The Impact of mobile on traditional media with Tom Hearne, CFO Score Media

This is part of an on-going year-long special series examining the impact that mobile is having on certain sectors of the economy. These sessions bring industry experts to UNTETHER.tv to offer their thoughts on how mobile will be shaping their industries

In this session, Tom Hearne, CFO of Score Media, discusses the impact that mobile is having on the traditional media industry.

Some highlights of this session:
– Hear how Score Media embraced mobile and quickly surpassed their television audience
– Find out how Score Media’s brand has been impacted as a result of mobile
– Understand the challenges traditional media faces as a result of mobile
– Listen as Tom explains why the future of media requires the development of community and how Score Media is doing just that.
– Find out when Tom feels revenue from mobile will out-earn traditional broadcast media

Enjoy!

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[audio:http://blip.tv/file/get/Untether-TheScore770.mp3]

Raw Transcript

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Hello everybody. Welcome to Untether.tv. This is a special series that we’re doing here at Untether.tv to understand mobile’s impact on certain industry segments. The first one that we’re looking at is the traditional media segment. I’ve got a special guest here. His name is Tom Hearne. He’s the CFO of The Score Media which is a sports-related television channel but it’s so much more than that. We’re here really to talk about the impact that mobile is having on traditional media like television as well as for the casual and fanatical sports fan. Tom, thanks for coming and doing this. I really appreciate you doing it.

Tom Hearne: Oh, thank you. My pleasure.

Rob Woodbridge: Let’s talk very quickly about what The Score is. Massive audience for your mobile applications but maybe people don’t understand what The Score is. Certainly most of my audience is from outside of Canada.

Tom: The Score is a sports specialty channel in Canada. There are specialty cable channels that are allowed to focus on specific genres. We’re a sports news and information genre station. Fifteen percent of our broadcasting is live events. We’ll cover some NCAA football and basketball. We’ve got Serie A soccer. Our main goal as a station is to provide you with sports news and information and the conversation around the game in a raw, authentic, and interesting fashion and in a way you’re probably not going to have that conversation at other sports channels.

Rob Woodbridge: Certainly when you engage with The Score, you’re not engaging with live broadcast, but what you’re engaging with is a live audience ultimately.

Tom: Absolutely. For us, web and mobile seemed a very natural extension of how to continue to expand that conversation with the sports fan, how to continue to give them more information where they want to get it and with the evolution of social media technology, engage their viewpoint and perspective on the game or the event or the players in a way that you weren’t able to in a traditional TV fashion.

Rob Woodbridge: How important was the decision for you guys? The decision to go into the mobile and social space. . . Obviously web, social, mobile because that seems to be the evolution that’s happened so quickly. What were the decision making points along the way in order to be able to make those decisions to go into web, social, mobile?

Tom: Fifteen years ago when we started this station, we were a sports data station. We didn’t even have a license from the CRTC yet. We just put up on the channel lives scores and information.

Rob Woodbridge: Like the Weather Channel for sports?

Tom: Kind of, yeah. Exactly. We evolved into being able to do highlights and some live events et cetera when certain opportunities came up that allowed stations to evolve. Then about four years ago, we made a deal with Rogers, the carrier on the wireless side, to be able to create a little application that said, “Okay, if I’m a BlackBerry user and I want to get some sports news and information, let me give you a little application that only costs you a couple bucks a month and you can have all the sports news and information that we can feed to you.”

Rob Woodbridge: This was really advanced obviously.

Tom: This was pre-smartphone as we know smartphone today. Once the iPhone came out, it really changed the game. It really created an application-rich environment that allowed you to custom build an application that would bring you all the sports news and information that you wanted. In the Canadian market, we can still provide some highlight capability. We provide you with a ton of short-form content, all of our own talent in different sports areas, we give you little video highlights, maybe your picks of the day as to what the betting lines of the games are and who you should be betting on, et cetera. It gave the opportunity for the sports fan who couldn’t be in front of the TV set, which is a lot of us a lot of the time, the ability to get all of the sports news and information that they could handle and keep them up to date as to what was going on in the game.

Rob Woodbridge: I don’t know a lot of applications that were built back in the day when certainly a lot of companies like RIM weren’t really focused on the application. I’ve talked to many entrepreneurs and the iPhone was really that “ah ha” moment.

Tom: Exactly.

Rob Woodbridge: Everything lit up from that point forward. It was still risky back then, even in the BlackBerry days, to build an application that charged a subscription fee, that fed content to the avid sports fan. That was picked up by how many people? What was the feedback like? It was obviously enough to push into the iPhone.

Tom: Absolutely. It was picked up by a few thousand people which I think was the number one little app that they had on that device at the time.

Rob Woodbridge: I’m sure of it.

