn't going to hurt the station since it hadn't been streaming the games previously. In addition, baseball is always going to be a radio game. "You can't take the Internet to the beach, so I don't think this will hurt us at all. You've got to have radio," he said.

Impact on Radio Stations

In fact, most stations agree that the deal won't have a financial impact since those that were streaming games were not basing their ad rates on the incremental audience that the Internet drew.

"When we sell radio, we sell radio. Internet is an add-on," said KNBR's Agnew. Stations aren't receiving any financial compensation from the league either because the league negotiated exclusive Internet rights to the games when contracts were redrawn over the last few years. "We lobbied hard to keep it in our deal," said Agnew.

Streaming the games was more of a listener benefit, said Olinger. The weekly listenership for Mariners games on KIRO is about 250,000 and Olinger estimates about one percent of the audience listened to the game over the Internet. That audience was primarily comprised of former Seattle dwellers listening to the game out of town as well as local folks in downtown office buildings that can't receive AM radio, said Olinger.

Parks estimates about 1,000 people on average listened to a Cincinnati Reds game on the station's Web site before this deal. "It's certainly hurting us a little and we were getting an audience that we weren't getting elsewhere," he said. He's also received a number of e-mails from listeners who are disappointed with the quality of the stream in comparison to what WLW had previously. Parks explained that the audio doesn't sound the same since it is fed to RealNetworks servers through a telephone.

RealNetworks picks up all the games through audio couplers at each station and then encodes the feeds at its Seattle headquarters. When the service first launched in April there were some technical glitches, such as getting the phone companies to maintain the connection for the entire length of the game, admitted Andrew Perez, director of operations for Real Broadcast Network. Those issues have since been resolved, he said.

Another drawback of the deal is that it disrupts programming continuity. According to Olinger, it makes it more challenging to cross-promote the Web site and the on-air station.

Stations are allowed to continue to stream the games until May 1. At that point, KIRO will likely stream a "Best Of" show during the games. KNBR may do the same and is also considering picking up the ESPN Radio broadcast online since it is an ESPN affiliate. Agnew said he plans to make Giants games available on the Web site's archives after they have aired.

Major League Baseball did not return calls for comment on this story.

The AFTRA Effect

RealNetworks is picking up what is known as a "mix/minus" feed from Clear Channel's stations since it has temporarily suspended Internet radio broadcasts as a result of the recent AFTRA controversy. As a result, all MLB games, and even National Basketball Association games are still on the Web.

Nevertheless, RealNetworks has run into security problems with the NBA package since users can forward the URL to a game once they have entered their login information. Real says it is currently working on a security solution. Since there are no URLs associated with the baseball feeds, forwarding is not an issue with the baseball package.

In the end, it's all about the economics of streaming. It costs money to stream content on the Web, said RealNetworks' Perez. He pointed out that online broadcasters need an economic proposition that makes sense for them to offer online content.