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Are You Ready for Some Streaming Football?

October 25, 2015, marked the first time an NFL game aired online but not on broadcast TV. When the Jaguars and Bills played in London’s Wembley Stadium, Yahoo was the only place for American fans to watch it. Was this just an experiment, or should we expect more of this in the future? There’s no reason it couldn’t happen. If a streaming broadcaster offered the NFL more money per game than a TV broadcaster — and was able to demonstrate it could make the game available to the same number of fans — why wouldn’t the NFL, or any other sports league, consider the offer? But forget the coulda, shoulda, wouldas. A better question is can it happen? And the first step to answering that question is to see how well this first game went. How was the quality? Reviews of the streaming quality are mixed and seem to depend largely on what kind of device people used to watch the game. People who viewed it on a computer using an Internet browser seem to have had a worse experience than those who watched it on a device specifically made for streaming, such as a Roku, iPad, or Apple TV. How many people watched? Yahoo’s stream averaged 2.36 million viewers per minute, which sounds like a lot until you learn that network-televised games typically average somewhere between 10 and 20 million viewers per minute. Granted, it’s not a perfect comparison: because Yahoo’s game took place in London, the kickoff time was 9:30 a.m. EDT, much earlier than usual for NFL games. In addition, both teams are relatively minor, with fair and poor records: the Bills entered the game 3–3, and the Jaguars 1–5. Was it a money-maker? Yahoo paid $20 million for the rights to stream this game — but is that a lot? This year, NBC paid the NFL $950 million for the rights to air 19 regular-season NFL games and two playoff games, as well as the rights to the Superbowl once every three years. The Superbowl and playoff games are worth much more than the regular-season games, but let’s pretend for a second they aren’t: this deal comes to over $44 million per game. Even if we assume the playoff games and one-third of a Superbowl are worth half the contract, NBC still paid more per game than Yahoo did. NBC is willing to pay so much because it can make a profit via advertising. This year, they’re charging an average of more than $665,000 for a 30-second commercial. Yahoo initially charged advertisers $200,000 for the same amount of air — or more accurately, stream — time. But lack of interest forced them to lower that rate to $50,000. It’s unlikely that they turned a profit, at least not based on advertising alone. Is this the future of watching sports? It may be years before we find out just how big an impact streaming will have on the NFL. Yahoo and other streaming providers won’t have a chance to bid on a significant chunk of games for some time: ESPN’s current contract will be the first to expire, but not until 2021, followed by the expiration of deals with CBS, Fox, and NBC in 2022. With those dates in mind, streaming broadcasters may look to other sports first, bidding on what they can, when they can, and improving their technology before the biggest contracts come up for renewal. Based on NBC’s current deal, any provider — TV or streaming — that wants to show a similar number of NFL games will probably have to pay more than $1 billion per year. Based on Yahoo’s results, it looks as if that might be too rich for streaming providers — for now. But after watching the success of streaming content providers like Netflix, you can bet the TV networks won’t take this potential new threat for granted when bidding time does come.

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