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Advertising vs. Licensing: How can you tell what is appropriate?
Here's something I don't quite understand the economics and protocol of...
MLB pays to advertise, right? Whether it's the league or teams or whoever, I see baseball ads in the subway.
Yet, if you want to use MLB stuff in a video game, you have to pay them for the license.
But, when MLB wants to be in Second Life, that's free, except for the product costs of hiring someone to contruct the virtual ballpark.
So let me get this straight.... MLB pays to advertise in old media channels that people are paying less and less attention to, only pays minimal production costs to play in what a lot of people believe is the future of online, and then gets paid to be in a growing market where attention is full and engagement is off the charts?
Am I missing something?
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This is a great question and one that has confused me too!! Makes me think of the classic example - product placements in films. I think there is a threshold at which value has been established and groups can demand fees for placement. Until that value has been established, its the reverse. In media, where the value was established 20 years ago, there may be a lag before the market adjusts.