Last football season marked the
first time the NFL sold the rights to stream an entire game for free
over the top. The buyer was Yahoo
(YHOO),
the game was played in London, and the grand experiment generally went
off without a hitch, though some debated the level of success in the
aftermath of the stream. Yahoo, parent company of Yahoo Finance, said
15.2 million people tuned in to the stream at least once, and that an
average 2.35 million people were watching at any moment.
Now the
NFL has decided that one good turn deserves another, or many more: The
league is selling streaming rights to its Thursday Night Football (TNF)
games as an additional digital package, separate from the TV deals it
announced in February. (On TV, CBS will show five of the TNF games, NBC
will show five, and NFL Network will show eight.) The NFL has also said
it will sell streaming rights to all three of next season's London
games. That's 21 games total. It will likely sell the Thursday Night
games as a separate package from the Sunday morning London games, but it
could give them all to a single provider if the price is right.
The process has prompted a slew of reports about various companies showing interest, from more traditional cable giants like
Verizon (VZ) to tech companies like Apple (AAPL), Google (GOOGL), and Amazon (AMZN). This month, Facebook (FB) reportedly jumped in as well. And this week, in an interview with Variety, VP of partnerships Dan Rose confirmed Facebook's interest.
Each
of the interested parties brings a different audience to the table, and
has a different reason why streaming NFL games would appeal to it. The
question now becomes which one will cough up the most for the rights.
All the NFL has said on the matter is this, in its
announcement
last month of the final Thursday Night Football deals: "The NFL is in
active discussions with prospective digital partners for OTT [
over-the-top] streaming rights to Thursday Night Football. A deal announcement is expected in the near future.”
Nothing
is stopping the NFL from having multiple streaming partners, just as it
has multiple cable partners. Sources tell Yahoo Finance that any
number of combinations is possible: The league could divvy up the TNF
games, selling some to one partner and some to another; it could sell
all the TNF games to one company but divide up the London games; it
could even add some of the rare Saturday games that happen late in the
season. Sources also say there are companies in talks with the NFL that
have not yet been named in the press—it's easy to imagine, say, ESPN
being in the mix, or Twitter, which has implemented a rash of new
features in the last year as Wall Street has pressured it to grow its
user base. The league can end up with any mix it likes.
In other
words, the NFL holds all the power in these negotiations. Live sports,
especially NFL games, are for many people the last remaining good reason
to pay for cable television. More than any other pro league, the NFL
has held off on offering any real digital-only options for fans, thanks
to the long-held relationships it has with broadcast partners. But it's
finally showing signs of flexibility on the digital front. Offering up
to 21 games over the top is a major step by the league, and streaming
those games would be a major coup for any digital platform. It's why
Yahoo reportedly spent somewhere between $17 million and $20 million for
just one game. Critics said it overpaid, but the NFL could likely score
nearly three times that amount for a package of the three London games.
The NFL had no comment for this story; Yahoo Finance also reached out
to all of the companies for comment.
Here's why paying up for the games makes sense for the interested players named so far.
FacebookIt
makes perfect sense for Facebook to jump into the NFL streaming race,
based on its recent product launches. Just before the Super Bowl,
Facebook launched Sports Stadium, a live sports chat feature that
targets Twitter's territory
and also indicates Facebook has an interest in being a sports hub.
Facebook has shown its ambition, lately, in becoming more of a place for
live content: It launched live video streaming, streamed a live show
with LeBron James, and has announced its intention to pay celebrities
for live streams. Showing NFL games would also presumably bring in new
advertisers eager to reach the eyeballs of cord-cutters. Facebook has an
advantage of being so big -- 1.5 billion people have Facebook and use
it each month -- that it wouldn't be asking viewers to to go to a site
they don't regularly use.
YahooIt's hard
to argue that Yahoo's stream last season of a Jacksonville
Jaguars-Buffalo Bills game from London wasn't a hit for the company. It
brought the brand to the fore again as the first to stream a game for
free. And while some criticized the web giant for setting the game to
auto-play on its homepage, 15.2 million people is 15.2 million people,
and in an interview with
Fortune
after the game, NFL executive Hans Schroeder said that "somebody had to
watch for 3 seconds before it triggers and counted. So if people came
on to the Yahoo homepage and were looking for a link or a news story,
chances are they didn’t count." It makes sense that Yahoo would want to
bid again to stream—it could take the lessons it learned the first time
and fix any bugs—but the package may end up being too expensive for the
company.
GoogleFor the same reasons
Yahoo would want the games, Google is an obvious possibility. The
company launched its YouTube Red service last year, which charges a fee
to access YouTube without ads. That might be the place for the NFL
livestream should Google pursue the deal. As of last year, Google gets
about 100 billion searches every month, so if it makes the livestream
available through its home page on game days, it would benefit from a
huge number of visitors who didn't come to the site for the game, but
might stick around for it.
AmazonAs the
retailer has seen success with its Prime subscription service and its
Original Series line, it's easy to picture CEO Jeff Bezos shelling out
for NFL games and then offering them only to Prime users to goose
subscriptions.
VerizonIt already has the
rights to NFL games on mobile—a Verizon customer can watch the
local-market game on a Verizon phone for free (though that deal expires
at the end of next season). So it makes sense that Verizon would
consider shelling out extra to stream games on the Web and on connected
devices, instead of just on cell phones. It would likely still limit the
stream to Verizon subscribers. Like Amazon, it could tout the games as a
selling point to get more cellular customers to switch over. And
Verizon's acquisition of AOL is another domino that shows the company's
interest in content investments.
CBSCBS has the TV rights to five TNF games next season. This month, CEO
Les Moonves said
that CBS is in talks to stream those games on its All Access app. CBS
already has the rights to stream its Sunday and Thursday games, but
not on All Access -- only on the Internet. Last year, it
exercised that right with seven games,
offering them for free online. Even if CBS does get to stream its five
TNF games on its All Access app, the NFL can still sell the right to
stream those same games to a digital partner like Google or Facebook.
AppleInitially,
Apple was reportedly interested in the deal—NFL games could bring many
more to its Apple TV service. But the latest reports suggest Apple is no
longer interested. Still, never say never: Netflix, too, has long
insisted that it doesn't plan to offer live content or sports, but as
the market for this content heats up, there is no technology company
that would definitively stay out of the fracas.