"I love that dirty watah...oh BOSTON YOU'RE MY HOME!"

After spending the past four years in Ithaca, there is one thing I have come to appreciate more than ever:  The Boston Red Sox.  To some this may sound silly; however, when put in perspective it makes perfect sense, at least to me and fellow baseball fanatics.  I am a displaced Sox fan who lives and dies with every pitch of the season from the beginning of April until the middle of October.  Although the Sox have many games nationally broadcast, there is a majority of the season I am unable to watch on television because I am in an out of market city.  I am stuck to reading the box score and watching Sports Center every morning to keep up with my boys of summer.

            Although I complain, there is another option aside from counting the days until the Sox are featured on ESPN Sunday night baseball or play the Yankees (I cringe to write that word).  Major League Baseball has created a phenomenal site in general that offers many services for fans to keep up with their favorite teams and players.  I can follow live box scores, listen to the game on the radio, or even watch the game on my computer.  I can get all the latest news and updates though my RSS Feeds and then shop for the coolest gear.  They have created a great site that allows fans of any degree to easily find what they want and meet their needs.

            There are a multitude of services offered; however, I would like to key in on two services offered that are extremely similar, which are the MLB TV and Game Day Audio.  MLB TV is section of the MLB website that allows fans to sign-up for access to stream any game straight to their personal computer.  It also features archived games and highlights.  MLB Game Day Audio is a service offered that allows fans to stream radio broadcasts of their favorite teams straight to their computer.  Although these are both great services offered by the MLB, they do not give them away and charge customers fees.  They have found a way to put a price tag on dedication to a particular team.

            MLB TV uses a fixed pricing strategy to charge customers and earn revenues.  A fixed pricing strategy is one where the producer, MLB in this case, determines a steady price that every customer is charged.  This price is enough to cover expenses plus turning a profit, better known as a markup price, which is a traditional form of pricing for many companies.  MLB TV offers two levels of services, a regular and a premium.  Both can be purchased on a monthly or a yearly basis for $14.95/79.95 or $19.995/109.95 respectively.  Considering there are 162 games in a season, which breaks down to less than a dollar a game.  Not a bad deal for the diehard fan!

            Regular and premium servicing is fairly similar; however, there are marked differences for the two services.  Both give a user access to all 2,430 regular season games plus post season play and is compatible on a Mac or PC.  They offer TV quality picture and archived games as well as condensed games.  The advantage of MLB TV is that they also use a bundling strategy by including Game day Audio with MLB TV.  Premium service offers high quality streams, the ability to digitally record games, multi-game viewing capability, picture in picture and player tracker.  It also has the advantage of allowing a user to select the broadcast they want (home or away) so that they may listen to their favorite or hometown announcers.

            MLB Game Day Audio is a flat fee of $14.95 a year and provides streaming radio broadcasts of all regular season games in either English of Spanish.  They have currently paired with Sports Illustrated to offer a free three month subscription to the magazine as part of a promotional pricing strategy as an incentive for fans to purchase.  This is a great inexpensive alternative to MLB TV.

 

           Promotional pricing and bundling pricing are two strategies heavily used by Major League Baseball to both sell and up sell users to turn a larger profit.  Promotional pricing is what was described with the partnership between Sports Illustrated and MLB where the producer offers s discount or incentive to sign up for services.  Bundling is used by the MLB through the offering of Game Day Audio with the subscription of MLB TV.  MLB TV also offers the option of bundling your MLB TV subscription with either ESPN.COM Insider or the NHL Game center for $129.95 or $139.95 respectively.  For an extra ten or twenty bucks you gain access to content at great discount.  By bundling ESPN.com Insider with MLB TV a user saves ten dollars on the Insider stand alone price.  Users save thirty dollars by signing up for NHL Game Center.

            Judging the effectiveness of these pricing strategies is a bit difficult given the fact that financial measures and user statistics are not readily available as Major League Baseball is a private entity.  According to their website, they have 8.2 million opt-in users, users who choose to access content that is not free.  That number, although it may seem low given the number of fans worldwide and site visitors, is still very high and profitable.  Running MLB TV and Game Day Audio is not an expensive process for the MLB because it uses a person’s home computer and their available bandwidth and hardware to make the streaming possible.  Overhead costs are minimal as there is most likely a small to midsized web development staff with offices that are not independent of league offices.  This all adds up to a high profit margin for the MLB.

            The average user of MLB.com is between 19 and 45 years old, 73% of which are male.  Seventy eight percent of all their users also have an income of over $40,000 a year, which is an important stat.  These stats allow the MLB to set their price ranges and decide which strategies to implement.  Given the service they offer, it is fair to use a fixed price strategy with the bundling and promotional options.  Although the price points may seem high, the per game breakdown is very reasonable, especially for their target market who makes over $40,000 a year.  Overall it is a great product and service offering that has been successful as it has been up and running for many years now and has a loyal following.

Many of my posts have been about alternative vehicles, and yet another article has jumped out at me. This weeks article comes from the Boston Globe: Cab fleet wary of 2015 hybrid law

Boston Mayor Tom Menino recently announced the passing of a bill that will require all licensed taxi cabs in the city to be hybrid vehicles by 2015. The passing of this bill has spurred many lawsuits by city cab companies as they argue that it is unrealistic to expect companies to shell out thousands of dollars for new vehicles as opposed to buying up used police cruisers. They also argue that it is unconstitutional because there are not the same standard for other state fleet vehicles.

Although I agree with the bill that was passed, the cab companies have a legitimate point. They have pointed out a significant double standard. The state government is imposing a regulation that they themselves have no intentions of following. There is a rigid 2015 deadline for private business; however, for the public sector, there is no concrete deadline to switch fleets to hybrids. This state bill only helps to aid what little progress has been made be revamped CAFE standards.