Tom: Because the smartphone hadn’t evolved, the business model really hadn’t evolved for it. It wasn’t a huge expense for us to make a forward into that market and experiment with it from a relative perspective. We were able to get started into it. We did have a view that over time, your mobile device was going to provide you with more and more technology. You could see the evolution of technology. You could see how wireless capability was expanding. You could see over time more and more things you could do with a wireless device. When the iPhone came out, while it was a real game changer. It was that evolution that people, I think, were somewhat looking for.

We decided that it was very important for us to be out there early in that market space to try to see if we could establish a bit of a beachhead and see how interesting this could be. We were very pleasantly surprised at how quickly we were able to get takeup, how many people loved the experience and wanted all of that information. We tried lots of different things in lots of different ways of presenting that information to people until we found the right mix. The live blogging of games, the short-form video content, the odds, highlight capability where we could. We’ve listened to our customers well. The iPhone really allowed us to continue to expand the growth of that. As we heard of BlackBerry coming down the pipe and Android coming down the pipe, Windows Mobile 7, et cetera, we made sure that we wanted to be early out in the market. This is our next big media push. There will not be Score 2, Score 3, and Score 4. There will be ScoreMobile, ScoreMobile FC, and maybe four, five, or six other ScoreMobile applications that put us in very specific sports genres where we can engage an audience and grab a conversation. ScoreMobile was really a North American phenomenon. North American sports are really, for the most part, contained in North America. There are not a lot of NHL Hockey fans in Italy.

Rob Woodbridge: They’re trying.

Tom: Pardon me?

Rob Woodbridge: They’re trying.

Tom: They’re trying but if you ever go to Europe and trying to find a sports score before you had ScoreMobile. . . You certainly didn’t see any in the newspaper. It was really a North American phenomenon. When we built ScoreMobile FC, it was really all about, “Okay, how do I get a foray into the European market? There are tons of BlackBerry users there, tons of smartphone users there, what can I deliver them that’s interesting to them?” Clearly Major League Baseball is not interesting to a Brit.

Rob Woodbridge: What? Come on!

Tom: But soccer is a passion. Every country, every region has a sport that they’re as passionate about as we are passionate about our hockey. In Europe, they’re passionate about their soccer. We built an all soccer application called ScoreMobile FC. They’re passionate about cricket and rugby and other sports in other places of the world. We may start to build applications that focus on that market space as smartphones evolve in China and India et cetera. We’ll go to where our market is. We’ll go to where our customers are. We’ll develop something specific for them.

Rob Woodbridge: Let me ask you this. One of the cool things about mobile. . . The whole industry is amazing because it’s in this ever-evolving, ever-innovating state right now. Do you think there’s a point in time where the television channel doesn’t matter as much as the audience you’re creating from the applications on these multiple devices?

Tom: We love the TV station today. Obviously it’s our big business and it does great, but absolutely. We engage more people today. We engage two million people a month on our mobile device. We engage more audience today in mobile and web than we do on TV.

Rob Woodbridge: That’s insane.

Tom: That will continue to expand. We can engage them now outside of Canada. Sixty percent of those two million people, or over a million of them, come from the United States. A few hundred thousand of them come from Europe. I can engage an audience now all over the world. Ultimately, we think it’ll probably be a bigger business than our TV business. We can see the business model evolve where in a couple of years, I’m not talking 10 or 20 years, our web and mobile business is engaging more people, creating more revenue, and is just a bigger business than the television business.

Rob Woodbridge: It’s funny because just continuing down this train of thought, in order to set up a television show, there’s a massive amount of expense, for like a television channel. For specialty channels, you’ve got to get CRTC approval or whatever the governing body is, you’ve got to be able to afford to be able broadcast, you’ve got infrastructure obviously, you’ve got cameras, talent. It’s a big business. It’s a big initiative. There’s a traditional means to fund that which is advertising, sponsorship.

Tom: And cable subscription, absolutely.

Rob Woodbridge: And cable subscription, right. Your portion of that. If you’ve got a whole bunch of citizen journals kicking you back and contributing to conversation and you’ve built up that conversation, mobile’s, in relative terms, inexpensive to be powerful.

Tom: Absolutely.

Rob Woodbridge: Do you think this changes the way that television is viewed in general by the sports fan? What do you think that that’s going to have an impact. . . In a couple years, if your audience is far greater, and we’ll talk about revenue a little later, on the mobile side just from the apps and your interaction’s on the mobile side, what do you think that does for the traditional channels?

