The new year has barely started, yet I already have a candidate for the eventual list of 2014’s most influential media execs: MLB Advanced Media CEO Bob Bowman. His sports-focused streaming video and Internet operation is poised to become an entertainment power following the announcements at International CES this month that it will drive two potentially ground-breaking new services. On February 24, WWE will launch a subscription-based online video channel, WWE Network, that will include live and on-demand library programming. (Bowman sat on the WWE board from 2003-2008.) And Sony turned heads with its plan to introduce a Web-based pay TV service that will include live programming from channels that are only available now to subscribers of traditional cable, satellite, and telco video services. MLBAM’s state-of-the-art infrastructure already handles live and on-demand streaming for college basketball’s March Madness, CBS Sports, and ESPN3, as well as Glenn Beck’s TheBlaze TV and in 2012 handled Obama for America campaign videos. As its business grows, financial types wonder whether baseball execs might take MLBAM public. So it’s a heady time for Bowman, who became Michigan’s state treasurer in 1983 at age 27 and went on to become COO of ITT Corp. Deadline checked in with the MLBAM chief to find out more about his plans with WWE and Sony, and the prospects for streaming video. Here are his thoughts, edited for length and clarity.
DEADLINE: Why do you consider the WWE Network so noteworthy?
BOWMAN: Economically it’s one of our largest clients for sure. In that sense it’s incredibly important. But what’s more important than dollars is this is the most vertically integrated brand in America. Vince McMahon controls everything soup to nuts — from the idea in his head to how it appears on every screen around the world. And he just demonstrated [at CES] he’s going to try and change what the economic rules are. He’s in an ideal situation to do that. That’s why a lot of the content players are going to watch this very carefully. As we’ve learned with music, a monthly subscription might be better than pay-per-view. It will ultimately be on every device and operating system that’s imaginable. So the ability to take your content live and on-demand to every corner of the globe 24/7 is pretty appealing for a content publisher. All of the great partners that we have — DirecTV, Comcast, things like that — they’re still U.S.-based services.
DEADLINE: WWE’s giving up a pretty lucrative cable and satellite pay-per-view business. It charges $44.95 for TV events, and now they’ll be available online in the $9.99 a month online package.
BOWMAN: Maybe. I don’t think they’ll be giving it up; it’ll still be available. The notion of doing a monthly subscription for terrific content, others have done it before. But Vince is taking it to the next obvious level. He put his fans and customers first and in the long-run and maybe even the short run it will be well received.
DEADLINE: Would this deal have made sense three years ago?
BOWMAN: Yes, I think so. Glenn Beck did his deal three years ago. Is it going to be easier now? Sure. There’s more infrastructure. But the real infrastructure is customer expectations, and that’s the No. 1 thing that’s changed. They’re used to buying soft goods online. They’re doing it two to three times more than they used to three or four years ago. This next generation of fans watches longform video on an iPhone. We never thought that would happen. But they do.
DEADLINE: Will people who are accustomed to watching WWE on television be willing to wait for the image to buffer or long delays?
BOWMAN: A lot of people who buy MLB TV have had good experience with the quality, reliability, and instantaneous nature of it. It’s the Internet, [and] there are a lot of handoffs. But we pride ourselves on delivering the very best product. It is no different in quality, in terms of true hi def, than what they see on their big-screen TV. The video quality today is three or four times what it was just two or three years ago.
DEADLINE: Describe Sony’s virtual pay TV service.
BOWMAN: It will be the linear feeds of the networks. I’m not party to the conversations Sony is having with the networks. But whatever’s on that network, we’re going to capture, encode, and deliver to devices [that are] inside the home already: the PS3, the PS4, and the Blu-ray player. The big difference between this and the Intel [virtual pay TV] announcement — and that’s all it turned out to be — was that no one needs to buy a device. They have an installed base in the tens of millions. That’s obviously going to be their target environment.
DEADLINE: Just to be clear, Sony’s talking about streaming existing cable channels?
BOWMAN: It’s like U-Verse and FiOS. In the end it will be different, but that’s what they’re trying to do – they’re trying to launch another pay TV service that relies on a slightly different delivery mode: [Internet protocol] all of the time, and it’s delivered to different kind of set top box.
DEADLINE: What about mobile or other smart TV devices?
BOWMAN: If they buy the rights [then] it might be delivered to portable handsets. Will it morph into something bigger and better? [Sony] said that they would like it to get to other devices in the years ahead. But, again, you’ve got to get the rights from the right people to be able to deliver this content in different formats.
