8/9/2013 9:19 AM
In one of the biggest indications that TV is changing as an industry, Verizon
has committed to paying $1 billion for rights to air NFL games over its customers' smartphones. Viewers' habits are causing a shift in where and how sports content will be viewed in the next few years, and we can all learn something from the NFL’s game plan on how to step ahead of the curve.
Here in the United States, we’re actually a bit behind other countries in relation to live television over mobile. Other parts of the world, and dozens of other providers serving to smartphones and cell phones, put much more emphasis on pushing out live TV as opposed to offering items as a download after the fact. The U.S. may be starting to catch up however. The Dyle
initiative, which is a consortium to provide branding on devices to signify they're capable of receiving live OTA TV signals, has made some progress, but not as much as everyone has hoped. Cable and satellite companies are creating their own apps, which stream dozens of live TV channels, but the catch is you must also be a subscriber to that service to watch.These steps are positive moves forward, but also are somewhat fragmented — Limiting you to a specific region or content or a specific provider of programming. Options such as Aereo
offer a bit more flexibility, live TV streaming to portable devices, but the company has got a long way to go to become truly mainstream in many larger markets, and doubts do crop up when the topic of scaling up to millions of viewers begin to be discussed.
The NFL has a plan, at least concerning sports coverage. Starting next year, Verizon will increase its already substantial coverage of live NFL games streamed to smartphones with a focus on Sunday afternoon games. Right now, Verizon shows games from Monday, Thursday and Sunday nights, but the biggest chunk of playtime is actually on Sunday afternoon, where a dozen or so games are played across the country. This is the day customers want, and this is the content that is the majority of this billion dollar deal. Verizon has a current four-year deal in place, set up in 2010 for $720 million. This new deal will bring the valued Sunday games, and Verizon Wireless has agreed to pay the NFL $1 billion over the course of the next four years. In addition to games, viewers on mobile devices will also be able to watch the league-owned channel NFL Network, the NFL RedZone show which collects and show scoring plays from the day's games, and most importantly, the Super Bowl, carried live right on their smartphone.
What is most telling of this deal is how the NFL is beginning to define its future, with a clear focus on mobile TV. Traditionally, sports organizations have given exclusivity to major cable, satellite and broadcast partners such as FOX, NBC Universal, News Corp, ESPN, Comcast, DirecTV, CBS and others. In recent years the ability to stream NFL content to portable video devices, except for smartphones, has been included in these partner deals. The only exception was that streaming could not take place to a phone device. The NFL smartly kept this option separate, opening up the door to negotiate a completely different deal, for the same content, with major phone providers. Verizon and the NFL came to terms a few years back, and this current deal only escalates the commitment.
The National Football League are also demonstrating a commitment to mobile TV on phones while also keeping the deal separate from broadcast. Their stats show no cannibalization from broadcast, meaning increases in mobile viewing are not showing a decrease in cable and satellite viewing as far as the NFL is concerned. And Verizon has a very key marketing advantage to sports fans, offering the best smartphone NFL package around.
All the news is not good though. Verizon and other companies such as AT&T have been working hard on moving customers from unlimited plans to data capped plans. So the more network bandwidth is used, such as LTE and 4G, the more the customer would need to pay. Football fans could easily burn through almost 400MB just watching one three-hour game. Multiple that times several weekly games and consumers could bump up against their limit, or have to move to the next largest tier. Customers could switch to Wi-Fi, but that negates the convenience of watching on mobile, or say watching the game on the road, in the back seat of a car or in a park.
Clearly some things have to be ironed out. And with some other providers now focused on marketing unlimited bandwidth, who knows, the pendulum could swing the other way, and unlimited bandwidth may be next year’s big selling point. Something the NFL would be quite happy with. In any case, the bigger news is that the NFL is focused on mobile TV now, and this new deal signifies a major commitment. A commitment to Verizon, a commitment to fans, but most importantly, a commitment to the changing face of television, and how we will be watching sports programming now, and into the future.