The latest move in the NHL's aggressive online video strategy is an initiative the league is calling “Hockey Marketplace.” In January, the NHL began making its online video content and technology available to several partner sites that attract hockey fans.
Among those sites are SB Nation, a network of 238 sports blogs, and Ticketmaster, which makes NHL video available to users who order hockey tickets. On its NHL home page, SB Nation embeds game highlights, plays of the week and “The Hockey Show,” a news program produced by the NHL.
Under the agreements, the NHL and its partner sites both sell video advertising, then split the revenue. “We're trying to reach as many fans as possible using as many digital platforms as possible,” said Perry Cooper, the NHL's senior VP-digital media. “That's where we're moving right now in digital distribution. We have about a dozen partners right now; that could easily double next year.”
Although the partnership is just getting started, SB Nation Chairman-CEO Jim Bankoff is optimistic about the relationship with the NHL. “For us, this is a great way to give the users of our sites video—on a daily basis—of their favorite teams,” he said.
Online video usage is exploding on the Web. The number of videos viewed in September totaled 2.5 billion, more than double the number viewed in the year-earlier period, according to a recent J.P. Morgan report, “Nothing but Net: 2010 Internet Investment Guide.”
Ted Kohnen, VP-interactive marketing at advertising agency Stein, Rogan+Partners, said he anticipates that online video advertising will increase this year. “I'm a big proponent of it,” he said. “It provides a higher level of engagement.”
Now, the trick for the NHL, like other video content producers, is to figure out how to generate revenue from this engagement. “Online video, like social networking, is an Internet medium that has taken off in terms of consumer usage but has left publishers and advertisers struggling with how to monetize it,” the J.P. Morgan report concluded.
The NHL generates revenue in two main ways from its online video content. On the paid content side, for example, it sells full games on iTunes. It also generates revenue from advertisers—including b-to-b marketers such as Cisco Systems—that sponsor content or run pre-roll ads at the beginning of online videos.
The NHL began by offering video on its own NHL.com site. Compuware, which markets productivity software, sponsored the online-only “Compuware 2009 NHL Premier All-Access Show” on NHL.com.
The league also has agreements with YouTube and Yahoo.com, which hosts NHL fantasy leagues. Online video plays an integral part in fantasy leagues as team “owners” are automatically supplied access to video footage of their players' goals, assists and saves.
Gelfand said NHL.com's ad revenue is growing. He said revenue generated from non-league sponsors is on track to increase 392% in fiscal year 2010, which ends in June, compared with fiscal 2009. Cooper said NHL.com's unique visitors are on track to increase more than 30% this fiscal year.
Bankoff believes that other professional sports leagues will follow the NHL's lead when it comes to online video distribution. “I think this is a trend you will see with the other leagues,” he said. “The NHL is here first. They're aggressive. They're trying it to get broad access to new fans.” M