Koo Running Volume Three

  Been way too long but as the month comes to an end, here is a look at what’s going on within the sports digital media space in this edition of Koo Runnings.

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- The freshest news is that ESPN is planning launching a college football network of sites for 25 of the biggest college markets. Basically a competitor to Scout, Rivals, and 24/7. Staffing is underway with a lot of people from old and new media already in the fold. Brooks from SBB seems to think ESPN will come in here and crush all competitors with access to ESPN’s sales-force and cross platform promotion. I’m much more skeptical for several reasons.

My main issue is that sites from Rivals, Scout, and 24/7 are all heavily dependent on active message board communities and premium subscriptions. Most of the page views on these sites occur on the message boards where posters know each other, often organize tailgates and other outings with each other, and enjoy interaction with like minded fans. Some folks who may be on the fringe of these communities may become early adopters of a new site for a fan-base but it’s hard to see droves of posters/subscribers coming over in the short term. Getting those users to jump will take a lot of time and differentiation. College fans will be skeptical so it won’t exactly be like Apple offering an Iphone all of the sudden.

Also against ESPN is the fact it’s a very crowded field and they’re entering the fold very late in the game. Fox’s Scout network still has some very large sites, Yahoo’s Rivals network is in the strongest position, and upstart 24/7 (founded by Rivals former management team) has had a very strong first year. Then you have newspapers, blogs, sports regional channels, tv and radio sites, and now ESPN. Very tough to carve out an audience with a lot of competition already in the market. 

Technology wise, what platform are these sites going to be on? ESPN has not given any technical or design help to their MLB and NBA blog networks so you have to wonder what their plan is here.

Brooks was really bullish on their ability to sell advertising on the sites which makes sense but he’s seems to forget that ESPN had a collection of two dozen college sites in a previous attempt to establish a college network. After 2 years of no technical support, promotion, or ANY advertising revenue, most of these sites bailed to become independent or join up with 24/7. Not sure if we’ll see different results here which is possible as these sites will not be partner sites but owned and operated properties, but at the same time there seems to be a lot of headwinds going against them. Feels like another “well do anything to try to catch up to Yahoo on Comscore” attempt.

- Good friends Joe Pestro and Art Chang of Fanvibe have sold their company to Be Recruited. It was kind of a head scratching move for many as the two companies don’t really have a lot of synergy. Many speculated that the deal was a talent acquisition which seemed to be confirmed as Fanvibe announced they were shutting down the service.  It sounds like some of the technology will be re-purposed for Berecruited though.

Fanvibe incubated at both Dog Patch Labs and Y Combinator. At Dog Patch they were mentored by Ryan Spoon who was the founder of BeRecruited and still holds a board seat. It’s likely he thought the management of his former company (which he sold) was a bit stale and could use a fresh influx of talent. Fanvibe seemed to have hit a wall in terms of monetization and acquiring/retaining new users. Taking the reigns at Berecruited gives them a very large pool of users and a great service to which they can improve technology for. Not a bad fit on both sides.

- Commenting is a critical component to any blog. I recently noticed that SB Nation doesn’t have the same commenting technology (their proprietary solution) on their regional sites as they do on their blogs. Instead they’re using FB comments which is kind of curious. Not sure what the thinking is there and maybe they’ll comment.  I had heard that there were some issues scaling the technology to a certain degree but think it’s probably something else.  Also Fansided has switched their commenting to LiveFyre. Wonder where that good idea came from ;)

- A new Groupon for sports ticketing company has launched called Crowd Seats. A lot of folks have flirted with going into this business so it will be interesting to see how CrowdSeats does going forward with traction and funding being key.

- Sports Fan Live has done really well with their online magazine, The Post Game, in conjunction with Yahoo Sports. Sports Fan Live first raised a modest round of capital in 2008 and I wouldn’t be surprised with all the momentum behind The Post Game, they bring in another round of funding in the not so distant future.

