MLB, UFC Trying to Stamp Out Live Stream Piracy

Nothing good ever comes from representatives of Major League Baseball traveling to Washington to talk in front of legislators. In the case of yesterday's visit with members of the House Judiciary Committee, the bad news was not for the league, however, but for those of us, er, you, who try to watch games online. Without paying for them.

Yes, per Darren Rovell's report at CNBC.com, representatives from MLB and UFC were in front of the House Judiciary Committee yesterday to discuss piracy. And much to the chagrin of thousands of online users, the leagues are against it.

UFC chairman and CEO Lorenzo Fertitta, who testified on behalf of the mixed martial arts league on Wednesday, told CNBC that live streaming to the Web is a major concern, but it’s also hard to deal with.

“These sites provide us with a tool to take live streams down,” Fertitta said. “But for our last fight, there were 160,000 streams going.”

The advancement of piracy has always been uniquely tied to technology. Ten years ago you'd hook up an illegal cable box to your TV and record an event on VHS to redistribute. But then something happened: people started putting media online. With increased bandwidth coming in and out of our computers, it's only gotten easier to share – and steal – content, so much so that huge companies needed to come up with a way to keep their product proprietary. Sites like Hulu and iTunes don’t exist solely to make money. They exist because without them, we'd still be going to our computers to find that exact same content. By making it more accessible, and more legal, they can head some of that piracy off at the pass, and make a buck in the process.

But neither Hulu nor iTunes can account for live television, and nothing is more live than sports. ESPN360.com completely changed how games can be consumed online. Not only is the video live, it's usually at a decent quality, and most importantly, free to those whose cable service providers offer the service.

Following that model, NBC and the NFL offer football games streaming live online, with extra camera angles you can't get on television. NBC also streams the Olympic Games live online (selected events) to allow people to follow events the network doesn't have time to show live, or at all, on television. Online viewing has changed the way we consume sports, and nothing is more obvious than how CBS offered March Madness on Demand. High definition video (note, the NBC Olympic events were also high-quality video) that was free to the consumer. It's revolutionary and last year, more than 5 million people consumed MMOD on the first weekend of the tournament alone. For free.

Going back to the entertainment model, iTunes has done an incredible job of getting people to pay for content we all can steal, if we really wanted to take the time and risk involved to steal it. Hulu has announced they may be charging users in the future, but for now, remains advertiser-based. The disparity of how content is offered (free or pay) differs in sports as well. While the networks have been providing content for free, the leagues see money to be made in subscription services, so they've been reluctant to allow viewers to consume their product for free. Take MLB, for example, where on any given night you can watch 15 different games on TV or online. The league allows teams to negotiate their own local TV deals, so taking those feeds and offering them online for free in an advertiser-based system would change the way every team would have to set up advertising deals. In theory, the league may be cut out of the pie more if they offered content for free and placed ads than in the current system of charging consumers directly for the content. The same goes for NHL or NBA league-wide streaming services. If people will pay for it, why offer it for free?

To build the brand. I'm not saying that a company like UFC should allow pirated streams of their pay-per-views, but it doesn't actually hurt their brand as much as they want people to think. Of those 160,000 streams that are going online during an event, how many of those people would purchase the PPV if there was no way to watch it for free? I remember a four-year span where I watched every single WWE pay-per-view and never paid a dime – note, I was at a friend's house and whether or not they purchased the event was never asked (looks both ways, ducks) – but we were consuming their other products. We watched the over-the-air shows leading up to the PPV. We visited websites or purchased merchandise and went to live events when they came to town. But once the ability to watch the PPV disappeared, there was no way we were paying for the content. With the lack of a payoff, much like with UFC's PPVs, it became less important to watch the shows building up to the event. Eventually, most of us stopped consuming the product altogether.

For MLB, NBA et al, I understand the business model. Diehard fans will pay to have the ability to watch all the games and the leagues have television subscription packages already in place that rake in millions of dollars. Giving that same content away for free online doesn't really make much sense in the hopes that casual fans will log on to watch a game solely because it's free.

Yet somehow CBS' coverage of March Madness, NBC's Olympics video and ESPN360.com have all been huge successes, for both fans and for the networks. Heck, I'd never pay to watch the Olympics – even the track and field or basketball events – but since it was free, available and unobtrusively adorned with ads, I watched more handball and archery than I ever care to remember. That has to be worth something.

This post originally appeared on the Sporting Blog. For more, see The Sporting Blog Archives.