Commentary

Verizon's NFL Deal And Sports Streaming's Next Step

Verizon’s $2 billion NFL mobile rights deal marks a major change in the streaming sports landscape. 

Verizon has long paid handsomely for exclusive mobile rights to NFL games, but the newest arrangements signals a shift in strategy. While previous deals restricted mobile NFL viewing to Verizon customers, now anyone on any network can watch the games, provided they do so on a Verizon-owned platform like go90, or Oath properties like Yahoo Sports.

While the NFL’s TV rights are still held by companies like CBS, NBC and ESPN, Verizon is betting that millennials will forgo the TV set to watch on their phones.

“If it is ad-supported, free, and live, you cant fast-forward it anyway,” said independent media consultant Brad Adgate, who previously held senior roles at Comcast Spotlight and Horizon Media. “If you can sell the ads and make it free to the subscribers, that model has worked brilliantly in television for 70 years.”

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Verizon’s deal suggests a larger question that sports leagues and the companies that televise their games are still trying to answer: Exactly how many young people are watching games, and on what platforms?

Last week, ESPN released research from Nielsen that examined millennial viewership of its out-of-home (OOH) channels. The research showed that when OOH viewership was factored in, ratings for ESPN’s live programming among millennials rose 23% in total day and 28% in prime time.

Those figures suggest that there is significant, under-measured viewership for live sports.

That potential also aggravates problems with counting viewers who aren’t watching a linear TV feed. Last week Nielsen acknowledged delays in measuring live sports games streamed to TV sets through connected devices like Roku or Apple TV.

Given the advertising revenue at stake, those delays can be expensive.

“It has to progress because advertisers are demanding it, and because content providers are even more demanding. It is is revenue for them,” Adgate said. “The silver lining is that at least you have two companies in this space, comScore and Nielsen, and that creates innovation and competition, [which] brings about negotiation in pricing.”

While the NFL’s TV deals are already locked in well into the 2020s, Amazon’s deal to stream “Thursday Night Football” games and Verizon’s massive mobile deal may highlight what the next round of rights bidding looks like. 

The media companies that have televised NFL games for more than half a century will find themselves bidding against telecom giants with a national footprint, and against tech companies flush with cash. All will be eyeing millennials, many of whom will have cut the cord, if they even subscribed to a big cable bundle to begin with. 

Assuming there is an accurate and trustworthy third party able to measure viewership across mobile and streaming services, sports rights may keep getting more and more expensive for companies looking to broadcast them, even as the audience splinters into groups choosing to watch on the device and service of their choice.

 
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