Tom: For us right now, and I think for the foreseeable future, they’re very complementary. It’s nice to be able to have a multi-platform capability so we can deliver to you pretty much wherever you want to be. If you want to use your tablet, if you want to be on the web, if you want to be on mobile, or you want to find your TV set, we can have that conversation with you. Generally I think you’ll find sports fans will go to their device of highest fidelity. If I have a choice between watching an NFL football game on a mobile device or on my 58-inch flat screen at home in my basement or at a bar, I’m probably going to go watch it on the 58-inch flat screen. I’m probably then going to use my mobile device to have a conversation with my friends about the game.

I think one of the advantages we have at The Score is we have that infrastructure that you talked about. We spent over $15 million building our high-definition studio. We have dozens of talent on contract that produce very interesting, short-form, unique content for us. We have producers, editors, writers. We have the statistics agreements which are very expensive that cost hundreds of thousands of dollars that give us all of that real-time data. In the mobile space, there are certain advantages that come with the complementary nature of having a TV station. While Bob in his basement can build a really cool blog, we’ve hired a couple really cool bloggers in here like the Basketball Jones type guys who were bloggers in their condo in the morning and we decided to bring them in-house as a full-time content engine. They wouldn’t be able to take us over from the sense of they don’t have the stats agreements, they don’t have big cameras, they don’t have high fidelity. All of those things, I think ultimately, the sports fan still craves.

Also what we can then mix in with that is all of the social media aspects. We have over probably 150,000 followers on Twitter now, tens of thousands of people engaging us on Facebook, all of those type of things, and hundreds of thousands on the web where we can engage people and say, “Let’s have a great conversation, a raw, authentic sports conversation, about your favorite team, your favorite sport, your favorite game.”

Rob Woodbridge: I don’t see the television is going to disappear. I think people have been trying to figure out how to make it disappear from a subscription, from a consumer side. I subscribe to MLB.com. I’m a huge baseball fan as many people who watch this or listen to this know. I find myself shopping in a grocery store pulling up live Yankees games on my iPhone. You’re right. As soon as I get home, I’m not going to sit and watch it on my iPhone anymore. I’m going to go pull it up on my big HD television set. It’s great for transient folks, right?

Tom: Absolutely.

Rob Woodbridge: This is what I do. I’ll watch the game on my television set which is connected to my computer in HD. Then I’ll get in my car and I’ll throw it on my iPhone, I’ll get the audio playing through my car. Then I’ll get to the grocery store and as I’m waiting in line, I’ll pull the live game up on my phone and I’ll do the reverse until I get back home. That’s having a massive impact on the television channel because I’m not even interacting with something like ESPN or TSN or anybody. I’m just interacting with MLB directly. Obviously that’s going to have an impact from the media’s perspective and mobile is doing that.

Tom: It’s a huge challenge right now in the traditional media space, a little less so in sports than it is in non-live event type traditional media. That transition is difficult. As a broadcaster, I can’t engage you and get the same revenue capability out of you from an advertising paradigm perspective on that mobile device as I can on a TV station. The big challenge in the evolution that’s taking place right now is how do I evolve business models for web and mobile? I heard a saying Nexmedia a month ago where I’m converting dollars of advertising revenue on TV so dimes on web, to pennies on mobile. It’s not quite that severe but if I were a broadcaster of one hour sitcom or drama on TV, I’d be very, very worried about that. As a broadcaster who now can reach out to over a million people outside of Canada and engage them in a conversation like they never could before, the upsides will outweigh the downsides. People still love their TV set and they will for quite a while. We’ll come and engage you on the TV set soon through IPTV which is our next big gadget which says, “Great. You want to watch that live game? Let me bring you. . .” The kids are dominating the TV because they want to watch cartoons, it’s okay, dad. I’ll put a live score ticker on the bottom of any channel you want to watch.

Rob Woodbridge: Just so you know, it’s not okay. It’s not okay to do that to your parents.

Tom: That’ll be the negotiation that takes place. “Okay, kids, you can watch a half hour of. . .” I’m not going to brand anybody else in there, but, “You can watch a half hour of cartoons but daddy needs to have the ticker on the bottom that lets me know what’s going on in the games. If a little red zone highlight comes up, on commercial break of that cartoon, we’re going to flip over and catch the highlight or I’m going to click on my IPTV widget and get the highlight of what’s going on in the game.” For us, mobile and web have become a very complementary tool to what’s going on on the television station. We still have a great mix of event-driven conversation, events on TV, analysis around the event on TV that we’re also able to engage that audience even further now on web and mobile.

Rob Woodbridge: Certainly your audience has expanded. You’ve got, say, two million users monthly that use the products on the mobile side. Are you allowed to re-purpose content, your own creative content and push it out through these mediums so essentially you’re creating mobile channels of your content?

