Associated Press
09-10-07
Colleges cashing in on the Web
DES MOINES, Iowa (AP) - College athletic departments are discovering the click
of a mouse can sound just as sweet as the ring of a cash register.
Schools across the country are transforming their Web sites into one-stop,
multimedia channels with hopes of generating up to $1 million a year. Enhanced
use of the Web also could enable colleges to better target their customers and
raise even more money.
The goal is to entice Web-savvy fans to embrace the school's official site, wallet
in hand.
'Revenue has certainly become more of a focus,' said Nada Usina, president of
XOS Technologies, a Sanford, Fla.-based company that helps schools host Web
sites. 'It does vary, but without question the trend has become more about
looking at profitability.'
Not all schools have seen significant revenue gains from their Web site just yet,
but most are making a push toward audio and video-enabled sites that can
generate a profit through advertising and merchandise sales, online auctions and
premium content subscriptions. The trend comes at a time when athletic
department administrators are under increasing pressure to raise more money to
offset rising expenses.
For instance:
-- The University of Georgia, one of the nation's most successful athletic
departments, expects that revenue from its Web site deal will be between
$425,000 and $450,000 for this fiscal year, up from $200,000 last year.
-- Louisiana State University's athletic department has doubled its Web site
subscription base since 2005 and has a goal of increasing its current 3,500
subscriptions by 50 percent each year. Subscribers pay up to $9.95 a month for
access to audio and video content.
-- The University of Iowa's recent 10-year, $55.1 million deal with Learfield
Communications gave the company the multimedia rights to all revenue
generating opportunities on the Hawkeyes' Web site, according to a Freedom of
Information Act request filed with the school. The site includes advertising, Web
broadcasts, audio and video streaming and premium content. The school's
contract with Learfield is weighted mostly toward TV and broadcasting rights and
venue advertising.
Raising money through the Web isn't a new idea, but the technology needed to
make it happen is, said Usina. The recent mainstream adoption of broadband
Internet connections has made streaming audio and video a much more viable
investment, both for schools and users.
Schools can use multimedia tools to host more advertising in addition to audio
and video, and more fans now have the bandwidth to support those platforms.
XOS Technologies has seen the number of its partnerships with schools jump
from 40 in 2006
to more than 140 as of April. According to Usina, athletic department Web sites
have the potential to become a billion dollar business.
Even schools with smaller budgets, such as Iowa State University, are investing
in digital video cameras and other equipment needed to provide premium content
web streaming. They hope the payoff comes down the line, through subscriptions
that give users access to sports that draw less attention, such as gymnastics and
softball, as well as press conferences and online auctions.
If colleges want to turn a profit from their Web sites, it's crucial they become more
multifaceted, something blogs and many newspaper sites already have done. If
schools can attract enough users, they can create online fan communities that
will ultimately boost revenue through online spending, ticket sales and
fundraising.
'There's plenty of information out there about schools,' said Allen Thomas, an
associate athletic director at Georgia. 'For us to be the official site we've got to
offer as many bells and whistles pieces to keep them ingrained into the Georgia
Bulldogs.'
Compared to the budgets of major athletic departments, which can run $60
million and higher, an additional $1 million from a Web site looks rather paltry.
But David Ridpath, the executive director for a college athletic watchdog
organization known as the Drake Group, said most athletic departments either
lose money or barely break even because of the rising costs of competition.
According to the NCAA's latest revenues and expenses report issued in 2003,
Division I-A schools ran, on average, $600,000 in the red for the 2002-03 school
year before institutional support was factored in. Seeing themselves in a budget
hole, administrators will grab at anything that could help them balance the books.
And every little bit helps.
'In college athletics, we do a great job raising money, creating revenue streams,
but we do a terrible job managing that money,' said Ridpath, also an assistant
professor in sports administration at Ohio University. 'We just continually grow
costs, which means that we have to continue to focus on generating revenue.'
Brian Bedol is the president and CEO of CSTV.com, which has partnership
agreements with more than 200 Division I Web sites. He said while colleges have
the potential to create significant revenue through Web site deals, the main
purpose is to create an online community for the schools' most ardent fans.
'These sites have evolved from a place for the sports information department to
get information out, to really being almost the equivalent of a school's own
channel,' Bedol said. 'The value of the Web site goes far beyond the revenue that
it generates directly, because it really is the way for the university to establish a
direct one-to-one relationship with its most important and valuable fans.'
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