David Katz from SportsFanLive, Interview Part 1

David Katz has seen the online media business from all sides: First at a traditional television company, then for a Web portal, and how at his own start up.

At CBS he was senior VP of strategic planning and interactive ventures, which put him in charge of the network's website as it was first evolving from, essentially, a marketing brochure to a destination with real content. In 2005, after leaving during a shake-up at CBS, he joined then-new head of media Lloyd Braun's team at Yahoo, overseeing sports, entertainment and original video production. By late 2006, perhaps seeing the writing on the wall, he left just a week before Braun did the same.

For the past two years, Katz has been developing his own site, SportsFanLive, which launched last summer. Katz's goal with the site is to bring a more social, more personalized, and more local experience to online sports business currently dominated by sites like ESPN, Sports Illustrated, and his own former Yahoo Sports.

Last week Katz spoke to Technotainment about his new company and the overall industry. In the first of a two part interview, he discusses his goals with SportsFanLive and how it's competing with much bigger players. Tomorrow we talk about new approaches he's taking and the overall online media market.

Ben Fritz: Tell me about the premise of the site. What are you trying to do? Why did you start it?

David Katz: The whole concept of SportsFanLive was... When I was at Yahoo Sports, and CBS before that, those sites had a very good run. Yahoo Sports did incredibly well, became a number one sports site on the Internet, and we saw a lot of potential there, quite frankly, that wasn't even being realized.

Yahoo Sports was great at aggregating news and information, then breaking stories, putting video out there, but my personal belief was that social media was going to play a much larger role in the sports space. When you think about the sports experience, it shouldn't be any dissimilar to the experience that someone has when they walk into a sports bar. There's a socialization process: you care about certain teams, you're there to watch a certain event, you're there to engage with the people around you who either love your team or hate your team.

So the question we asked was, "If you were building a Yahoo Sports or an ESPN.com from scratch today, knowing everything you know about social media and where that's going, knowing everything you know about how the traditional media DNA needs to evolve to include the bloggers and the blogosphere and everything that's going on there, how would it be different – would it be different? – and more importantly, can you innovate in that space?"

That's because a lot of these sites started to look the same. You change the color of the site, you change the logo at the top, and swap out of a couple of the writers they had, and it's effectively the same site powered by the same content coming from the stats.

So at SportsFanLive, we took that step back and said, "Let's just think about the space, and be innovative." And what we built at SportsFanLive was an ecosystem that, we think, had a level of innovation that didn't exist on a lot of the other sports sites, both large and small.

It really came down to to three buckets. One, aggregating the best news and information, personalized to your favorite teams and players. We didn't see enough personalization on these sites and we felt like ESPN didn't want you to know that SI.com wrote a really good piece about your favorite team. I still believe that the majority of sports news is broken at the local newspaper level, and they don't get enough credit for that, so we aggregate all of that stuff from all the sources in one place, and we think we've got the most robust filtering and aggregation system that exists for sports sites.

Two, the community aspect. "Can you pull in the right information from the relevant people, and connect users with their friends and other relevant folks?" When I go on ESPN and some of these other sites, I've never felt the impetus to share what I'm experiencing there with anyone else. I kind of read the article, and if I like it and there are some great articles there, I move on to the next article, or I see the next video clip. Our standpoint is, "Can we build those connections between people?"

Mind you, this was two years ago we were conceiving of this. Facebook was small, but we thought had potential. MySpace was big. YouTube had just been acquired. We opted for more of a Facebook-ian experience, where you bring your friends in and you connect more to what your friends say or do. But we also said, from a social perspective, "Could you come up with innovative features that do not exist today?" and one of those that we came up with was called FanFinder.

The concept of FanFinder was very simple. I'm from Baltimore, I'm a big Baltimore sports fan, I live in L.A. now. It's guaranteed that they will never show a Baltimore sports game here in Los Angeles as long as I live, so I'm forced to go out to a sports bar if I want to watch the Ravens. So I'd go out to these sports bars, and no matter where I went, I was surrounded by Steelers fans, guaranteed. They're everywhere. So I ask myself the question, "Where do Ravens fans in Los Angeles get together to watch these games?" Thus, FanFinder was born. It's effectively a sports bar locater where fans tell you where they're going to watch certain games, and you can sort of cluster around your team affinities.

Well, we decided to take that one step further. We got a lot of attention when we launched around that feature, because from a high concept standpoint, people found it pretty creative, and it solved the specific sports fan need. We were approached two months ago by Panasonic, who said "We love that feature – what can you do that's new and cool around it?" So we created our first iPhone app.