Tom: Absolutely, as long as it’s not rights fee driven. I can’t take an MLB highlight that I paid for the Canadian highlight rights for and sell those highlights in the United States. Trust me, the first time I do it, I’ll have a little phone call from MLB saying [??] rights. We geo block everything even where we can do that. Most of what we find engages our audience are things like the Basketball Jones where they’re having a conversation about all the basketball games, Puck Daddy, all of those types of people that we engage that create tons of content for us, create a lot of that conversation for us, the Footy Show, Tim and Sid: Uncut. We can send that out anywhere all over the world. They’re starting to build a brand and an audience outside the Canadian borders. They’re building up that audience entirely via our web and mobile distribution capability.

Rob Woodbridge: That to me is incredible. You got a high production quality content because that’s what you guys do, a big studio, you’ve got on-air talent that’s creating a brand locally in Toronto and across Canada. What they’re able to do very quickly is, almost with a flick of a switch quite literally, create global brands out of those television shows ultimately and distribution can be incredible as a result of that.

Tom: Absolutely. That’s the amazing thing about the mobile and tablet device. I think we’ll really see the expansion of The Score brand where that yellow and blue S logo will mean something to the people in the United States and United Kingdom.

Rob Woodbridge: It won’t mean a television channel.

Tom: No. They probably won’t even know there’s a TV station in King and Peter that is The Score. They’ll be like, “Really? They have a TV station too?” Ultimately we joke that 10, 20, 5 years down the road, some big international conglomerate will come and have a conversation with us and they’ll go, “Really? You have a TV station too? We didn’t know that. We thought you were just a web and mobile company.”

Rob Woodbridge: The surprise of how you can create such great quality content and push it out there in a mobile device. Time shifting is an interesting concept around television because I think it’s the first foray into convenience around the person watching it. We talked about this before about sports not being time shiftable. It’s not relevant at the end of the game anymore ultimately.

Tom: I’ll still want to know what the score is. I’ll know the Leafs lost to Calgary last night, I caught little bits of it during the game. I’m not going to go watch the broadcast of the Leafs game, the Sens game, or the Canadiens game after. Once I know the score, I’m pretty much done with it. We’ll probably have a conversation around the game as to is the road trip going well? Is the team playing better? Are the Sens starting to improve? Is Kovalev starting to get along with his teammates again? That fun kind of stuff. That’s the conversation that sports fans want to have the next morning.

Rob Woodbridge: It’s all contextualized. There’s a point in time during the three periods in a hockey game, the four quarters in a football game, the nine innings in a baseball game while you’re embedded in there, it’s one conversation. It can be a continuous stream but it’s context to the game. The moment the buzzer goes off, the bell rings, the bottom of the ninth is finished, the game’s are over, the conversation immediately switches. You get caught up very quickly through mobile and then the conversation goes into, “What happened? Why? What? This, this, and that.”

Tom: As you say, it switches. It doesn’t end.

Rob Woodbridge: No. That’s the key point.

Tom: The conversation carries on 24 hours a day practically. That’s the very interesting part about the whole social media aspect of what we do. For us, we embraced all the social media aspects because we were always about the conversation around the game. I wasn’t about just giving you a game with the big sports anchor desk and let me tell you what you should know about the hockey game and here’s the broadcast and then I’m gone. It was always about let’s have a conversation all day long about the game that’s coming up tonight, the playoff races, and this and that, who’s playing well. Then when the games are over, let’s have another conversation. In game, let’s have a conversation. The Score has always been about, from the initial instant we launched mobile applications and web, how do we create more than a one-way conversation with our audience? How do we engage them? How do we allow them to converse back to us? Ultimately, how do we allow this community of people to have a chat with each other? I just don’t want them to talk to me either, I want them to talk to each other. I want them through BlackBerry BBM integrated into our new super app that’s coming out in the spring. Product plug there.

Rob Woodbridge: Nice.

Tom: Be able to have a conversation with each other. There are 20 guys in a fantasy pool league together and they’re all having chats during the game. “Did you see the Raiders lose to Jacksonville on the weekend? I picked the Raiders. I’m out of the pool now.” All that type of stuff. They’re going to have that trash talk. They’re going to have that conversation. If you’re a Sens fan and I’m a Leafs fan, we’re natural adversaries.

Rob Woodbridge: We’re putting that aside right now.

Tom: There will definitely be lots of trash talking during a game like that.

Rob Woodbridge: Yes, there always is. Unfortunately both teams suck so it doesn’t matter.

Tom: Right now, yeah. It’s not the glorious playoff performances we used to see.

Rob Woodbridge: It’s like which team sucks less? You brought up a really interesting point here. Actually two points that I wanted to key in on. I’ve always felt an emptiness, not just in sports but when a television show ends. I’m watching it, I’m stationary, it’s lay back mode. The TV show ends, it’s like it’s over. I’m full of questions. I’m a LOST fan.

Tom: I love LOST.

Rob Woodbridge: Early on in the first seasons, there was none of this social interaction. There was none of this mobile capability. It was like, “What the hell?”