- Director of BD for CBS Interactive, Victor Guss, has a new gig over at Comcast as Director of Content Acquisition. Best of luck to him in his new role.

-  There is a pair of telling interviews with Bleacher Report folks. The first is a SAI interview with CEO, Brian Grey, where he fields some questions about SEO, content quality, and usage of slide-shows. Brian’s a very polished interview so it’s interesting to see how he effectively promotes the B/R while also deflecting some criticism. Overall a very fair interview and props to the SAI guys for getting granular as some coverage of B/R has been very high level and positive while not mentioning some of the criticism and controversy about the company.

The other interesting piece is King Kaufman speaking at Google along with Tim Kawakami and Ethan Sherwood Strauss. Video below and it’s very interesting although a bit long. Kawakami seems confident that the end of print newspapers and old school journalism is very near. Strauss does a good job representing bloggers and the power of passion and quality. Kaufman has some very telling comments about B/R’s recent push to improve content quality. He makes it clear that it wasn’t an internal pivot or change of heart but rather the marketplace (advertisers, investors, and content partners perhaps) dictated the move as the content quality held B/R back in terms of getting to the next level.

I thought that was very interesting as we’ve know for awhile that improving quality was a big focus for them but didn’t have good insight into the motivation behind the move. Needless to say that the quality issues caused some stagnation of the company or slowed the trajectory and they’re now doing the best to erase the stigma and concerns that they ran into in the marketplace.

-  A lot of folks think the general sports blog is dead and that Deadspin, The Big Lead, etc have over saturated the market. With that in mind I want to give some love to The Sports Grid which seems is a nice breath of fresh air in the space. They recently unveiled a snazzy new redesign and hired Timothy Burke aka Bubbaprog and are doing some solid work. 

- Finishing up today’s Koo Runnings are some thoughts on SB Nation. They announced this week that their big technology/gadget site will be called The Verge. Solid name.

9-10 months ago when B/R and SBN raised their rounds of $10.5 million each, I was confident that both companies would grow, burn through some of that capital (a slow burn) and begin to look at exit options. However both companies have had their traffic plateau a bit partially due to seasonality and obviously the lockouts.  

At the same time both companies have ramped up spending quite a bit. Bleacher Report for the most part doesn’t pay their writers so you would believe there is a longer runway there to land the plane. On the other side, I am beginning to think that SBN may have to go back to the venture community another time. Purely conjecture but The Verge is a very pricey investment for them. Rob Neyer and some other acquisitions and hires have also increased their spending.

Advertising and monetization are both doing well but I’d imagine they’re still losing money. With their last round valuing the company somewhere near $80 million, that pegs some lofty exit expectations to the company. If there is no low hanging fruit for an exit and the company is beginning to spend down their capital, what you might end up seeing is a continued push away from sports and going “really big”. Folks at SBN have long talked about the possibility of moving beyond sports but have stayed humble in only attacking sports. The Verge is a break from that and was an interesting opportunity (brings in new advertisers and a proven team with a built in following). With Yahoo and AOL both seeming to have problems on the content and or monetization side, you may see SBN broaden their ambitions and targeted exit range with another round of funding. A lot of that hinges on how The Verge does as it will be the case study to show investors.

A very common analogy for startups is that they’re planes that need to land. They need a runway to land (capital in the bank to keep growing and operating). Just like planes, the bigger they are…. the larger airport and runway you’ll need to land. You have more passengers, cargo, flight staff, etc the larger the plane is. B/R and SBN are both becoming very large and I’m not sure they’ve put the landing gear down. Definitely something to keep an eye on as both companies agressively grow.

That’s it for now. Hopefully I’ll be back sooner than later. Way too much going on. Drop a comment and thanks for stopping by.

Ben Koo

About Ben Koo

Copying and pasting my Twitter bio. I'm also refusing (for now) to write this in the third person. This is me - CEO of @Bloguin, GM at @AwfulAnnouncing, world's greatest chinese jew, proud Buckeye, funny dude, and sports and digital media zealot.

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