FanFinder Mobile uses GPS to identify where you are in the U.S, will immediately tell you where the ten closest sports bars are to you, wherever you are, and then you can specify the teams you follow, shake the device and it will re-sort to tell you whether there are any sports bars catering to your team's fans within X number of miles from your location.

BF: And Panasonic is going to be sponsoring it?

DK: Panasonic is going to be sponsoring it. I think part of the rationale was that they're excited about the idea, they have a new Panasonic TV that was coming out that's great for sports, and were trying to push that into sports bars around the country. "Here's a way to get people into sports bars." So they were the official sponsor.

We got it up literally the day before the NCAA Tournament, and Apple... you know, dealing with these companies, it's a bit of a black box. You go it, and there's no one you can talk to. You follow the rules in the API, and you do your best to present something you think they might like. Apple loved what we were doing. We got a phone call from them, and they said, "We're approving your app. We love it. It'll be in there for the Tournament," and they actually made it the number one featured app in the entire App Store for the first ten days of the NCAA Tournament.

It was phenomenal. It's the best promotion money can't buy, and it was really just about touching a chord with them that they think is interesting and utilizes a lot of the cool things you can only do on an iPhone.

BF: It seems like regardless of whether you're getting local content for me as a fan, or you're getting information on a sports bar, that's a lot of information. Are you developing a platform around that, or are you having to get that manually in a lot of cases and enter it? Where does that data all exist?

DK: We spent the larger part of almost a year building a platform and the majority of that stuff is automated and filtered. There's a little bit of human intervention in terms of building the databases, in deciding what you're going to be culling from, and pulling from, and where those sources are, but we wanted to make the effort today to get all that stuff so it could run on its own. We have a very small team with limited manpower, and we want to make sure we're putting our efforts towards the most important things.

BF: But is there a database of what sports bars, for instance, are for which teams?

DK: We built it.

BF: So you had to get every sports bar in America to tell you where they are and what teams' games they show?

DK: Yeah, we're not going to divulge our strategy on that, but it was... it was a combination of research and brute force effort, and over many, many months to pool it in the database, and like a lot of these things, they're constantly evolving. You never say, "We're done," you say "We're 90% of the way there, we think it's good enough to launch, and now we're going to get better and prove it over time." That's been our approach and there's no one source. If there was one source for all of this stuff, it probably would have been done before, and we'd be providing no value out there.

The whole rationale was to find these pockets of area that we could focus in on, and either do a better job than what we thought was currently being done, or be the first to market to try to do these things.

The only other thing I'll mention with SportsFanLive was the last piece to kind of wrap it all up was the competition side.

So there's content, community and competition, the three main tenets of the sports site in my opinion.

My personal belief is, when you talk about competition, everyone thinks fantasy sports. You draft, you trade – I guess you could also think of betting but let's put that on the side because that's not something we focus on.

The kind of dirty little secret of fantasy sports is while those users are phenomenal users to have – passionate, engaged, spend hundreds of minutes a month on your site if you're one of the top sites in that space – the majority of sports fans do not play fantasy sports at all. I think the numbers are, 15 to 20 percent of sports fans engage in a draft and trade fantasy game...

We have something called FanBux, which is effectively the virtual currency of the site. You earn more FanBux by virtue of your activity throughout the site, and then you have the ability to wager, risk or utilize those FanBux to engage against friends and strangers by creating the sports-related challenge of your choice. It's a drinking game. It can be anything from the serious, "I believe that Bryant's going to go for a triple-double tonight," to "I think Greg Oden is going to wear a pink-colored suit to his post-game press conference." You create what you believe the challenge should be, and post it to the community.

So all those things together form the genesis of SportsFanLive. Phase one, for us, was build the platform, demonstrate the innovation, and get advertisers on board. And we took a little bit of a different approach. Most people, I think, focus entirely, 100% on traffic, then say "We'll get the advertising dollars later," and very often the advertising dollars don't come because the traffic and the items they've created are not differentiable from what everyone else has, and then you're being positioned against people who are always going to be bigger than you and have less content. We opted for innovation, and then "can we sell the innovation," and our approach to advertising was much more of a branded entertainment pitch mixed with direct marketing.

If you just want pure reach, go to an ad network, pay 25 cents, and get your reach. But if you want to 100% share a voice with a very targeted sports audience, if you want to be able to take that feature that you enjoyed, and throw it through your marketing channels through widgets or other things – which, by the way, help our site – all of that becomes a part of the equation.

