The MIT Sloan Sports Analytics Conference was this past weekend, and a particularly hot topic there was the MLB's adoption of iBeacon, Apple's (NASDAQ:AAPL) new geolocation technology. With a roll-out planned for 25 ballparks this season, it could fundamentally change how fans experience baseball -- here's how.
The technology behind iBeacon
Unveiled at last year's Worldwide Developers Conference, iBeacon is a system of "low-powered, low-cost transmitters that can notify nearby iOS 7 devices of their presence," according to recent Apple trademark filings. The company says that the technology can be used in any enclosed environment, from retail stores to sports arenas. By way of Bluetooth, iBeacon transmitters sync with mobile phones to send users personalized information that depends on what apps they've installed.
In baseball stadiums, for example, anyone who has installed the MLB's At the Ballpark app will receive updates on concession stands, seat locations, and possibly real-time stats related to action on the field. Venue-specific information may also be available. The New York Mets reportedly have a beacon close to their historic "Home Run Apple."
In addition to the Mets, the L.A. Dodgers and San Diego Padres have already installed iBeacon systems in their home parks.
How to fix baseball's biggest problem
It's no secret that professional baseball has an attendance problem. The average MLB team has lost close to $5 million in annual ticket sales since 2007, and as I wrote last month, it's simply "cheaper, warmer, and easier to watch the game on TV than at the ballpark or stadium."
Using technology to boost fan engagement is one way to alleviate this issue, and iBeacon gives teams an inexpensive first step. The Dodgers and Padres, for example, have 65 iBeacons between them, according to Recode, and most estimates place the cost of a typical beacon, produced by Qualcomm (NASDAQ:QCOM), at just $5 to $10. Even if each device costs 10 times that price, it's still a fraction of what some NFL teams are paying for multi-million-dollar fantasy lounges.
While the MLB hasn't discussed monetization in too much detail, ads are an obvious money-maker. In-app discounts on merchandise have also been discussed, and coupons on beer and food items may give stadium revenues a small shot in the arm.
Apple, meanwhile, doesn't stand to make a boatload of cash from baseball's iBeacon rollout, but the exposure the technology will receive is a long-term positive for the company. As fellow Fool Evan Niu wrote last year, "iBeacon alone might never be a headline-selling feature for iDevices, but it certainly adds a complementary service." Because the iPhone's calling card is a UX that stimulates engagement in many different forms, users should have no problem adopting the technology. Compatibility with Google's (NASDAQ:GOOGL) Android operating system is an additional plus.
Looking toward the future
Declining attendance is costing the MLB millions of dollars every year, and iBeacon offers an elegant way to pique fans' interest. By this summer, the majority of the league will have the technology installed.
At the Ballpark is currently free, and due to its presence in the Apple and Google app stores, there's no real reason it can't become a regular part of the baseball experience.
Merchandise and concession coupons won't make a game cheap, per se -- even the lowest Fan Cost Index was over $150 last season -- but they can't hurt. Although an in-app rewards program has been rumored, I have a better suggestion: a free beer for first-time users, and an extra draft if a friend downloads At the Ballpark. That's a freebie that no one can ignore.