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Subject: TSN 2002 game revenue: "several million dollars"
Posted by: James K Polk
- [51010719] Tue, Mar 04, 2003, 16:28
Tidbit item at Poynter Online
Revenue was "several million dollars" in 2002, according to Jason Kint, VP for TSN's online division. "The actual cost of operating the games isn't that expensive once you get past a certain level of fixed costs," Kint says. "Then it gets pretty profitable. We're about at that point now." |
| 1 | Perm Dude
Leader
ID: 0059248
Tue, Mar 04, 2003, 16:31
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Oh oh.
I sense some angry Gurupies coming on...
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| 2 | Toral
Sustainer
ID: 2111201313
Tue, Mar 04, 2003, 16:33
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Ya, the revenue is good but let's not forget the costs.The guy who picks up the incoming prize faxes off the floor and dumps them into a closet makes five dollars an hour!
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| 3 | ChicagoTRS
Sustainer
ID: 256101115
Tue, Mar 04, 2003, 16:43
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I am glad they are profitable...maybe they will continue to improve and will be around for a few more years. I am not complaining...I won more money than I spent on their games this year.
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| 4 | RecycledSpinalFluid
ID: 42121814
Tue, Mar 04, 2003, 17:29
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I have a hard time believing the "several million dollars" claim.
Just for discussion, lets say 1 million dollars and no operating costs. Now for git and shiggles, lets say $20 a pop per team (which it never is after discounts). Lets see, carry the one, invert pi, square the polymonial...and that makes 50000 teams. Now think about how many teams have been in the Ultimate games. Maybe 4000-7000 per major sport. I guess my numbers don't even add up to the million bucks part there. I might/must be missing something.
But I am forgetting the lovely "pay-per-trade" act that is the basic games. Maybe they are making a killing there. Dunno the answer to that.
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| 5 | Perm Dude
Leader
ID: 0059248
Tue, Mar 04, 2003, 17:40
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A little bit here and there is my guess.
-Some advertising revenue.
-Some sales of content to other fantasy sports sites.
-Some sales of stats to other fantasy sports sites.
-Some trade sales (several thousand there would be my guess--lets say 5% of teams buy trades, $1/pop, probably 5 trades or so on average. There's $1000/sport/season with no overhead. And basic games are split seasons).
-Some kickbacks from TSN magazine subscriptions, I'd bet.
Little bit here and there, and pretty soon you've got some money. As with any online company, the key is maximizing these small revenue streams and lowering your overhead and transactional costs.
pd
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| 6 | biliruben
Sustainer
ID: 49132614
Tue, Mar 04, 2003, 17:43
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Are they publicly traded?
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| 7 | Guru
ID: 330592710
Tue, Mar 04, 2003, 17:56
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If you drill down to the cited article, you get some more facts and figures.At the time, it was clear that sports fantasy sites could not survive on advertising revenue alone. So the company began shifting Smallworld's three million users to a paid subscription program, starting with the 2001 football season. Of those, several hundred thousand people agreed to buy subscriptions in the first year, said Jason Kint, vice president for the online division of The Sporting News. That helped generate "several million dollars" in sports fantasy revenues last year, he said, up from about $250,000 in 2001.
Users will pay $20, for instance, for this baseball season, and will receive e-mail updates about their players' performances, standings and news about each professional team, among other things.
Mr. Kint said that his Web site did keep some free games, but that it had offered users the opportunity to buy, à la carte, some of the services available to subscribers. For instance, in a free fantasy football game on TheSportingNews.com, users receive a limited number of trades each week but can buy additional ones for $1 apiece. The site earned $500,000 on that feature alone last football season.
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| 8 | James K Polk
ID: 51010719
Tue, Mar 04, 2003, 17:58
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RSF 4 -- pay for trades is apparently huge!!! From that NYT article:
For instance, in a free fantasy football game on TheSportingNews.com, users receive a limited number of trades each week but can buy additional ones for $1 apiece. The site earned $500,000 on that feature alone last football season. Guaranteeing that PFT model will never go away from the free games :)
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| 9 | James K Polk
ID: 51010719
Tue, Mar 04, 2003, 18:04
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Sorry for the duplication. Didn't refresh and see Guru's post.
