Mobile apps a slam dunk for Score Media

It may seem surprising that Score Media Inc. is hiring a whole bunch of techie types these days. And they’re not there to keep the computers from crashing at the company’s specialty sports TV channel, The Score.

The company is bringing more software developers on board as part of its sweeping foray into the mobile app market. Though Score Media Inc. may never win the sports TV viewership game against bigger rivals TSN and Sportsnet, it’s winning new fans — and revenue streams — by transforming itself into one of the top sports app content providers in the world.

Toronto-based Score Media launched The Score as a sports specialty channel with 60 employees back in 1997, a full 13 years after TSN hit the airwaves as Canada’s first national English language sports channel. Today, Score Media has 270 staff (and growing, thanks to those recent software hires) and a newly competitive lease on life, due in large part to the growth of its mobile sports app business.

“We’re coming from a background as a TV broadcaster. So it’s one thing to start hiring Web developers, but we actually now have a software practice here that’s quite significant. And I think that’s really quite notable for a broadcaster to be undertaking software development,” says Dale Fallon, vice-president of digital products at Score Media.

The company launched its first app, ScoreMobile, in 2007. There’s also ScoreMobile FC for soccer diehards (in English and Spanish versions to boot), and SportsTap, a rival U.S. app acquired by Score Media in May. (The ScoreMobile and FC apps are available for iPhone, Android and BlackBerry; the SportsTap app is only on iPhone and Android at present.)

According to industry tracker comScore Inc. (similarly named but unrelated to Score Media), ScoreMobile and SportsTap combined are the third-most popular mobile sports apps, behind those of ESPN and Yahoo!, but ahead of sports apps put out by American broadcasting behemoths Fox and CBS.

Although The Score TV channel had a late start against TSN and Sportsnet, its focus on headlines, highlights and scores is an obvious fit for the “quick fix” bursts of content favoured by mobile app users.

“I think it’s a natural progression. The Score has built its TV business on short form content whereas TSN and Sportsnet do more live events. That kind of short form content plays really well on mobile apps,” says Massimo Voci, a technology analyst who follows Score Media for MGI Securities Inc. in Toronto.

“It’s a good opportunity for the company to expand their business beyond Canada and beyond TV,” Voci adds.

And although TV broadcasting is heavily regulated by governments via the Canadian Radio-television Telecommunications Commission and the Federal Communications Commission in the U.S., the mobile app market is completely unrestricted, opening up new sales opportunities for Score Media around the globe.

“The mobile (apps market) specifically, it’s not regulated. And (Score Media) was one of the very early entrants into mobile with their app, which they really put a lot of time and development into,” says Scott Rattee, who tracks Score Media as a special situations equity analyst at Stonecap Securities Inc. in Toronto.

The apps are free for users, so the company makes money through ads running on them alongside content. Score Media doesn’t break down how much revenue comes from mobile apps specifically, but the firm recently posted a third quarter profit of $700,000, up from $600,000 in Q3 a year earlier. Revenue jumped 10 per cent year over year in Q3 to $13.2 million. Based on his own conversations with Score Media executives, Rattee estimates that ad revenue from mobile apps alone probably grew by a substantial 42 per cent in Q3 from the same period 12 months earlier.

Competition is heating up in the sports app arena, with all the major professional sports leagues in the U.S. launching their own mobile apps in the past 18 months, including the NBA, NFL, NHL and MLB. And Yahoo! acquired app firm Citizen Sports last year as well.

Score Media is keeping up by recently buying a 20 per cent stake in Nulayer Inc., a Toronto firms that specializes in software development for mobile apps. Score Media also just hired Lars Laakes away from peripherals maker Logitech International to be the new director of software engineering for its digital products teams. And its acquisition of U.S.-based SportsTap gives the company a launching pad for ad sales in the American sports app market.

“We made the decision earlier this year that we could take the step of opening a sales office in New York, which could lead to other sales offices in the U.S.,” Fallon says.

The SportsTap purchase will definitely bump up American use of Score Media’s mobile apps, which now stands at 65 per cent of all of its mobile app use worldwide, says Voci.

The newer emphasis on digital mobile products doesn’t mean Score Media is ignoring its other media business streams, including the Score.com Web site, its satellite radio service on SiriusXM, or the cornerstone TV channel available in 6.8 million Canadian homes. But it’s the current sweet spot in a multimedia market that is constantly changing.

 “We need the TV station to continue to be successful and operate profitably,” Fallon says. “But for our company there are significant opportunities for growth outside of Canada, and it happens to be the digital platform where we see that happening.”

Christine Wong is a Staff Writer at ITBusiness.ca.

Share on LinkedIn Share with Google+
More Articles