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Next Big Player in Digital Media: Baseball

Kavitha A. Davidson is a former Bloomberg View columnist.
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Major League Baseball fans will soon have more options for watching their favorite team. And non-sports fans yearning for a cordless future will have reason to cheer as well.

MLB has settled a class-action lawsuit over its broadcasting practices and will offer discounted streaming packages for individual teams as well as limited streaming options for previously blacked-out home games, moving fans one step closer to cutting the cord from cable and satellite.

The league will offer single-team packages on its MLB.TV website and mobile app, a move MLB had already indicated it would take in its December court filing. Previously, fans were forced to pay for a package that included all 30 teams. The single-team packages will be set at a fixed price of $84.99 for the next five years.

In addition, MLB will lower the price of its league-wide package from $130 to $109.99. The league has also agreed to limits on future pricing: After 2016, MLB can only raise prices by 3 percent or the cost-of-living adjustment that year, whichever is higher.

Starting in July, MLB will also offer a new service, "Follow Your Team." This $10 add-on will allow MLB.TV subscribers to watch the away broadcast of a game featuring their home team, if they already subscribe to their home team's regional sports network. You'll still need a cable subscription, but a White Sox fan living in New York would be able to watch the CSN Chicago broadcast of a White Sox-Yankees game if she already subscribes to the YES Network. Previously, all in-market games were blacked out from streaming.

Follow Your Team builds on the league's announcement back in November that it had struck a deal with 21st Century Fox to stream in-market games to cable subscribers of Fox's 15 regional sports networks. Tuesday's settlement extended that to subscribers of DirecTV and Comcast's sports networks as well. Between the three companies, this covers all teams but the Dodgers, Mets, Nationals, Orioles and Red Sox. 

MLB will also permit providers to offer single-team packages as part of their MLB Extra Innings product, a set of premium channels offered on cable and satellite that until now only featured one package with all MLB teams. If a provider elects to sell single-team packages, it must offer them for each of the 30 ball clubs. 

Finally, the settlement includes a very limited provision for "unserved fans" who live in areas without access to any cable or satellite services. Those fans will be able to bypass blackout restrictions and stream in-market games.

It does not, however, provide relief for those underserved fans in places like Des Moines, Las Vegas and Honolulu -- each of which have cable and satellite options but fall into the broadcast territories of six "local" teams. Hawaiians are apparently required to consider as hometown heroes the Los Angeles Angels of Anaheim, Los Angeles Dodgers, Oakland A's, San Diego Padres, San Francisco Giants and Seattle Mariners.

Under MLB's blackout policy, subscribers of MLB.TV and MLB Extra Innings can't view live broadcasts of games featuring their designated home team, even if you are unable to watch those games on cable or satellite. (In fact, the new settlement requires you to subscribe to those games on cable or satellite in order to stream them live.) If you live far away from where your "home" team is actually located, chances are your local cable provider doesn't carry the regional sports network that broadcasts those games.

Nonetheless, it's a consumer-friendly settlement that stops short of full cord-cutting, but is clearly the means to a future of standalone sports streaming. It closely mirrors the deal the National Hockey League struck in settling its own class-action suit back in June, which introduced a la carte packages and discounted league-wide offerings.

It's also further proof of how MLB is particularly forward-thinking when it comes to digital media. MLB Advanced Media -- which in August formed a partnership with the NHL to create a spin-off digital entity, BAM Tech -- was a pioneer, providing the streaming technology not just for MLB and NHL games, but also for non-sports services such as HBO Now. A future in which baseball games have gone completely over-the-top is one in which BAM can position itself to challenge Netflix and Hulu by offering live sports in addition to movies and TV shows. Pushing BAM to that next level will hinge on the gradual erosion of blackout restrictions, as seen in Tuesday's settlement. MLB's deal could thus cause ripple effects in digital media far beyond sports, helping to usher in the change in how we consume all content.

Getting back to baseball, it can only be a good thing for MLB's growth potential to provide access to more games to more people, especially if those people are prone to watching television on the Internet. Much has been made of MLB's issues with its core demographic: "Baseball and radio seem to go hand-in-hand," states a 2013 report by Nielsen that revealed half of MLB fans are 55 and older. That's not exactly what you want to hear if you're trying to adapt to a rapidly evolving media landscape. Changing and expanding the way baseball is consumed will go a long way to capturing millennial viewers and widen the fan base for the future.

It's just a matter of time before cable and satellite fall completely by the wayside. Tuesday's settlement was great for most fans, while boosting Major League Baseball as both a sports league and a major player in digital media. 

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Kavitha A. Davidson at kdavidson19@bloomberg.net

To contact the editor responsible for this story:
Tobin Harshaw at tharshaw@bloomberg.net