NFL Streaming Service seems to be a game of value and exploitation – Sportico.com
The NFL plans to introduce a stand-alone streaming service in July, called the NFL Plus, that will allow subscribers to watch live games, available within their designated broadcast area, on a cell phone or tablet, according to recent reports. But with so many fans already getting this functionality through the cable, satellite or live streaming provider, it is not clear how much demand there will be for this subscription OTT service.
John Skipper – former ESPN president, former chairman of DAZN and co-founder of Meadowlark Media – said the existence of a league-owned streaming platform would be useful in both ongoing and future negotiations on broadcasting rights, and that the NFL is unlikely to be overly concerned about the number of subscriptions. . (NFL officials declined to comment on this story.) NFL Plus could help raise the price of the NFL Sunday Ticket, as the current deal expires after the 2022 season, and will let existing and hopeful media partners know. “If you do not give us a big check for [a specific rights package come 2034]we’ll just go and do it ourselves, ”Skipper explained.
JWS ‘assessment: Yahoo Sports delivered in-market games for laptops and tablets for free last season, while various mobile providers delivered live gaming action to mobile phones. But those agreements have expired. Instead of increasing the deals again, the league will take back ownership of the rights, collect them under the NFL Plus banner (probably along with some extra content) and sell it to fans as a new digital service.
It is not known how much revenue the league leaves on the table to stand up with its own streaming service. But given the historical precedent, it seems highly unlikely that the number is significant, and media rights consultant Patrick Crakes agreed. He added that the value proposition associated with the rights the NFL collects under the NFL Plus umbrella has changed over time. They were originally cut out to take advantage of new platforms or to act as a bolt-on to an existing package. “Nobody wants these rights anymore,” he said, at least not at the price the league wants.
The NFL is unlikely to generate more revenue from the NFL Plus in 2022 than it earned from the rights in ’21. “[There isn’t] regardless [the streaming service could] replace the economy to what the pieces used to do separately, “Crakes said.
But as Skipper said, the NFL’s direct-to-consumer push is likely motivated by the desire to create value and leverage – not short-term revenue. There has been talk of the league selling a stake in NFL Media (including: NFL Network, NFL.com and NFL RedZone) or NFL Films as part of a package deal with NFL Sunday Ticket rights. In theory, the existence of the NFL Plus enables the league to offer potential bidders for the out-of-market package the rights to stream games in the market on tablets and mobile devices as well. Apple and Amazon are believed to be the favorites to get the digital rights to the Sunday Ticket.
Can the Sunday Ticket end up in a package with the NFL Plus? While a combined offer will undoubtedly make the NFL Plus more attractive to consumers, the prospect of the Sunday Ticket ending up on the platform remains an unlikely outcome. “If they put the Sunday Ticket in there, they would walk away [more than] $ 2 billion in revenue, Crakes said. NFL owners tend not to walk away when the bird is in hand.
In the longer term, the existence of a league-owned streaming platform should help ensure that broadcasting rights continue to climb. If the strategy sounds familiar, it’s because the league has used it before, Skipper said. The NFL has used the NFL Network as “an insurance policy, a backup [plan] and perhaps even an implied threat [its] media partners ”over the last decade and a half. If the league did not get what it was looking for for a specific rights package, it always had the option to place the games on the cable channel. The NFL signed rights agreements worth a total of $ 100 billion north in 2021.
Of course, the NFL has also been looking to “get out of the NFL Network for a long time now,” Crakes said. So the decision to launch and run a digital network seems to be against that agenda.
The NFL is not the first rights owner to announce plans for a streaming service; FIFA intends to do the same. But unlike the professional football league, it seems that football’s governing body is motivated by the volume of content it owns (and largely does not make money on). FIFA + will show 40,000 live games a year across 100 member associations.
Sport is a copy industry, so it seems safe to assume that other leagues and leagues will see the NFL and FIFA introduce streaming services and look to follow suit. But it is difficult to imagine any sports property that makes the economy work with the only available live games that are currently excluded from the pay-TV package (remember that it is a costly effort to get up with a streaming service). And no leagues are going to move away from traditional TV revenue at this point.
Crakes said none of the professional leagues would “make a lot of money” with a streaming service. But that should not stop them. The media landscape is changing, and although they do not have the volume of rights to provide genuine D2C services today, they can do so in the future. “It makes sense for leagues to do what they can [now] and so [the infrastructure] will be there when the opportunity arises, he added.
MLB is considering introducing an OTT service for live in-market games, which does not require a cable subscription (MLB.tv has been streaming out-of-market games since ’02), in an effort to help expand the game’s reach . The league acknowledges that the RSNs do not fully penetrate their markets and want to give local fans more access to their favorite teams’ games. It is not clear how the league will get the rights from the teams for these matches.
While some believe the NFL Plus is the NFL’s latest attempt to better understand fans, we have our doubts. At least in principle, it is unlikely that the service will attract enough subscribers to serve as a meaningful source of fandata.