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For many Americans, live sports are the last piece of television content that is appointment viewing. And for many Americans, the only thing of value on television is the NFL. The fact that fans want to watch sports live, along with the sheer number of viewers of NFL games, makes live streaming of sports content vital to the future of online video.
As most sports fans know, live sports are rarely available online without a cable subscription – Major League Baseball’s MLB.com has long been the exception. That’s why this spring’s launch of Dish Network’s SlingTV was so important. It allowed fans to cut the cord and watch games on ESPN (other than Monday Night Football) over their broadband connection without paying for cable.
However, other developments could soon match the importance of SlingTV to online video. Last month, Yahoo announced it will be streaming the first free, live global webcast of a regular season NFL game. Yahoo is believed to have paid at least $20 million to acquire the worldwide streaming rights for the October 25th game featuring the Jacksonville Jaguars and Buffalo Bills from London’s Wembley Stadium. The news is a potentially huge development in the world of over-the-top (“OTT”) content distribution and could signal a sea change in how Americans view live sports and other must-have programming.
The dearth of non-cable dependent streaming options for live sports is what makes the Yahoo/NFL collaboration so notable. Notwithstanding its foot dragging on an outdated blackout policy, the NFL has a long-established innovative streak in its approach to content distribution – moving games into prime time in 1970 with Monday Night Football and onto cable with Sunday night games on ESPN in 1987. Just as those moves were a harbinger of the rise of sports in prime time and the migration of televised sports to cable, the NFL’s experiment in online streaming could foreshadow a new universe of live sports content on the web, benefiting consumers with more choices on new platforms and diversifying and enhancing revenue streams for leagues.
Some studies show that 10 million U.S. households are broadband-only and don’t subscribe to cable television, driving the proliferation of OTT offerings. These offerings should only increase, with estimates putting the number of broadband-only households at over 17 million by 2017. By experimenting with Internet-only distribution for a regular season game, the NFL is conducting a real time trial on whether these cord cutters will watch NFL games online and whether broadband networks can handle the spike in traffic NFL-sized audiences will create.
If all goes well, the NFL could decide that selling the rights to an OTT provider to stream games and other NFL content—or doing it itself (like it previously did with Thursday night games on NFL Network)—is good business and would add to the league’s current $6 billion per year in television broadcast rights revenue – something that could help the league reach its target of increasing revenue from $10 billion to $25 billion per year by 2027.
In 2014, NFL games on broadcast television averaged 17.6 million viewers. Over 200 million Americans watched some portion of an NFL game in 2014 and 45 of the 50 most watched TV shows in Fall 2014 were NFL games. If even a fraction of those viewers watched games over a live stream, it could be a game changer for the entire OTT ecosystem.
Earlier this month, the Washington Post reported that Game 4 of the NBA Finals generated 744,500 unique viewers on WatchESPN – a record number and up 128% from 2014. The numbers the NFL could attract are significantly greater, and the viewership numbers would climb ever higher if games aren’t behind a cable pay wall. These viewership numbers should signal to potential OTT providers that the market is ripe for streaming video to finally challenge cable.
If the NFL again takes on the role of content distribution innovator, it could lay the groundwork for an entire sea change in the way Americans consume all types of entertainment and video content. To meet the needs of NFL-sized audiences, network capacity will have to improve, customer service will be required to be more responsive to fix outages, and bandwidth caps will give way – all setting the stage for even more robust OTT video services. (There’s a reason why a company rooted in sports streaming—MLB Advanced Media—is probably the leading streaming technology company.) As a result, Americans could have more choices (which is exactly what sports fans want) – leading to lower prices – and content creators will have more distribution options. All that it takes is realizing that the Internet is not just where the audience is—it’s where there’s money to be made, as well.
Image credit: Wikimedia Commons user Patriarca12