Business
1. What is BAM’s business model? What are the key drivers of BAM’s success to date? And what are the key threats?
Answer: BAM’s (Baseball Advanced Media) business model based on the idea of providing digital services to Major Baseball League clubs. Its basic model was based on both B2B and B2C business and generating revenue through ticket sales, paid content and merchandising sales. The most unique feature of BAM’s business model is to generate revenue through online platform. Its website considered as one of the most successful in generating revenue. BAM shares its revenue generated through various digital operations and distribute equally among the teams. Apple Company has selected only sport application for their iPad mobile device which helped it to generate revenue through unique position. Selling multimedia content via website is one of the major sources of the company's revenue. BAM is very much successful in online business model; where other got failed. The key drivers behind the success of BAM are to see the opportunity with futuristic approach. Placing website with better features, tie-up with Apple for its only sports application provider and success of iPhone application plays important role in its success. The key threats in front of BAM were related with branding, features and in deciding the pricing for new iPad application and more dominant position of the Apple and emergence of in market streaming product providers as a potential competitor.
2. Which sets of customers does BAM serve? How does it create value for those customers? And for the baseball industry in general?
Answer: The sets of customers BAM serve included both B2B and B2C; primary to work for MLB (Major League Baseball) teams to provide space in digital media for baseball game through tie-ups with sports channels for telecasting, application development for mobile services provider company like iPhone and iPad. Finally it targets the ardent fans of baseball teams and provide them statistics, stories, news updates and reports about players and teams. It created value for these customers by providing online contents through websites and mobile applications. For baseball industry it created a space in the digital media which is the new age media to spread the word about your cause. Through television and mobile applications it reaches to the target segment in an effective way.
3. BAM is best known for its paid-content model. How solid are the underlying economics? How important are revenues from B2C vs. B2B content?
Answer: Paid content model to generate revenue is the best known model for BAM as it was generating 31% revenue in the total revenue. It is generating revenue from both B2B and B2C model. Revenue generation through content licensing with digital partners and also comes from direct content selling to end users in the form of subscriptions and downloads. Revenue generating from B2C content is the most important part of revenue generation model adopted by BAM than B2B model as more revenue comes from B2C model. 36% comes from ticket selling to viewers and fans, 21% from selling merchandising and some % from 31% in selling contents which account for more than 65% approximate revenue comes from B2C model.
4. How would you evaluate BAM’s product portfolio? How would an iPad product fit into the company’s current offerings? Is the iPad a platform worth devoting resources, and Apple a partner to bet on?
Answer: BAM’s product portfolio includes ticketing, paid content, merchandising and advertising and sponsorships. Emphasizing on the online platform products BAM is going in the right direction but it requires giving more stress on B2C products than relying on other business partners. iPad content services of BAM is one of the major strength in the B2B content product category as it is the only sports content provider but depending on Apple for long term cannot be a solution for the company’s bright future.
5. If you were Bowman, how would you name and price the new iPad app? And what set of features would you include?
Answer: If I was Bowman I would name it “Base app” which has taken from the Base from Baseball for the new iPad app. Pricing would be varied based on the features options provided on a-la carte mode. It starts from basic app from $1 to premium app at $15.99.
6. Why are we studying a case on Major League Baseball? How, if at all, are sports analogous to music? And what parallels can you draw and what lessons can you learn that can be applied to digital commerce in the music industry?
Answer: We are studying the case of Major League Baseball to understand the problem faced by its subsidiary company BAM in selling digital app for iPad device of Apple. This case is also a classic example of changing business environment from offline business to online business platform. In the same way music industry is also converting from cassettes and compact disc to digital products. The lesson learnt from this case is how music companies can change their present business model of providing offline product to online digital products through iPhone and iPad devices and also provide songs to its customers online as pay to listen basis.