DEADLINE: Will this be the whole bundled pay TV package or a subset of that?
BOWMAN: Don’t know. Obviously it’s a value equation for both them, the buyer of the content, as well as the customer, the ultimate buyer. They are far a better source on what they are trying to do than I.
DEADLINE: Do you have a timetable on when you expect it to go?
BOWMAN: No. We’re gearing up now is all I can say. When they think it’s the right time to go based on their expertise and their content deals, we’ll be ready to go. We’ve been on a slower ramp for the last year or so. That ramp got steeper at the beginning of this year.
DEADLINE: Will you just stream in HD or will it also include 4K?
BOWMAN: It will not be 4K at the start but it will be true hi def. Capturing and delivering VOD in high def is sort of like 1930s stuff. We’ve been doing that for a long time. The stuff that’s live is little bit trickier.
DEADLINE: When the Sony service starts up will there be some kind of audience measurement system for it that advertisers will trust?
BOWMAN: There’ll have to be. For our live games, it’s no different than that. When we deliver video we sync into the back end all the advertising data that they all use: this is how many people saw it, here’s the reach, the breadth and depth, the completion rate. We have to do that, otherwise you don’t get paid.
DEADLINE: The U.S. Appeals Court in D.C. just remanded the FCC’s net neutrality rules. Are you concerned that some distributors will demand a payment to make sure that your stuff goes through at the fastest speeds available?
BOWMAN: What I sense so far is both content publishers as well as carriers are taking a very cautious approach to the ruling. There has to be a [return on investment] on infrastructure. Everyone is trying to be very mature about this and take a deep breath and understand what it is. Who knows? Maybe at some point if the relevant groups get together there’ll be no need for government regulation. Wouldn’t that be a nice thing?
DEADLINE: But then you see Charter Communications offering $61B for Time Warner Cable. That’s a lot of money and, if they succeed, they’re going to want to make it back.
BOWMAN: The flipside of that — what conditions might be part of a merger? Almost every merger has conditions from the Justice Department. I’m not an expert. So far, all of us have been pleasantly surprised at the reaction — and by that I mean the non-reaction — so far to what the court did. Certainly the world is a little different today. It may change going forward, and it may not.
DEADLINE: What happens to your operation if broadband providers switch to usage-based pricing?
BOWMAN: What if somebody else said we’re not going to use usage-based pricing?
DEADLINE: Like who? The cable guys pretty much control broadband.
BOWMAN: How? We have telcos now. You’ve got wireless. The only pay TV business that’s growing now is U-Verse and FiOS. They’re owned by AT&T and Verizon. I don’t think you should discount what AT&T and Verizon can do without a landline – what they can do through the air. Who knows what this is going to look like?
DEADLINE: How good is the video that you transmit on wireless broadband at this point? Is there enough spectrum for you to get a decent signal out?
BOWMAN: A lot of our people watch our live games in 4G. Absolutely. It’s better in WiFi. But we built the player that modifies our stream based upon the strength of the signal. If you watch live baseball game in 4G it looks pretty good and 5G is just round the corner.
DEADLINE: Where are you guys on dynamic ad insertion? Comcast has been talking up its ability to offer that on its VOD platform. Can you offer that?
BOWMAN: Yeah that’s pretty simple stuff. I’m just talking about streaming. With VOD you just stop the stream insert an ad and start the stream again. That’s 1930s. Live streaming is very different. Live streaming you can’t turn it off because you don’t know when it comes back. It’s a much more complex process that we are doing that not many people are. It is relatively unique – you can’t turn the stream off of the live stream because you don’t know when they’re going to come out of a commercial break and throw the next pitch. What Comcast is talking about is geolocation which most everyone does now too.
DEADLINE: You’re offering a compelling suite of services with sports and, now, entertainment. Should the cable operators and satellite guys be concerned about cord cutting?
BOWMAN: No I don’t think so. First of all, the pay-TV business is one of the genius inventions of all time. People love it. People just love it because it’s not usage-based — I don’t pay more if I watch 16 channels versus two. I know there are stories out there about this cable company and that cable company. I say horse patootie. People love it. Yeah, there are going to be a few people that cord cut. But it is so de minimus in my mind given the value proposition of what you get from pay TV. Will there be some shifting in between and among all these things? Sure they’ll be some. But the cable companies that I know and the satellite companies that I know — these people are excellent at delivering content and that’s what this game is all about. Except now, rather than being a 7 to 11 PM endeavor, it’s a 24/7 endeavor. For people who create content, what could be better? So I think the water is rising and rising fast and I think that’s going to lift every boat.