Big news yesterday in the Fantasy Sports world with CBS Sports announcing the availability of an API for a new Fantasy Sports platform. Or it’s intended to be big news, as evidenced by splashy headlines in Techcrunch (A Fantasy App Store; CBS Sports To Launch “First Open Platform” For Fantasy Sports), the Wall Street Journal (CBS Sports Opens Site To App Makers) and Sports Business Journal (CBS Sports Eyes Bold Fantasy Stroke).
One reason I’ve blogged less here recently is that I’ve been heads down working on a startup in the Fantasy sports space, so this is no doubt exciting news that validates much about what we think about the future of the Fantasy sports space. That being said, it looks likely that the intent here will have a greater impact than the actual offering. I’ll explain further.
In September 2010, I answered a question on Quora asking “What have been the major innovations in fantasy football products over the past 5-10 years?“. Part of my (now dated) answer reads:
“The answer is there haven’t been any major innovations in fantasy football….The incumbents can’t or aren’t interested in innovating. The market is dominated by ESPN and Yahoo, with Sportsline the third player and at last check, no one else was even close. None of those companies would be confused with innovative companies (sorry, Yahoo).”
As CBSSports.com SVP and GM Jason Kint noted in the SBJ article:
“The fantasy sports experience simply hasn’t evolved as much as we’d like in the last decade…What we’re trying to do is create an ecosystem and accelerate the next wave of innovation in the industry.”
At least CBS Sports is now trying to up the ante. And that intent is a potential sea change.
But as I also noted in my Quora answer…
“Collectively, the business model for [the providers] has been to offer the game itself free and upsell premium content and services and drive high-value page views.”
This shouldn’t be surprising, given that all the major incumbent providers are old-school media companies with walled garden business models, not to be confused with the open, data driven Internet companies that typify successful platforms. (Apple being the obvious and notable exception).
Obviously, the CBS Sports PR folks emphasized the words “open” and “data” and “platform” in getting the story to Techcrunch, WSJ and SBJ. But the reality is that the combination of “open” and “data” are not compatible with their walled garden business.
And as YouTube’s Hunter Walk noted in a recent blog post: “You don’t get to decide if you are a platform“.
“A platform doesn’t just mean that others can integrate or use your services, it means you have a compelling technical and business proposition which creates enough value for both you and developers to run sustainable and competitive businesses.”
That’s where this effort may fall short of its intended impact. The API is open only for developing with CBS Fantasy Sports data within the CBS Sports ecosystem. It’s not “open” if it’s limited to and kept within a tightly defined ecosystem.
And that has far more limited potential.
For starters, some significant majority of the users in the fantasy sports space exist outside of the CBS Sports ecosystem. And some significant majority of the data that exists in the fantasy sports world exists outside of the CBS Sports ecosystem (not to mention a significant amount of the data inside the CBS Sports ecosystem, such as an NFL player’s statistics for any given game, is legally in the public domain). And CBS wants an Apple-esque 30% revenue split.
Are there enough users, enough revenue potential as well as enough value in partial data from a closed ecosystem to create the developer mindshare and app ecosystem required for a successful platform? That remains to be seen. There are already plenty of (mostly poor quality) fantasy apps available in the Apple and Android/Chrome app stores and none have achieved any real critical mass to date (outside of some traction with free, native app versions of the fantasy game from the incumbent providers), and those app ecosystems are many orders of magnitude bigger than the CBS Sports app ecosystem.
Despite CBS’ PR claims, they are not the first or even the second company in the space to offer a “Fantasy platform”. Yahoo offers a similar restricted API with even more onerous “non commerical terms” while longtime independent provider MyFantasyLeague.com has been offering an open and free API for years. The opportunity to build 3rd party apps existed before this announcement.
I don’t want to be overly negative, because this is a big step in the right direction, but it just feels like CBS Sports’ efforts to keep the ecosystem closed is only an incremental step better than the “non commercial” API offering from Yahoo. There’s a “defensive” trend there, an acknowledgement that there’s value in the data yet an unwillingness to make it truly “open”.
But this effort does show a willingness on CBS Sports part to innovate and that will force the hands of their competitors as we’re getting closer to the tipping point where these walled gardens won’t be able to put the toothpaste back in the tube.
It should be noted that CBS has had some recent success in playing defense and holding on tightly to their existing competitive advantages(See: CBS and Hulu) and that there are an impressive set of launch partners, including Bloomberg Sports, Rotowire and MLB Advanced Media.
This will likely achieve CBS Sports’ goal of spurring innovation in the space, but whether or not they have the market positioning or necessary agility to capture all the resulting value remains to be seen.
Regardless there’s no doubt that there is ample opportunity for entrepreneurs in the Fantasy sports space.