Deeper Dive—Could the NFL’s streaming blitz impact vMVPDs?

Free streaming of NFL games is hitting new levels this season. (Pixabay/NFL)

The NFL is still the premiere live event on television but its ratings have been slipping. The league is trying to course correct by going all in on mobile streaming, which could cost the still-emerging virtual MVPD market.

The streaming floodgates for the NFL burst open last December when Verizon ended its exclusive mobile rights deal with the league. The NFL then signed new expanded mobile streaming deals with its broadcast partners CBS, ESPN, FOX and NBC.

Fox’s deal was part of its new agreement for NFL Thursday Night Football, which includes streaming to smartphones. Many of those same Thursday night games will be streaming on Amazon after the company signed a two-year deal for digital streaming rights.

All the in-market and national games from all the broadcast partners will be available for free to wireless customers through the NFL Mobile or Yahoo Sports apps.

The deluge of online options for watching the NFL comes in response to ratings declines in 2016 and 2017. According to MoffettNathanson analyst Michael Nathanson, 2017 regular season ratings were down 13% and the playoffs are down between 12% and 20%. He diagnosed the NFL as experiencing symptoms of a “structural decline.”

More free ways to view the game could help. To be clear, many NFL games were already free to viewers willing to buy a TV antenna and position it just right to get good signal reception. But free streaming could attract even more viewers.

However, free NFL streaming could end up cannibalizing vMVPD subscribers. According to Strategy Analytics, the vMVPD market in the U.S. grew subscriber numbers by 119.3% year-over-year, bringing the overall total more than 6.7 million.

Consumers who have picked streaming TV services—either as a first option or as a replacement for more expensive traditional cable or satellite—did so for access to live television. For many, the most sought-after live television is sports. And for live sports fans, the NFL is still the one, warts and all.

But Alan Wolk, co-founder and lead analyst at the consulting firm TV[R]EV, doesn’t see it that way.

“I think most people use streaming as a fallback,” Wolk said, referring to cases when fans are somewhere they can’t watch games on a TV. “I don’t think it’s ever going to be anyone’s primary way of watching.”

Wolk said that most people would rather go to a sports bar and that streaming NFL games—which are long and would eat a lot of wireless data—is always going to be the backup plan.

He also agreed that Verizon likely wouldn’t have given up the mobile streaming exclusive for NFL games if it was extremely valuable to its business.

Michael Greeson, president and co-founder of research firm The Diffusion Group, said that vMVPDs can probably rest assured knowing they have a screen size advantage.

“I don’t think it will hurt vMVPD growth or accelerate cord cutting…as long as it never gets to the TV. As it stands, it’s just for smartphones and is intended specifically to target young cord cutters/nevers that watch a lot of video on their smartphones. This gives the NFL a way to reach those consumers, at least in theory. It’s all just a test to see if mobile can in fact deliver this high-value audience,” Greeson said.

 “And I honestly don’t see this making it to the TV anytime soon, as it would undermine a wide variety of carriage agreements.”