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| 10 | biliruben
Sustainer
ID: 49132614
Tue, Mar 04, 2003, 18:12
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idjuts. Just buy real team.
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| 11 | StLCards
Sustainer
ID: 4431816
Tue, Mar 04, 2003, 18:44
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LOL Toral! That (post 2) is hilarious!
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| 12 | slar
Sustainer
ID: 530492918
Tue, Mar 04, 2003, 19:40
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I'm curious... Did Ira help them calculate "several million dollars"?
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| 13 | KnicksFan
Donor
ID: 439341814
Wed, Mar 05, 2003, 02:14
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I bet TSN is getting revenue by running some other "fantasy" sites...the ones you need to be over 18 to enter.
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| 14 | ESB
ID: 8156714
Wed, Mar 05, 2003, 16:24
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Gang:
Don't want to get too far into this, as our financial data is private. But yes, the PFT business is big, not just in football but in other games as well. And our big Ultimate games -- football and baseball -- are way outside of your projections, RSF. Combine that with a growing Strat business, a little advertising revenue and magazine sales, and you get the idea.
-ESB
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| 15 | ChicagoTRS
Sustainer
ID: 256101115
Wed, Mar 05, 2003, 16:44
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congrats...I am glad you are turning a profit. hopefully you will pump a certain % of that money back into the game in the effort of making them even better.
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| 16 | The Left Wings
ID: 6142019
Wed, Mar 05, 2003, 23:20
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For example, make them cheaper.
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| 17 | culdeus
Donor
ID: 4171112
Thu, Mar 06, 2003, 09:20
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Ok, budding economists out there.
"The actual cost of operating the games isn't that expensive once you get past a certain level of fixed costs,"
What sort of basic operating principle is this?
What would happen if...lets say...Bill Gates made this statement about MS?
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| 18 | Perm Dude
Leader
ID: 1225156
Thu, Mar 06, 2003, 09:42
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Well, it's certainly more true for a company providing service than for a physical product. And even more true for a company providing services strictly on-line. Once basic overhead and other costs are covered, nearly all of each additional dollar is profit.
With a physical product, there is always going to to a (relatively) large per-piece cost which has to be covered. That cost can be driven down through economies of scale, shipping deals, worker efficiency, and other means to drive down the transactional costs. But physical products will always present higher per-piece costs than non-physical products.
The trick, of course, is getting the revenue streams up to that threshold through a mix of sales, including rights sales. Sounds like TSN has that mix right now.
Unfortunately, it doesn't sound like the business plan allows for as much of that money to flow between games as it could. Forcing each game to be profitable, for example, can sometimes lead to poor service for the games that are not making money right off the bat. A longer-term look at Auto Racing, Golf, and Soccer might be in order now that the overall TSN Fantasy Sports area is a certain money maker.
Just one guy's opinion....
pd
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| 19 | penngray
Donor
ID: 453492921
Thu, Mar 06, 2003, 11:09
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TSN strat-o-matic seems to be very active. I know alone I spent $400 last year on it and there were many others like myself. Football and Baseball are offered.
I would assume revenues include those also and I think TSN is doing most of their R&D in that area so that probably means there growth is in that area.
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| 20 | Jesse
Donor
ID: 32221617
Thu, Mar 06, 2003, 18:27
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Eric,
maybe im an idiot, but i didn't get any of my prizes including a top 50 or top 40 finish prize, i can't remember. I also won 4 divisions. i am annoyed that i had to do that faxing, and so i never got the prizes. I just think there is an easier way to get my tax info through e-mail and send me my prize. I am confident that you can make this easier.
i wouldn't mind you guys sending some shirt or something my way as a token, considering you didn't shell out however much my prizes were worth.
jesse
jessep@optonline.net
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| 21 | RecycledSpinalFluid
ID: 1924582
Sat, Mar 08, 2003, 02:23
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Wow! According to these guys, Strat-O-Matic is producing Strat-O-Moola. At $24.95 a pop, that is a definite cash cow.
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| 22 | penngray@2ndcomp
Donor
ID: 161131911
Sat, Mar 08, 2003, 10:39
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very addictive for me!!!
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