Tom: That’s how they finished basically every episode. You want to have a conversation with somebody. “Did you just see that?”

Rob Woodbridge: It always left me empty. I got over it pretty quickly but it always left me empty. Same thing with sports. At the end of a game, sometimes it’s anti-climactic, sometimes you just dismiss it, but the game’s over. It’s so quick. The three stars are up and then it’s done. Do you think that traditional TV stations that are broadcast focused like Outbound, pushing, pushing, are just missing this massive opportunity of conversation?

Tom: Absolutely. If all you’re focused on is, “Let me push one way the live event to you,” you’re missing out on a fantastic opportunity with your audience to have a great conversation. I’m a huge MMA fan. Last night at the end of the title fight, the guy jumps up, puts one foot on the fence almost like in the Matrix, and then kicks the other guy in the head. It’s like straight out of the movies. That conversation took on for like an hour because nobody had ever seen that before. You’re right. It’d be at the end of it, finished, and you’re like, “Okay, that was really cool but I can’t talk to anybody about it.” It’s like, “No. I want to talk to people about it. Did you see that? That was unbelievable.” You want to have that conversation. I think if you just broadcast one way, you’re really missing that opportunity because you got these millions of people watching who want to talk about what they just saw. That’s why talk radio does so well.

Rob Woodbridge: That was the second point. What you’re doing with the combination of television, extending it into mobile. . . You’re taking talk radio. Talk radio is one direction. It’s ultimately angry guy or happy guy talking to a Rob Woodbridge. You’re doing that in a way but what you’re also trying to facilitate is angry guy talking to angry guy, not to the Rob Woodbridge.

Tom: Exactly.

Rob Woodbridge: That’s a different paradigm shift that could impact what’s going on in the radio stations today as well.

Tom: We’ve done that to some extent with the live blogging of the games where we have those in-game conversations. I follow a ton of our live blogs in different sports. You see people from all over the world having a conversation about. . . In golf, a lot of them will be talking about Tiger Woods or Phil Mickelson. Tiger’s never coming back. He’s totally useless now. Or in event, somebody will miss a critical putt and one guy says, “That was a tough break,” and the other guy says, “No, he’s just a choke artist anyway.” All of that conversation takes place and everybody wants to be a part of that. For mobile, there are lots of opportunities through the social media aspects of it, through the BBM capability of it to create that conversation. You create a far more valuable, interesting audience if you allow them to engage with each other as well as with you.

Rob Woodbridge: It also creates this endearing brand in their eyes about what app to go to, what station to watch, right?

Tom: The Score is my home to have a sports conversation. Absolutely. That’s what we’re trying to create.

Rob Woodbridge: I think if you go in with that mentality. . . I’ve seen this on some of the bigger television stations where they say, “Send us a note by Twitter. Thank you very much,” and the credits roll. That’s not engagement the way you’re talking about engagement.

Tom: No. For us, mobile and web really just allow us to extend the core philosophy we’ve always had which is as a passionate and enthusiastic sports fan, your opinion on players and games is as relevant and valuable as our opinion. We don’t know more about the game than you do. If you’ve been a passionate Leafs fan or passionate football fan for 20 years, you know as much about the game and you’re as passionate about the game as we are. We want you to be heard as well. Let’s have that conversation. We have amazing personalities here. Their depth of sports knowledge, I’ll tell you, is just unbelievable. When you come into an environment like this and you realize how much about sports these guys know, you feel like a real meal fight [?]. It’s amazing how much information and interesting content your fans bring to you as well in that conversation. We’ve always been about your opinion is just as valuable as ours. We don’t want to talk down to you like we’re the panel of experts, we’ll tell you what you should think about MMA or wrestling or football. Let’s have a chat. We know you know as much about the Green Bay Packers or the Toronto Argonauts as we do.

Rob Woodbridge: What’s amazing about this and I’ll put this on mobile. When I talk about mobile, we’re talking about any device like an iPhone or iPad or tablet. What mobile has allowed us to do with this broadcasting medium is. . . I think there’s been stations and TV shows that have been craving this feedback from customers. I think American Idol, good or bad, was one of the first real influencers when it came to this. Have you say, have your voice, vote, vote, vote. It made them a lot of money. There’s no other better suited medium or genre than sports to bring out that rabid fanatic in all of us and start that conversation. There’s really never been a really good medium to do it. You can say this and we want your involvement and we want your feedback. As the old stations used to do, “Send us a letter to this address.”

Tom: Exactly.

Rob Woodbridge: Now what you’ve got, if you can engage like you guys have, a rabid, enthusiastic fanbase that you’ve tapped into. Mobile’s allowed that. Is that too big a statement?

