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NFL to Stream A Game is a Big Deal

The National Football League is going to stream a football game next season. On face this may seem more like an experiment as the game will originate in the UK as part of the NFL's global marketing effort. But OTT delivery of sports content will mean much, much more to the league and the broadcasting world which is why new startups like client, YIPTV are poised and well positioned for a new era of how sports is broadcast.

That's why I think there's more to this, a point that is called out in the Wall Street Journal story. The "more to it" deals with the NFL looking to emulate what Major League Baseball is already doing with with their app based delivery, and really what is being done by the WWF (World Wrestling Federation) which took less money from USA Networks for the broadcast rights in exchange for creating their own WWF Network.

Already more content is being produced and viewed, plus the control of the entire telecast that the WWF produces is not regulated by the USA Networks Standards and Practices. It also means that all sponsorship and ad revenue, after selling expenses, remains with the WWF.

For the NFL and their current broadcasting partners (the networks like Direct TV, NBC, CBS, ABC/ESPN, TNT) this is a big deal because sports ad revenues and sports related advertising represents a proven advertising delivery method to reach the adult male audience. At the same time, a web or app OTT streamed telecast, completely owned and managed by the NFL means they get to keep the ad revenue vs. get paid for the games rights by one of their partners and that's where it gets very interesting.

The NFL will then know exactly who is watching the game. You may need to log in, or you may have to register the app. There will be a cookie dropped on your laptop or smart device in the browser. This means targeting advertising can be delivered to you as it becomes very easy to drop a commercial into the stream just for you vs the same commercial that's seen by everyone watching a game on television where localization is more difficult beyond the local market area vs. the national television spot.

Then there's the interactivity that you don't have with over the air or cable, which the webcasting provides. Imagine you're the ad manager for State Farm Insurance and you spend millions a year buying commercials with the NFL but you don't easily know which new customers came in as a result. Add a link, have a prospect trigger a call back from their LOCAL agent, and not only will the ad manager know which ad did what, they will know what the outcome was (call, followup, insurance policy written) and then be able to allocate the costs and the revenue to the specific commercial.

With analytics the ad manager will be able to determine which commercial spot works best with which demographic audience. The ad manager will also be able to determine which agents closed the highest percentage of leads that were delivered. With things like call recording the ad manager can then listen to the actual sales calls and analyze the selling technique, language used that led to a successful or failed close. And due to analytics, the entire process using CRM technology means from impression to closing can be tracked for ad delivery effectiveness.

This also has implications to the local teams in the NFL markets.

Right now broadcast revenues are divided evenly between each franchise, but as revenue begins to be tracked for everything sold via the NFL that happens on the Internet, the ability to assign actual revenue creation by franchise area creates a whole new model that doesn't currently exist.

Who wins? Who Loses?

The NFL and the franchise owners will be big winners over time. The more the league's NFL Properties division can control, the less money that will go to the rights holders. The more the NFL can sell in merchandise for their licensees without having to go through a retailer, means greater margins for both the league and the brands selling things like jerseys and caps for starters.

Thus while Apple, Google, Yahoo and Microsoft are likely thought of as the next bidders for rights, you can't rule out Amazon either. As a matter of fact Amazon with their delivery and logistics operations could end up being the ideal partner for the NFL.

Amazon with FIRE could deliver the content easily. With FRESH the customers could order in advance their Sunday Tailgate at Home Food package. With same day delivery or next day delivery Amazon customers could order replica uniforms, caps, program books, highlight reels, etc. And because all of this is analytics based, the ability to predict and produce changes the paradigm of everything from production to delivery, thus making Amazon a significant potential partner for the NFL.

For current Internet related companies that have skin in the game like Verizon Wireless and Comcast/NBC/Universal, there has to be a lot of wonderment. Clearly they both win on the data side, but in the case of NBC, they'll lose on the ad sales side but I suspect they, being in the position they will be in, will find a way to create a sales consortium with other cable operators and the likes of Google to develop new sales and delivery traffic reporting models to insure they still make their 15 percent.

So, while this may be just one game, don't be deceived. It's a big deal and one that will be looked at as truly game changing.

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