Pricing strategy · Sports

How to price data for use in a sports channel?

Samik Raychaudhuri

August 29th, 2014

We are potentially getting into providing some interesting derivative data to a sports TV channel, but we have no idea how to price our offering. The data would probably show up as part of the numbers shown before a game, or while the game is in progress.

Obviously, we would like to go for "pricing for the value of the offering to the channel", rather than price it as (Number of hours it took to derive the data * $/hour) * Margin. But then, it gets difficult to estimate the "value of offering".

Another way we have thought about is to correlate the pricing somehow to the rate the channel charges to advertisers for that series. Although we can probably get the advertisement rate for the channel for the series, we have no idea how to arrive at the correlation.

Would like to hear if someone has any experience in this area, or has come across any related article/pointers.

Graeham Ford-Feliz CEO at Emergent Coast

August 29th, 2014

Is it a completely new offering or are there competitors with the same/similar offering?

I've never done this personally, but I've heard of entrepreneurs talking with potential customers on the phone, doing customer development, to find the value-add of their offering in dollars, then setting the price of the offering at 10% of the value-add, so it is an easy "yes" by the customer.  It will be important to talk to the right person that knows the numbers of the business and to ask the right questions.


Samik Raychaudhuri

August 29th, 2014

Graeham, appreciate your response. Yes, the data that we are providing are completely new (no competitors are having same/similar offering at the moment). With that said, there might not be too much of a barrier of entry here, so it is important for us to price it right so that we get the first-mover's advantage and capture as much of the market as possible before other competitors show up.

Graeham Ford-Feliz CEO at Emergent Coast

August 29th, 2014

awesome, that is a good position to be in, congrats! :-)

If you have a large enough pool of potential customers and are truly in uncharted waters, I would try some form of A/B testing on the price, starting with something that is a balance between a price the customer would definitely accept if your hypotheses are true and a price that covers your operating costs.  After which, you can increase the price to new customers and see if it is still accepted.

I am far from a pricing expert, but I hope that helps :-)

Samik Raychaudhuri

August 30th, 2014

Thanks Graeham - we actually do like your first comment about charging 10% of value-add. I think we might still have to prepare and do our homework in case we are offered a lowball, but I think this might be a reasonably prudent approach. Still investigating.