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Exclusive: The Score CEO John Levy Talks the Future of Sports Media
If you live outside Canada, you may be more familiar with ESPN than The Score. However, new media is changing the landscape and The Score has been unleashing their content globally. For example, The Score proudly offers the most downloaded sports app for the iPhone. This is just one way ESPN’s near monopoly may start to take some serious heat.
I caught up with The Score CEO John Levy to hear how his family pioneered cable in Canada, his plans to roll out The Score into the global marketplace, and how technology is changing the media landscape …
Damien Hoffman: John, how did you enter the sports content business?
John Levy: Once we were over over a million homes in Canada with our cable distribution, we had to get a license. In Canada, our equivalent of the FCC is called the Canadian Radio Television and Telecommunications Commission (CRTC). Media is a lot more regulated here than what is or was in the States. Not only did you need money and a good idea, but you needed a license from the federal government to be able to broadcast. And the definition of broadcasting was if you had any video involved in the service.
We didn’t have any video, but thought it would be great to add video highlights to our data. I knew it would work in Canada even though TSN was the major Canadian sports network that was doing hockey. We went to the CRTC and said we want to do sports news and information with video highlights — no games. They granted us a license in 1996 and we were in business.
With our license in hand, we became a real cable service — a specialty service — and got in over six million homes. We’re closing in on seven million homes now and the service has continued to grow since then.
Damien: Can you share the highlights of your growth with The Score?
John: At that point, people were coming to our service for a quick update. They got all the information and then went to get the live programming. In fact, we actually told our users where the other games were being held. It was totally unorthodox. There was a point in time when TSN and another sports service were going to merge. So, we went back to the government and said, “You don’t want there to be only one sports service in the country. Why don’t you let us do a limited amount of live event programming and games?” They believed in what we were doing and gave us the extension to do live games.
Then we were really trying to act like the big boys. We went and signed a contract with Major League Baseball and had to make that work on a ten cents subscriber fee — not a $1.20 or a $1.50 like the other guys were getting. We didn’t need too long to figure out that at ten million dollars a year for the rights fee, we weren’t going to be able to support the business with even increased advertising.
Although MLB did work wonders for bringing new eyes to the network, legitimizing us, and giving us the ability to sell at a different level with our advertisers and sponsors, truthfully it almost killed us. So, we negotiated our way out of that after about three years. From that point forward we have only secured live event programming or games that are profitable for us.
Damien: Sports media is a competitive business. How has The Score differentiated itself from TSN, ESPN, etc.?
John: It’s younger than other sports networks by about five to seven years. We have made a huge push into the new platforms such as our mobile application, our web application, and our satellite radio services. We treat the TV side of our business as just a platform. It’s nothing more, it’s nothing less. Although it’s still eighty percent of revenues, the other platforms are growing very quickly at much higher margins. The new platforms are also allowing us to expand into the US and other areas where we’re not bound by legal restrictions. We are very excited!
Damien: It’s exciting to watch entire industries transform as technology starts delivering on the bigger promises that were a bit early in 1999-2000. From your 10,000 ft. view, how is technology changing the media business?
John: The broadcast industry is totally turning upside down. There’s a complete reverse-thinking in terms of how the networks are going to survive. We might own the technology in the physical sense, but the net and mobile devices have completely empowered people who are participating in the networks.
It’s not about watching TV anymore. That was gone long ago. The advertisers knew that was gone long ago, but nobody was questioning whether any of it was working. How long has it been since you guys watched a commercial? When we started our service, we were the first ones to keep the sports ticker on during ads because we didn’t want people to go away. Selling 78% of the screen to advertisers was a hard sell initially, but we said, “Do you want 78% of something or 0% of nothing?”
Your new daughter will absolutely not watch TV the way you did. She will be online. She’ll be on mobile devices. The TV won’t be a TV — it will just be another platform. She’ll be doing three things all at the same time, and unless you create content and connect with that audience in a way that is entirely different than what traditional TV entertainment has led us to believe, you’re going to get dusted. That’s exactly why major networks are falling apart. Even cable channels aren’t immune to that phenomenon. If viewers want to watch something, they want it anytime they want, anywhere they want.
Damien: Since advertisers support the content business, and advertisers must reach their audience to produce a return on investment, it follows that content providers will either adapt to consumer desires or watch their ad insertion orders disappear.
John: Exactly. P&G — one of the biggest advertisers in the world — recognized the change. They’ve known for a while that they’ve got to reach out to companies that are creative — companies trying to figure out ways to connect with the audience in such a way that they’re going to engage with the advertiser’s products.
We are pushing all three platforms: TV, net, and mobile. I think that’s the wave of the future. The thirty second ad will not die because for as much You Tivo and fast forward, there are still millions of people who don’t.
In reality, the advertisers are getting sloshed at the margins and they know they must figure out another way to connect. That’s where networks like ours and others are working diligently to rethink how to listen and engage our audience.
Damien: You guys have had the number one app on iPhone and now Blackberry. How important is mobile, and where does it fit into your strategy?
John: As quickly as the web has developed, mobile is growing twice as fast. So, you can’t sit on just a web platform.
We launched Score Mobile about three years ago — pre iPhone. Even before iPhone was for sale in Canada, we had our guys develop the application for their store store. That was a huge success for us. Then, we did the same thing with Blackberry when it launched the app store several months ago. Right now we’re the number one sports app on Blackberry anywhere in the world.
I don’t have a TV network in the States we can use as a marketing tool to push people to our mobile device. It’s strictly being gauged on the merits of the property itself. Within a couple years from now, our wish is that people will recognize Score as a sports media content company that has an authentic international and universal brand representing sports. We are building an open environment — a very comfortable place to interact and communicate about sports.
Oh, by the way, we also have this little TV network in Canada that’s already started. But that’s sort of secondary. We’re pushing into big markets. That means big numbers if we can do something well and tap into something that’s universal.
The key for us is to take off the blinders, be very attentive, understand that we don’t own the brand but the community owns the brand, and just try to be as authentic as we can. We need to be real — don’t bullshit anybody. If we can can do those things and tap into the passion people have for sports, we have an incredible opportunity.
Sports are all over the world. People are playing cricket in India, hockey in Toronto, and baseball in Brooklyn. It’s all the same thing. Somewhere along the road companies have lost that truth by taking this all too serious. People in suits cannot tell you what’s important or what’s not.