Tom: No, not at all. What we also allow and where we think we can differentiate and compete is we allow you to have that conversation the way you really want to have that conversation. It’s not a filtered, distilled conversation with very nice and clean comments. It is raw, authentic conversation. If I hate a particular player or I hate a particular call, you’re going to hear about it just like if we were sitting together in a bar having that conversation, like, “I can’t believe what the bleep just happened there on that call.” That’s what we’ve always been about. We will have that open conversation about when Houston tied that game up at the end of the game, all the Baltimore fans who bet Baltimore were like, “There’s no way now we’ll cover the spread because most games end in a field goal in overtime. We’re a four point favorite.” When they got the pick six, they were like, “Oh, wow, we covered our spread. We just made money on this again. Life is fantastic.” A lot of people aren’t going to engage you in that conversation the way we will.

Rob Woodbridge: A final note on this side of it, what you’re ultimately doing is archiving an experience. You’ve got pre-, during, and postgame comments, emotions, and thoughts that encapsulate that game. It just adds much more context ever to any sports event.

Tom: You feel like you’re a part of the game. You feel like you’re a part of the experience. For sports fans in particular, that’s incredibly important. We all want to feel part of that experience. We all have our passion. As The Score grows, a big part of that is how do we engage those passionate fans all around the world? A guy in Africa is not going to be passionate about the Toronto Maple Leafs/Calgary game last night but he’s going to be passionate about rugby or cricket. Maybe our next app is how do I engage that guy on that conversation? Even though we don’t know as much about that sport individually, I guarantee you his passion is just as deep as our passion for the Senators, the Leafs, the Yankees, or the Blue Jays.

Rob Woodbridge: I totally agree. It’s tapping into those guys. I think the biggest question is, you said it so well, dollars to dimes to pennies which is a big challenge. Right now, it is pennies in mobile. I think there’s a transition that happens but how? People become more reliant on mobile every day. It’s a personal experience. That’s the first thing I go to when I want to find a score. I don’t turn on the television anymore because it takes too long. You’re somewhat sacrificing the dollar audience in advertising dollars and generating a massive audience that pick up their iPhones, BlackBerries, or Android devices or iPads or tablets to find out the scores. How do you start generating the revenue that you need to in order to be able to sustain?

Tom: Part of it in mobile is just that expanded breadth. I’m not getting as much per second of engagement as I am on the TV set necessarily. By the way, TV is nowhere near dead. TV is a very strong, powerful medium. People will always go to their highest point of fidelity. They’ll use the TV and their mobile and they’ll use the TV and their tablet together. I will definitely get less per second of engagement from a mobile perspective but I will get a much broader audience. For us, especially at The Score, as a CRTC-regulated television station, I have a reach of 10 million households. I’m in seven million of them right now. That’s about as good as it’s going to get. I’m not going to be in 30 million households next week because there aren’t that many households in Canada. Whereas I can be in front of two million people which will hopefully soon be three million, then five million, then 10 million people around the world that I can engage with and have a conversation with and create value to advertisers from the sense that there’s a community that’s all focused and passionate about very particular things. As an advertiser, I can start to send them very directed advertising.

One of the interesting features we put on mobile is a thing we did with Budweiser called Bud Bar Finder. I list up every game and what channel it’s on. It doesn’t matter whether it’s on The Score or not. Based on where you’re standing, it will direct you to the nearest bar that’s generally pouring Bud on tap obviously so you can go and watch the game. What mobile gives you the opportunity to do that TV doesn’t, that even web doesn’t, is it brings you a customer that’s that much closer to the buying decision. If I’m looking for something on mobile, it’s like the old Yellow Pages thing. If I open up the Yellow Pages to look for something, nine times out of 10 I’m going to buy. You’re getting like that on mobile too. More and more you’re seeing the advertiser recognize the value of that. We’ve seen mobile rates increase from an advertising perspective. We’ve seen the percentage of our mobile ads that we sell out on a monthly basis continuously increase.

Even in the last six months, we’ve seen quite a significant shift where advertisers now are saying, “I absolutely have to get some dollars into the mobile market,” because you’re engaging an audience in Canada for there being a Canadian only advertisement of 600,000 to 800,000 people a month, that’s a pretty good sized audience. I’d like to have a conversation with that audience. If I know they’re passionate about sports, then I can direct something very specific to them as opposed to a generic ad on a conventional TV station which may or may not have any resonance with them.

Rob Woodbridge: That’s so true. You’ve basically segmented a market. People on their mobiles, it’s a personalized experience. You’ve segmented them to the point where you know whether or not they’re sports fans. Not only that, you can bring it down even further as they filter through the site. Eventually you’ll know that I’m a Yankees fan because I pull up the Yankees score, right?

