Author(s): Raghu Gopal
On Monday, Verizon and the US National Football League (NFL) announced a mobile streaming agreement through 2022 that will give fans of the sport several options beyond traditional TV for watching NFL games. The expanded streaming deal is expected to be in place in January 2018, in time for the championship play-off matches.
NFL commissioner Roger Goodell claimed the league was thrilled to get more deeply involved with digital distribution. He commented, "Live NFL action directly on your mobile device — regardless of carrier — will give millions of fans additional ways to follow their favorite sport".
Verizon mobile subscribers have been able to stream NFL matches for free through a dedicated app since 2010. However, this new deal, valued at more than $2 billion, gives Verizon the rights to show games on its range of digital assets, including Yahoo Sports, Complex and go90 — a great opportunity to attract people to these services and seek new sources of revenue. But this means that the content will also become available to subscribers of other carriers. Even mobile customers from rivals such as AT&T, Sprint and T-Mobile US will be able to watch the games on Verizon-owned apps or Web sites.
The NFL has TV deals with US networks CBS, NBC, ESPN and Fo, which currently pay close to $5 billion a year for the rights to broadcast those games. However, as TV audiences get smaller, the league needs to target younger viewers to make up for the shortfall. In an effort to maintain its relevance, the NFL also has partnerships with Amazon, Twitter and Yahoo. Its new pact with Verizon shows its intention to further broaden its reach and clearly underlines the value of live sports rights. It's one of the few genres still driving live TV viewership and people are willing to pay a premium to have access to it./p>
For Verizon, the move highlights its intentions in the media and content space at a time when competing carriers are either looking to acquire content, a strategy AT&T is pursuing with Time Warner (and previously with DirecTV), or to bundle content, as T-Mobile is doing with Netflix and Sprint with Hulu.
During the past few years Verizon has been buying some well-known, but not necessarily cutting-edge digital media assets. This includes spending almost $10 billion to buy AOL and Yahoo, a sign of the carrier's growing ambition to become a digital media powerhouse. The company has its sights on billions of advertising dollars to make up for falling wireless service revenue. Given the rapidly changing landscape, we believe Verizon will go one step further and acquire Dish Network (see CCS Insight Predictions for 2018 and Beyond).