{"id":3357,"date":"2017-02-02T16:22:59","date_gmt":"2017-02-02T21:22:59","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/"},"modified":"2017-02-02T16:22:59","modified_gmt":"2017-02-02T21:22:59","slug":"could-the-rise-of-digital-media-spell-doom-for-the-nfl","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/","title":{"rendered":"Could the Rise of Digital Media Spell Doom for the NFL?"},"content":{"rendered":"

On-demand streaming services (such as Netflix, Hulu, and Amazon Prime Video) and media fragmentation may be claiming a new victim, and a massive one at that: the multi-billion-dollar National Football League.<\/p>\n

 <\/p>\n

The Most Dominant Professional Sports League<\/strong><\/p>\n

As the largest and most profitable professional sports league in the world (by a wide margin), the NFL raked in more than $13B in revenue in 2016 (Major League Baseball\u00a0and the English Premier League\u00a0came in second and third, with $9.5B and $5.3B, respectively) (1). The vast majority of that revenue comes from TV deals with various networks. In turn, the value of those deals is driven by the astronomical ad dollars TV networks stand to make from broadcasting NFL games.<\/p>\n

 <\/p>\n

Trouble Brewing<\/strong><\/p>\n

While the NFL has been historically (relatively) immune to the negative viewership trends affecting cable networks, 2016 started telling a different story. Overall, NFL TV viewership fell by 8% in 2016, the largest\u00a0decline in 10 years (2). A more detailed look (Figure 1) shows viewership declining steadily over the past 3 years, across most adult age groups.<\/p>\n

\"\"<\/a>
NFL viewership decline across various age groups (3)<\/figcaption><\/figure>\n

The NFL\u2019s brain trust has directed\u00a0its blame at the recent Presidential election, and the 24-hour news coverage it received. That is a reasonable (though inadequate) defense\u2014NFL TV ratings have shown signs of recovery post-election (4). Yet, even since November 8th<\/sup>, TV viewership is still down compared to 2015. Sports and other pundits have come up with a slew of other explanations, including increased awareness of the NFL\u2019s concussion and safety issues, an increase in incidents of domestic violence among NFL players, national anthem protests, declining star point, and declining level of play. While any of these factors could be playing a role, data points to another familiar suspect: video on-demand services.<\/p>\n

 <\/p>\n

Usual Suspects: Netflix and Co.?<\/strong><\/p>\n

We\u2019ve all heard the story: millennials are cutting cords and moving away from traditional TV. The data is staggering; all age groups between 18 and 49 have shown a significant decline in time spent watching traditional TV since 2010, with the 18-24 age group being the most extreme, at -42% (Figure 2) (5).<\/p>\n

Data goes on to establish a more direct link between the emergence of streaming video on-demand services (SVOD) and the decline in NFL viewership. A recent UBS report shows that NFL TV viewership has declined the most amongst SVOD subscribers (Figure 3). The appeal of SVOD services (over the NFL) could be attributed to a multitude of factors, including lack of ads, and the flexibility it affords customers to consume content at any time and at any place.<\/p>\n

\"\"<\/a>
Figure 2: Decline in TV viewership among various age groups (5)<\/figcaption><\/figure>\n

 <\/p>\n

 <\/p>\n

\"\"<\/a>
Figure 3: Decline in NFL viewership vs. SVOD (6)<\/figcaption><\/figure>\n

 <\/p>\n

Keeping Up with a Changing World<\/strong><\/p>\n

Despite its immense popularity, the NFL realizes the need to adjust its value proposition and value capture models to keep up with changing consumer habits.<\/p>\n

Back in 2008, the NFL debuted an internet TV service, NFL Game Pass, for users outside the United States. Aside from the ability to watch NFL games live from abroad, NFL Game Pass offers subscribers creative and attractive features, including the ability to watch and replay every game, replay condensed games (shrinking the average game to ~45 minutes, removing\u00a0commercials, and time elapsed in between snaps), watch plays from various camera angels, and listen to local broadcasts. This service, however, is not available yet for live consumption in the United States due to existing contracts with Fox, NBC, ESPN, and CBS who air NFL games live.<\/p>\n

Taking this experiment into the United States is likely to carry major risks. As explained above, the NFL\u2019s current TV business model (which contributes most of the revenue) entails signing multiyear contracts with major TV networks, who in turn collect advertising dollars. Airing games through its own internet TV service would require the NFL to assume all the ad revenue risk, without the benefit of pricy long-term contracts with deep-pocketed networks. And aside from the financial risk, such an experiment is at least a few years away, as the NFL signed 9-year contracts with Fox, CBS, and NBC beginning in 2014 (7).<\/p>\n

There has also been rumors that the NFL could\u00a0license games to SVOD services, such as Netflix (although Netflix has not shown public interest in such a partnership yet). While these ideas may seem exciting and promising, they represent a stark pivot away from the traditional business model that has worked so successfully for the NFL in the past. Is the age of huge primetime viewership and 70+ ads per game over?<\/p>\n

