Zach Ashburn
DMBA 6216
Case Study for MLB Advanced Media (BAM)
Company profile
Established in 1999, BAM’s original purpose was to improve Major League Baseball’s
competitive balance by redistributing profits equally between all MLB clubs. Today BAM
generates around $440million in revenue per year from ticketing, paid content, advertising,
merchandising, and sponsorship. i BAM functions in business-to-consumer and business-tobusiness models. BAM has successfully developed a full product line including MLB.com,
MLB.TV, and the At Bat app for iPhone and iPod Touch. BAM offer’s products users can access
anywhere at anytime through their desktop or mobile devices. BAM’s products are estimated to
generate a combined revenue of $475 million 2010.ii
Business situation
Due to the recent unveiling of Apple Inc.’s mobile device the iPad, BAM is developing an
application unique for the platform. BAM wants to mimic the success of their highly popular
iPhone app At Bat, while maintaining clear distinctions between the two applications. How
much the two apps should differ is an issue of debate within the company.
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Naming the new iPad app is vital to the app’s success. Continuing to use the name At Bat
could build upon the existing name recognition for the At Bat product. However, having
the same name could mislead consumers into thinking both apps offer identical features.
 The At Bat iPhone app offers free live-streamed games. BAM could charge a-la-carte for
games on the iPad app in order to promote MLB.TV subscriptions. In doing so BAM
runs the risk of turning consumers away from the iPad app due to the additional charges
for streamed games. However, by offering games for free BAM is losing additional
revenue that it could be making through additional subscriptions.
 Starting in 2010 BAM will raise the price of the At Bat iPhone app to $14.99. BAM
could charge the same amount for both apps in order to boost customer satisfaction.
Charging equal amounts for both apps will reduce each product’s distinctiveness, as well
as constrain consumer’s ability to differentiate features between each app. Charging
more for the iPad app will help differentiate it from the iPhone app. However, the
increased cost may lower the perceived value of the new app and drive customers to
choose the old app instead.
Analysis
The At Bat name posses established name recognition that could be a strong foundation
when launching new iPad app. BAM’s, At Bat for iPhone app launched in 2008, and was the
“No. 2 selling app on iTunes in 2009”iii. Since it’s launch, the At Bat app has been downloaded
about two million times.iv The At Bat app utilized the success of the iPhone and iPod when it
launched in 2008. The first iPad launched in 2001 and the iPhone followed in 2007. As of 2010
both platforms had combined for over 290 million units sold.v The iPad has yet to launch and
therefore lacks platform user base. Although highly hyped some consumers may not see the
need for an iPad due to its lack of separation from the iPhone and iPod. One consumer said,
“From a physical hardware perspective it very much seems a big iPod Touch.” vi The lack of an
established platform user base could impact BAM’s initial iPad app sales. However, changing
the iPad app’s name would even further reduce iPad app sales. The At Bat name brings brand
awareness that will help drive app sales through possible slow initial iPad sales.
Zach Ashburn
DMBA 6216
BAM was unable to establish a payment model in time for the launch of At Bat’s video
streaming debut. BAM hastily came up with the “1 or 2 free games as day concept” for video
streaming services on the At Bat app. When BAM tried scaling the free game feature back, “the
comment boards went crazy”, and BAM was forced to continue free streamingvii. Even while
offering free games MLB.TV still has over 1.5 million subscriptions. Of the 1.5 million 71% of
those subscriptions are the more costly Premium Subscription package. With the launch of the
iPad, BAM has ample time to develop a payment model for their iPad app. Due to a 9.7inch
screen BAM believes that video will be a much better user experience on the iPad. The
additional screen size will create value for the user by offering a “whole new experience to take
advantage of the big, gorgeous interactive screen”. viii With new app features and augmented
specs of the iPad BAM could initially charge for games on an a-la-carte system in order to drive
MLB.TV subscriptions. With 2,500 games a season, fans purchasing games on an a-la-carte
system lose marginal benefit with each additional game purchased. Fans that wish to view more
than the occasional game would increase their marginal benefit by viewing games through an
MLB.TV subscription.
The price of the iPhone At Bat app has been $9.99, however starting in 2010 the price
will raise to $14.99. At the launch of the iPad app BAM wishes to set a price that is appropriate
to the features on the app, but will not turn consumers off. Having an identical price of $14.99
may fail to distinguish the two apps as offering separate features. While a price increase may
dissuade consumers by being too costly.
Solution
BAM should ride the hype of their earned media from the Apple showcase and keep the
same name of At Bat for their iPad app. BAM can drive product awareness for their new app by
feeding off the established name recognition that At Bat provides. Simply differing the graphics
of the app icons will establish the app distinguishably that BAM desires.
By implementing an a-la-carte system in correlation with select free games, BAM can
drive satisfaction while promoting consideration. To increase product value BAM should offer
up to three select games that can be streamed for free on a weekly basis. These games will
include one high profile game and two low profile games. Additional games will cost $0.99 per
stream, and will appeal to travelers and out of town viewers. For the diehard viewers that wish to
view a greater quantity of games, MLB.TV subscriptions will be the viable option. BAM will
promote subscriptions on their owned media platforms, such as MLB.com and team websites.
These websites have over 50 million unique visitors per month and offer a huge audience for
BAM to advertise toix. BAM will push app sales and subscriptions with subscription discount
codes upon the purchase of their At Bat app. When redeemed the codes will qualify the user for
a four month discounted MLB.TV subscription. Free games and discount coupons will promote
consideration for either app.
Finally the iPad app price should increase to $16.99 to signify additional features and
increased user experience. With the implementation of new features and subscription discounts
consumers will be less likely deterred by a price increase, and more likely to purchase the At Bat
app and/or MLB.TV subscription.
Zach Ashburn
DMBA 6216
SWOT Analysis
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Strengths
Uses established name recognition
Keeps clear product distinction
Promotes Subscriptions while maintaining customer satisfaction
Weakness
Price increase could turn off consumers by lowering perceived value
Using the At Bat name could limit app distinctions
A-la-carte pricing system could dissuade consumers from purchasing iPad app
Opportunities
Use iPad specs to increase MLB.TV subscription base
Promote brand through earned and owned media
Add additional product line to BAM’s product library
Threats
iPad could fail to sell due to it’s similarities to iPod touch
Local TV blackouts could diminish app’s product value due to local network’s exclusive
rights
Higher earning MLB teams could demand end to shared revenue platform
Zach Ashburn
DMBA 6216
Endnotes
Page 1, Paragraph 2, line 5 and Page 7, BAM’s Revenue Sources, Paragraph1, line 1-2
Page 6-, BAM in 2010, Figure A
iii
Page 10, Mobile Applications, Paragraph 1, Line 2
iv
Page 13, Paragraph 3
v
Page 11, Apple’s iPad, Paragraph 2, line 1 and 7
vi
Page 12, Apple Unveils iPad, Paragraph 4, lines 4-6
vii
Page 13, Paragraph 4, line5
viii
Page 12, Bam Takes Stage, Paragraph 1, Line 3
ix
Exhibit 5
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ii