The Pellucid Perspective - May 2015 - (Page 2)

Golf course technoloGy Third party tee time space battles heat up NGCOA, PGA Tour to join the game, and will operators lose regardless? By stuart lindsay t he rumor mill was really active in April. And when we started looking into the rumors, we saw a lot of smoke. As facts became clear, we didn't find the mirrors that sometimes accompany technology announcements in golf, but instead are getting the urge to call the fire department. The issues below are adding fuel to the blaze. * NGCOA continues negotiations with GolfNow regarding a Third Party marketing solution. * PGA Tour is in "final phase" negotiations to partner with a well-known golf technology platform with a Third Party marketing site. * Club Prophet Systems shuts down interface with GolfNow We have been able to confirm that the two top NGCOA officials and a Board member visited GolfNow and are continuing to pursue a jointly developed Third Party solution. We have been aware of the PGA Tour's efforts to enter the Third Party marketing space for over a year and a well-placed source confirmed their current potential partner. Club Prophet Systems announced in April that it was cutting off GolfNow's interface to their users' tee sheets effective May 1. Taken together, these developments are prime examples of how difficult it is to create a "universal" platform that will help golf courses sell more rounds at prices that will increase their revenues. We also would emphasize that all the Third Party programs that have surfaced over the last decade have not resulted in golf courses selling more rounds - rounds played have declined 16% since 2005. There are good reasons for the NGCOA to keep talking to GolfNow and vice-versa - NGCOA members have been calling for a "best practices" Third Party solution for years. GolfNow needs access to additional inventory to grow. GolfNow has a "finite" number of profitable barter rounds available. The income that GolfNow gets from reservation fees for non-barter rounds is a very low percentage of their total revenues. So GolfNow needs to bring in additional courses or try to get additional barter inventory from their existing users. They are trying to do both, and a deal with the NGCOA might help. The real issue is how "best practices" fit into the equation in light of how profitable the sales of barter inventory is for GolfNow. The PGA Tour's interest in Third Party marketing is a little harder to understand. Obviously, they think that owning their own platform will create some synergy in boosting their TV ratings and drive eyeballs to their developing mobile content delivery programs. In addition, they have looked at the money GolfNow is making selling barter inventory and they may figure they can make some, too. 2 The Pellucid PersPecTive The biggest question for the PGA Tour is going to become whether that synergy will allow them to serve two masters. Is it possible to enthusiastically sell a Sunday afternoon tee time when you're trying to deliver TV ratings for the final round of the Player's Championship? You can talk about mobile delivery all you want, but I don't want to be playing with someone who delays trying to make his putt to see if Jordan Spieth makes his. On a basic business level, the PGA Tour would be going into competition with the Golf Channel in the Third Party space and as a technology provider to golf courses. This is either short-sighted or some indication that the PGA Tour has a longer term strategic plan to widen the sales opportunities for its content beyond their current relationships with the Golf Channel and other networks. While I certainly would bet on the latter, the potential for a few sparks is worthy of note. Then there is the action of Club Prophet Systems. They had over 200 of their clients using GolfNow and basically shut off GolfNow's access to their tee sheets. I have not talked to anyone at Club Prophet directly regarding this issue, but multiple sources have indicated that GolfNow was actively soliciting Club Prophet users to switch to GolfNow technology platforms. We also know that many Fore users had switched to Club Prophet after GolfNow acquired Fore in 2013, so maybe this is just another skirmish in an ongoing battle, but it does represent a good indicator of more sparks to come. Club Prophet's reaction is understandable. On the other hand, GolfNow is simply doing what everybody else does in the sales process in a stagnant market - try to steal other vendors' customers. And if the PGA Tour gets into the technology space, they will have to fight that battle, too. In the end, we wish it would boil down to whose technology provides the best solution, but that assumes a one size fits all platform is possible. We have watched many golf platforms try to become a universal solution with little success. There are a number of software choices out there for a reason. Some are definitely better than others and hopefully all will improve as they migrate to newer technology, but it is unlikely that one will dominate. This is especially true as the Third Party marketing providers such as GolfNow became technology providers and technology vendors became Third Party marketers to sell their barter inventory. Up to now, most everybody has viewed GolfNow as the elephant in the room. Now it looks like we're going to have two elephants in the room. After you get done thinking about how much fun it might be to watch the sparks fly, you'll eventually get around to wondering what it will mean. It will get even more interesting if the NGCOA picks one elephant over the other. May 2015

Table of Contents for the Digital Edition of The Pellucid Perspective - May 2015

Third party tee time space battles heat up
NGCOA draws flak on owners’ message board
GPS Industries, Club Car forge rare GPS success story
“Paces” of play a healthy alternative for golf?
Flying Tee aims to top Topgolf with debut facility
April golf weather impact: Put another month in the “plus” column
Denver: Profits not Rocky Mountain high, but better than most
ClubCorp reports outstanding first quarter results
The Players, on and off the course

The Pellucid Perspective - May 2015