 <\/p>\n

Sources:<\/strong><\/p>\n

    \n
  1. http:\/\/www.marketwatch.com\/story\/the-nfl-made-13-billion-last-season-see-how-it-stacks-up-against-other-leagues-2016-07-01<\/a><\/li>\n
  2. http:\/\/nypost.com\/2017\/01\/23\/nfl-tv-viewership-fumbles-for-the-first-time-in-4-years\/<\/a><\/li>\n
  3. http:\/\/awfulannouncing.com\/2016\/the-nfls-ratings-are-down-but-just-who-exactly-isnt-watching-anymore.html<\/a><\/li>\n
  4. https:\/\/www.wsj.com\/articles\/nfl-ratings-declines-ease-after-election-1483655875<\/a><\/li>\n
  5. https:\/\/www.theatlantic.com\/business\/archive\/2016\/10\/nfl-ratings-just-fell-off-a-cliff-why\/503666\/<\/a><\/li>\n
  6. https:\/\/www.aol.com\/article\/finance\/2017\/01\/12\/the-rise-of-netflix-could-hurt-the-nfl\/21653912\/<\/a><\/li>\n
  7. http:\/\/www.foxbusiness.com\/features\/2015\/07\/21\/tv-deals-boost-nfl-revenue-to-new-record.html<\/a><\/li>\n
  8. http:\/\/www.businessinsider.com\/how-netflix-could-hurt-the-nfl-2017-1<\/a><\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    Streaming video on-demand services may be claiming a new victim, and a massive one at that: the multi-billion-dollar National Football League.<\/p>\n","protected":false},"author":1266,"featured_media":3358,"comment_status":"open","ping_status":"closed","template":"","categories":[76,1081,102,90,358,91,653,144,59,55],"class_list":["post-3357","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-digital","category-digital-innovation-and-transformation","category-loser","category-netflix","category-nfl","category-on-demand","category-sports","category-sports-viewership","category-streaming","category-tv"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/digital-winners-losers\/","yoast_head":"\nCould the Rise of Digital Media Spell Doom for the NFL? - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Could the Rise of Digital Media Spell Doom for the NFL? - Digital Innovation and Transformation\" \/>\n<meta property=\"og:description\" content=\"Streaming video on-demand services may be claiming a new victim, and a massive one at that: the multi-billion-dollar National Football League.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/\" \/>\n<meta property=\"og:site_name\" content=\"Digital Innovation and Transformation\" \/>\n<meta property=\"og:image\" content=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Google-NFL-Field.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"585\" \/>\n\t<meta property=\"og:image:height\" content=\"363\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/\",\"name\":\"Could the Rise of Digital Media Spell Doom for the NFL? - Digital Innovation and Transformation\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2017\\\/02\\\/Google-NFL-Field.jpg\",\"datePublished\":\"2017-02-02T21:22:59+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/#primaryimage\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2017\\\/02\\\/Google-NFL-Field.jpg\",\"contentUrl\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/wp-content\\\/uploads\\\/sites\\\/2\\\/2017\\\/02\\\/Google-NFL-Field.jpg\",\"width\":585,\"height\":363},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Submissions\",\"item\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/submission\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Could the Rise of Digital Media Spell Doom for the NFL?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/#website\",\"url\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/\",\"name\":\"Digital Innovation and Transformation\",\"description\":\"MBA Student Perspectives\",\"potentialAction\":[{\"@type\":\"性视界Action\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/d3.harvard.edu\\\/platform-digit\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Could the Rise of Digital Media Spell Doom for the NFL? - Digital Innovation and Transformation","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/","og_locale":"en_US","og_type":"article","og_title":"Could the Rise of Digital Media Spell Doom for the NFL? - Digital Innovation and Transformation","og_description":"Streaming video on-demand services may be claiming a new victim, and a massive one at that: the multi-billion-dollar National Football League.","og_url":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/","og_site_name":"Digital Innovation and Transformation","og_image":[{"width":585,"height":363,"url":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Google-NFL-Field.jpg","type":"image\/jpeg"}],"twitter_card":"summary_large_image","twitter_misc":{"Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/","url":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/","name":"Could the Rise of Digital Media Spell Doom for the NFL? - Digital Innovation and Transformation","isPartOf":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/#website"},"primaryImageOfPage":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/#primaryimage"},"image":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/#primaryimage"},"thumbnailUrl":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Google-NFL-Field.jpg","datePublished":"2017-02-02T21:22:59+00:00","breadcrumb":{"@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/#primaryimage","url":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Google-NFL-Field.jpg","contentUrl":"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2017\/02\/Google-NFL-Field.jpg","width":585,"height":363},{"@type":"BreadcrumbList","@id":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/could-the-rise-of-digital-media-spell-doom-for-the-nfl\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/d3.harvard.edu\/platform-digit\/"},{"@type":"ListItem","position":2,"name":"Submissions","item":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/"},{"@type":"ListItem","position":3,"name":"Could the Rise of Digital Media Spell Doom for the NFL?"}]},{"@type":"WebSite","@id":"https:\/\/d3.harvard.edu\/platform-digit\/#website","url":"https:\/\/d3.harvard.edu\/platform-digit\/","name":"Digital Innovation and Transformation","description":"MBA Student Perspectives","potentialAction":[{"@type":"性视界Action","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/d3.harvard.edu\/platform-digit\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/hck-submission\/3357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/hck-submission"}],"about":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/types\/hck-submission"}],"author":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/users\/1266"}],"replies":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/comments?post=3357"}],"version-history":[{"count":0,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/hck-submission\/3357\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/media\/3358"}],"wp:attachment":[{"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/media?parent=3357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/d3.harvard.edu\/platform-digit\/wp-json\/wp\/v2\/categories?post=3357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}