Tom: Exactly. There’s a lot of that type of opportunity. The GPS capability on the phone. Mobile has not yet done a great job, like web, of tracking the user, where they are, what they do, the other engagements. That’s just a technology that will continue to evolve. Soon your mobile device will probably tell more about you than you want people to know. From an advertiser perspective, that’s important data. He’s a big sports fan. He’s a big Leafs fan. He’s a big Raiders fan. Therefore, I want to direct advertising to him that’s around those specific things because that’s my best chance for engagement with him.

Rob Woodbridge: It’s funny because I think certainly television shows, television stations have become the most innovative group for integrating advertising where they can. I thought that arenas were like that. On the ice now, you’ve got advertising. You use non-traditional ways like your Bud example. Traditional advertising is not going to work on a mobile device. Banner ads don’t work. All this stuff doesn’t work. Integrating the brand into the app for a feature certainly is a very effective way to generate revenue.

Tom: Integrated advertising I think will be very powerful on mobile. Certain types of banner advertising have worked very well. We found that, for instance, movie trailers have worked incredibly well in mobile. The next level we’ll be able to create the links directly to the purchase of tickets. If there’s a new movie trailer out and people see a banner ad on it, they click on it, they go to the YouTube trailer. People are very interested in that type of stuff. There’s a lot of contesting or information type things they can do. I think more and more you’ll start to see location-based advertising. It knows where I am so if I’m trying to advertise Tim’s or Starbucks or Canadian Tire or Home Depot, whatever you want, to that person, it’s like, “Hey, you should be getting this. You probably crave a cup of coffee. Click here and I’ll tell you where the five closest coffee shops are where you can go and get one. Here’s a coupon for 10 cents off.” Something like that. It’s all about, and advertisers have always wanted this, how can I get to that customer in his decision making time so that I can be part of that decision? That’s why I think mobile from an advertising perspective will offer a very power medium that’s not available on other devices.

Rob Woodbridge: I don’t know if you can answer this because I don’t think anybody really knows. Do you foresee a point where the revenue from mobile just overshadows the revenue from the television station?

Tom: Absolutely. John Levy, our CEO, and I will debate the time frame of that constantly.

Rob Woodbridge: But you both agree.

Tom: We both agree. I say three to five years. John will tell you it’s on the short end of that. I’ll tell you it’s in the midterm of that. Maybe on the short term of that. It all depends on what our next couple of forays into the mobile space are. I can easily see that we will generate more advertising revenue from web, mobile, tablet, digital media than we do from TV. That’s not because TV is declining. We actually think TV will continue to grow at a nice little pace here because we seem to have found the right niche of how to deliver to our customer. We think that mobile will offer tons of opportunity with the big audience engagement now to be able to generate tons of revenue.

Rob Woodbridge: I think that’s the power statement right there. I don’t think that television is going to disappear. I just think that the television and the way we interact with television is going to change dramatically over the coming months.

Tom: It already has and it will continue to. Absolutely.

Rob Woodbridge: Thinking about that, people ask me all the time, “What do the next two years look like in mobile?” I say, “Who in their right mind would open up their mouth and tell you what the next two years look like?” Nobody knows. Nobody a year ago could tell you what was going on today. Everybody who predicted in late ’09 about the mobile space in 2010 is dead wrong. Tablets changed everything. Adoption has changed dramatically. If you look short term, we talked about the integration with BBM which is a real-time chat mechanism through BlackBerry which I think is great. Do you mind sharing a little bit about what your thoughts are about where you’re going to go? Then we’ll finish up.

Tom: Sure. We talked about this a lot during the conversation and off camera, we will create more and more ways for our audience to communicate with each other. I think for mobile that social media aspect. . .

Rob Woodbridge: Hold that thought for one second, Tom. I’m so sorry to interrupt you. Say that again. You’re going to create products that facilitate the conversation between fans.

Tom: Exactly.

Rob Woodbridge: That is so different from broadcast stations or broadcast mentality of we’re going to build something for you to consume. What you’re talking about is facilitating.

Tom: To a large extent, sports news and information is a commodity. Score is not your only source for the score of the game. How do I create a need for you to come to The Score? I give you a place to be heard. As sports fans, we all want to be heard. Every day here, we have that conversation about how do we create the environment to create the conversation among our fans? We think that’s a critical piece. The technology continues to evolve to allow us to do that. BBM integration within the app, so while I’m in The Score app I can BBM my friends. That’s a big part of it. As we get that on other platforms, that will be very important. The tablet experience, there’s a big social media aspect to that. It also becomes a really cool in-game companion. Nobody just sits in front of the TV set anymore. If I watch my kids consume content, it’s bizarre. They’re chatting with 427 people on Facebook at the same time, they’re watching movie trailers, they got something on the TV set, probably on a cell phone. I don’t even know how they cope sometimes. They have a huge ability to multitask.

