For those of you who are not familiar with Flotrack, the website offers video based content for the long-distance running community. Flotrack has amassed quite a following recently and does a great job engaging with the community through Twitter and other social media services. Flotrack has built their current following on re-popularizing the often overlooked sport of distance running to the masses. Their slogan, “Track is Back”, encapsulates their mission and purpose as a brand. For the past three years, Flotrack has skyrocketed in popularity and done a great job promoting the sport in a unique and fun way.
However, more recent business decisions have divided their customer base and have a poor value proposition. Flotrack has hurt the running community by enacting a paywall for a portion of its content. Before you call me naive, I understand that Flotrack is a business that, beyond all of the “re-popularizing the sport” intentions, needs to make money. It is a business, Flotrack’s end goal is to make money and I am not suggesting that it become a fluffy non-profit. The implementation and business practices of enacting this paywall is where Flotrack really missed the target. First, let’s examine the demographics of who is consuming this content of Flotrack. It is mainly high school and collegiate runners who are interested in learning more about the sport they participate in. These target market does not have an excess of cash to spend on a premium video content service, especially struggling college students. Flotrack offers two subscriptions: 20 dollars per month or 150 dollars per year (which is billed annually). This is where the value proposition comes into play. Comparing Flotrack to other video subscription sites that are protected by a paywall shows a substantial gap in quality and quantity of content provided. Both Netflix and Hulu charge only 8 dollars per month for their premium services. Simply put, Flotrack does not provide over 100 percent of the value that Netflix and Hulu both provide, that is simply ridiculous to state. Also, one could argue that almost all of Flotrack’s video is shot, directed, produced, edited, etc by Flotrack, which drives costs up, whereas Netflix and Hulu simply aggregate and license content. Another ridiculous argument for many reasons. First, Netflix has developed several original series such as Orange is the New Black, House of Cards, and the reboot of Arrested Development. Also, the license agreements for the massive amount of content that Netflix and Hulu provide is not a small expense. Netflix paid 1.3 Billion in licensing fees in just the first quarter of 2013. Yes, billion with a B. Netflix is attempting to vertically integrate to cut down these exorbitant licensing costs. The value provided by Flotrack compared to Netflix is not even close.
The way that Flotrack has run their premium model has not maximized profit and left some serious questions about their customer service. Lets set up this example that has almost assuredly happened many times to potential customers for Flotrack. I am a passionate mom who loves to watch my little kid run in his races. However, his race is in California and I live in New York. Pretty tough to go out and watch him, right? Well thanks to Flotrack, there is a great live stream of the race so I can sit in the comfort of my home and watch my son run. However, because Flotrack often negotiates exclusive deals with these meets, the only way to watch him run is through Flotrack Pro. Understandably, the costs to live stream long track meets are probably substantial and I totally get why Flotrack would expect people to pay for this content. Here is the kicker, there is no option to purchase the live stream as a standalone product. This mom will have to either purchase the 20 dollar monthly plan or 150 dollar yearly plan. Many people are not going to lock themselves into a month or year contract for something they are really only going to use for a couple hours. Why can’t Flotrack charge 5 dollars per viewer for the meet? The fact that Flotrack has not implemented this absolutely baffles me. They are losing out on profits as well, from parents and others that would purchase the live streaming meet as a standalone product.
Flotrack has a long way to go before they can truly demand 20 dollars per month from a value perspective. I think that the initiative that Flotrack took to create premium content for the running community was a good one, however, it has been executed upon poorly. Opening up the product to standalone videos live streaming meets could increase profitability and seems like a no-brainer. I hope that Flotrack can correct the problems with their premium service, so that they can further advance their original mission of bringing track back.
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