*supercollider

So you’re past looking at the web as just another broadcast advertising channel, and rather a place to connect and engage with people interested in your brand, and offer them something of value. What’s next?

How about not just extending your product or service into the digital space, but enhancing and profiting from it?

While the RIAA were off litigating their consumers and watching their business model erode, another major content owner saw digital not as a threat, but as an opportunity.

Major League Baseball has also faced threats to its business model from YouTube and P2P TV services, but rather than turning to their lawyers BusinessWeek tells how they instead looked to innovate and use the power of digital channels to provide a truly enhanced product offering to their hardcore fans.

How did they get there?

Focus on the customer

MLB started with a vision of what they could provide to their fans that would be of significant value.

They stream games live via the web, so you can follow your team whether you’re in Boston or Bangalore.

They package clips for mobile, so you can check video highlights wherever you are.

And they provide in-depth data about the games that you simply couldn’t get anywhere else:

An obsessive fan could get lost in all the data in the MLBAM archives. There are video clips of each major event in the league’s games this season. Statistics are available on how particular players have done against a starting pitcher. The site has final standings for every season back to 2001, too. “It’s much more than what you can get on television,” says Jupiter’s Tulsiani. “It taps into the base by offering multiple camera angles, stats, and on-demand video.”

Rather than thinking about how to simply rebroadcast the exact same content and squeeze a few more dollars out of their audience, they thought about how they could use digital channels to offer an enhanced experience that fans would appreciate and be happy to pay for.

Spending money to make money

Next, they invested in the technology and people to make the vision real:

The key to the operation’s success is video editing software the league designed from scratch. The program lets employees produce highlights in just a few minutes, which is important because the group is sending out about 200 highlights a day during the regular season.

They’ve also built a 60-strong division, Major League Baseball Advanced Media, dedicated to producing and driving the service forward.

That’s a major investment, but it reflects the scale of the opportunity and what’s required to make the most of it by doing it right.

Results

MLB’s decision to provide a valuable product for their fan base and investing to go after the opportunity is paying major dividends.

MLBAM pulls in $450 million a year, half from customers paying for extras, and half from advertising along free content. Other sports leagues are paying to use MLB’s infrastructure to stream their own content. And all audience metrics are up, including rights fees, attendance and viewership.

As Bob Bowman, chief exec at MLBAM says “If you serve the fans, you take care of your business.”

See the full article at BusinessWeek, and credit to Levi Sumagaysay at GMSV for pointing it out.