We've been very fortunate in our seven months of existence, in that we've launched with many blue chip sports brands. We've had Samsung Mobile, Sprint, Samsung HDTV, Panasonic, Bank of America, and the Breeder's Cup. All of those are really quality brands that demonstrate a level of credibility for us, and they each have come in to own different sections, or to do some very unique and targeted things that only our site can do. Now, our focus is on distribution, driving engagement, as well as doing what I think my background would lead me to do a lot more of, which is the original programming and content side.

BF: The one thing I noted when I saw the site immediately was it had the most appealing registration process I've ever seen on a website. Usually when you try to do something, it's like "You have to register," but this site actually asked me interesting questions immediately – "What team do you hate," "What team do you love" – and I actually kind of wanted to answer that. I thought it was a much better way to do it than most sites have.

DK: Thank you.

We've found that you actually root against more teams than you root for, by definition, and it doesn't get enough credit. I'm an Orioles fan – god bless my heart – and that means I have to root against the Rays, and the Yankees, and the Red Sox, and the Blue Jays, because the Orioles are going to be in last place again this year.

We want to build the concept of rivalries, because that's what our site's about, and we also want people to have fun with it, so we actually bring it back in the site a couple of different ways.

For example, if you go on My Sports Page, you'll see we've got in green the five teams you say you love, and we've got maybe seven or eight headlines for each of those teams. In red, we give you the three most recent articles for the teams you hate. As a sports fan, you don't want to know as much about the teams you hate as the teams you love, but you kind of want to keep your eye on them.

BF: To see if there's any bad news, right?

DK: Exactly. Bad news, or "Oh shoot, the Yankees have signed another hundred-million-dollar pitcher, what am I going to do now."

BF: I bet the Yankees are one of the most popular hated teams on there.

DK: We have not run the data for that, but I probably should. That would be amusing.

BF: I'd read that – I bet you'd get attention for saying who the most hated team in America is.

DK: That's good to know – I like that.

BF: The social media landscape has changed a lot, even in two years. Was there a point where you started to think, "we need to make tools that go out to those dominant social networks that have emerged," rather than just be a destination?

DK: Sure. I think there was a misconception when we launched, and my view is always, "Don't tell everyone what you're doing; let them find out, so if they think you're doing something and it's not what you're doing, that's okay." The misconception was that our goal was to build a social media destination. Well, we built an ecosystem, and everything does flow through our site, but it was always our goal to expand those features that we had onto different platforms. We actually have quietly built a partner network of sites that reach several million peoples a month. Our widgets-slash-content modules exist on those sites, and those sites are selected for very specific reasons for us in that they can have content that fits our overall content strategy, so we're looking for quality partners like that.

Now, I think it is extremely risky to build your entire business inside of an existing social network. There are a lot of companies that are doing this, that kind of built the apps when the apps came out, and I think some of them have been able to get some level of traffic just by virtue of how many people are in that space. Two issues with that. Number one is the monetization issue: brands aren't sure how to monetize their existence in the social network paradigm themselves, let alone inside of an app inside of a social networking experience.

BF: Those networks aren't going to let you monetize it without them taking a cut, right?

DK: And that's the exact other piece is, let's not forget how new all of this stuff is, and that a lot of these sites haven't even figured out what their business model is yet, and they've got a lot of opportunity. Just know, going in, kind of buyer beware. You get the benefit of being in an environment that has a lot of eyeballs, and that's great, but you don't really own the consumer, at all. You don't own the user data, which is completely controlled by the social networking community that you're a part of, number one; and number two, they can and do change the rules of the game on a monthly basis. You're always catching up as they change their APIs; you're always looking at how a redesign impacts your business.

Facebook, at the beginning, had all these apps on your homepage: it was a real estate game. Facebook decided – and I think they made the absolute right decision for themselves – to redesign and refocus people's attention on certain features they thought were more important, and clean up the page. Make it a more user-friendly page as people's networks grew. Brilliant strategy.

Well all of a sudden, you went from having Boardwalk and Park Place, to having Mediterranean Avenue or whatever – it's harder for people to find you. That said, we've always believed that the news feed was the place to play, and you don't have to have an app fully embedded inside Facebook or MySpace, Hi5 or any of these, in order to utilize the news feed. So a year and a half ago, we created FanFeed, and our focus was to create an activity feed for sports fans that could ultimately be published in a lot of different places.

Now, we're a small company, and prioritize rigorously what we're doing, so there are a lot of things on the roadmap that you haven't seen yet, and we'll kind of get to them in lock-step, a couple at a time.

(Thanks to Sean Hollister for transcribing the interview)