The tablet I think will offer you an amazing in-game companion experience. I love my 58-inch flat screen hi-def TV and sitting in front of it watching the game. That tablet will give me all of my scores, all of my stats. If Darren McFadden has run 20 times for 112 yards, I will know all of that instantly. I will know the score of every game. I will know exactly where I am in my pool for the weekend. I’ll be chatting with all of my friends either through ScoreMobile, The Score app, Twitter, or Facebook about the game, saying, “Did you notice that? Hey, I’m catching up to you in the pool. I got two games on you this week. I’m only one behind you for the season.” You’ll be having all those conversations. If I know one of my guys is a big Dolphins fan and I’m a Raiders fan and we’re playing against each other, we got bets on the game and we’re trash talking all game long. That’s what The Score tablets, mobile devices, all of that stuff we create will be a part of.

The other big foray, I think, for The Score when you look at leading edge technology is we believe the Internet TV will also become quite big over the next five years. I think it’ll be bigger and more important than 3D TV for sports. I think 3D is a neat thing but traditional sports hasn’t really broadcast itself in a 3D-friendly way. There’s still tons to work out in that environment. IPTV is a very cool environment. It’s an opportunity to then say, “Okay, when I’ve got you in front of that TV set, I don’t care what channel you’re watching. Let’s put the score ticker up. Let’s give you all your sports news and information. Let’s let you click on things if you want to watch The Score on the NFL and the guys’ gold, silver, and bronze picks before your NFL experience. Click on that. If you want to watch the Basketball Jones guys chat a little bit about the game coming up tonight, let’s do that.” The Score on IPTV will offer you all of that. As standards of all of them, we figure out who the real IPTV players are. You’ll see us as one of the first guys out on that environment.

Rob Woodbridge: I wouldn’t even ask you to predict beyond that. I think something will disrupt and will be embedding retina viewing into our iPods.

Tom: The nice thing about it, being a smaller shop, having all of the decision makers in a very close perspective, we have that flexibility. If we decide that Windows Mobile 7’s coming out, should that be our fourth application platform for ScoreMobile? That’s a conversation where you drag a bunch of guys into a room, there are no big conferences, no memos to the CEO. It’s like, “Hey, John, are we going to do this or not? Here’s the cost. We can get it built in two months. We’ll be out and ready in the market quicker and faster than everybody else. We will go and establish a beachhead of market share there early. Once they get that experience with us, we tend to be able to keep them.”

Rob Woodbridge: That’s beautiful. I love it. Listen, Tom, I appreciate the insights you’ve given. We’re really talking about the impact mobile is having on the sports fan and on the way that sports are being broadcast today which is one way. Hopefully people find inspiration and ideas from what you guys are doing at The Score to interact more, to bring this from the television set onto your hip ultimately, and to have much more engagement from a community that’s far beyond what the station actually reaches geographically, having people around the world tune into The Score through their applications and through their mobile devices. It’s something that’s a unique time in history. I really appreciate you for giving us this insight. Thank you. Thanks, man. I really appreciate it.

Tom: No problem. My pleasure. Any time.

Rob Woodbridge: You guys in the audience, thank you for listening to this. Thank you for watching this. Hope to see you soon. Thanks, Tom.

Tom: No problem. Cheers.

About Tom Hearne
Tom Hearne

Thomas Hearne, Chief Financial Officer, brings more than 20 years of financial management and advisory experience to Score Media.

Prior to joining the company, Mr. Hearne was Chief Financial Officer at Redline Communications Inc. where he successfully led the company to its initial public offering on both The AIM Market and The Toronto Stock Exchange. Mr. Hearne was also Chief Financial Officer for Delano Technology Corporation where he successfully led Delano to its initial public offering and listing on NASDAQ. Previous to that, Mr. Hearne held the role of Chief Financial Officer at Open Text Corporation, a public company trading on NASDAQ and the Toronto Stock Exchange, where he was responsible for financial management, acquisition planning and investor relations. Mr. Hearne has also held the roles of VP of Finance at Algorithmics Inc. and European Controller at Alias Research Inc. He holds an M.B.A. from the Schulich School of Business at York University, a B.A. from Trent University and also earned the professional certification of Chartered Accountant.

A country boy from Peterborough who made his way to the bright lights and big city of Toronto, Mr. Hearne epitomizes a true Score viewer through his love of Mixed Martial Arts and dedication to competing in duathlons during the summer months.

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About the author

Rob Woodbridge

I'm Rob, the founder of UNTETHER.tv and I've spent 14 years immersed in the mobile and pervasive computing world. During this great time I've helped some of the most innovative companies grow their business through mobile. If you are in need of a mobile business advisor or coach, connect with me here to get things rolling.

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