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NFL (national football league) mobile device strategy
1.
2. NFL Audit
James Corne
Bob Edmiston
Geoff Kowalski
Jon Schultz
3. How does the NFL manage
its content portfolio?
• Goal: Quality Product to Maximum Audience
• Saturation, Breakeven, Allocation
• Content NOT Distribution?
12. How has it Worked?
• Value Map & Sources
• Silos & Exclusivity
• Competition
13. Media Timeline
1994
1959
Fox
lagging
in
raGngs,
CBS
picks
up
NFL
buy
rights
to
NFL
for
1.8
B.
1939
1987
2006
ESPN
is
a
nobody,
NBC
is
first
NFL
Network
Created
picks
up
NFL
network
to
pick
up
the
NFL
28. Internet TV changing the game?
• Revenue:
– Direct
or
Indirect
from
consumer?
• NFL
as
a
Distributor:
– Furthering
NFL
Network
and
NFL
RedZone
channels?
• GlobalizaTon:
– Channel
for
distribuTon?
• Engagement:
– How
important
is
fan
interacTon?
• Mobility:
– Greater
access
with
increasing
connecTvity?
• Other?
29. Current TV Market Pie
$8
Billion
Subscriber
Ad
$$
$$
NBC
DirecTV
CBS
$4
Billion
Ad
$$
ESPN
FOX
Ad
$$
Ad
$$
$3.4
B
Ad
Revenue
$600
M
Subscriber
30. Breakeven Revenues for the NFL
Current
TV
$
4
Billion
Internet
TV
Ad
Revenue?
ESPN
1
Network
1
1.9
ESPN
1.9
DirecTV
1.1
DirecTV
1.1
New
Revenue
Networks
get
approx.
$2.2
Billion
from
adverGsing
31. Key Numbers for Internet TV
• NFL
games
Reached…
– 207,700,000
unique
viewers
in
2010
in
the
U.S.
• On
average…
– 17.9
million
viewers
per
game
32. What would NFL charge to breakeven?
Viewership
100%
90%
75%
60%
45%
10%
Keep
Season
$
9.15
$
10.16
$
12.20
$
15.25
$
20.33
$
91.48
ESPN
A
la
carte
$
0.42
$
0.47
$
0.56
$
0.70
$
0.94
$
4.23
No
Season
$
14.44
$
16.05
$
19.26
$
24.07
$
32.10
$
144.44
ESPN
A
la
carte
$
0.63
$
0.70
$
0.84
$
1.05
$
1.39
$
6.28
*
DirecTV
is
charging
$350!
33. NFL Internet TV Pie Potential
Lower
Ticket
Prices
Ad
Rev.
equal
Cover
$1.9
with
Cover
$1.9B
$11.5
to
Networks
+
Subs.
+
Gain
Ad
$6.2
Billion
$4
Billion
lost
with
Ad
10%
Sequal
to
Rev
ubscribe
Billion
Rev.
at
$350
Networks
Increase
Intl
Exposure
34. What is stopping the NFL?
• Does
this
fit
the
goals
of
the
NFL?
– Not
currently
since
internet
connecTvity
is
only
at
77.3%
with
only
57%
having
high-‐speed
– While
99%
of
the
US
has
TV
access
– However
internet
is
trending
up
• Requires
the
NFL
to
become
a
distributor
– Experience
with
NFL
Network
and
NFL
RedZone
• NFL
would
have
to
interact
on
a
higher
level
with
fans
• NFL
does
not
know
how
this
channel
will
develop
– Goes
against
their
“Wait
&
See”
strategy
• Is
this
decision
reversible?
42. The
NFL
is
a
Content
Producer
$5M/year
$7/month
2.3Subs
$3B/yr rv $5/sub
Xbox IPTV
Opportunity
Cost
CompeGGon
43. Key
is
in
the
Strategy
and
Contracts
• Strategy:
Wait
&
See,
Silo
&
Exclusivity
– The
NFL
is
in
a
financial
posiTon
that
they
can
afford
to
wait
for
a
clear
winner(s)
to
emerge
before
signing
content
distribuTon
contracts
– Puts
the
NFL
in
a
great
posiTon
to
take
advantage
of
new
technology
as
it
becomes
established
while
minimizing
their
risks
and
profiTng
greatly
• Contracts:
Length
of
new
contracts
will
be
a
very
telling
signal
of
the
future
of
the
NFL
content
– Long
contracts:
Signal
that
the
NFL
wants
to
milk
the
cash
from
this
established
distribuTon
because
it
is
established
and
not
at
risk
of
disappearing
or
being
disrupted
greatly
– Short
contracts:
Signal
that
the
NFL
wants
to
potenTally
get
in
or
out
of
a
distribuTon
method
– What
kill
switches
are
included
on
behalf
of
the
NFL?
44. Contract
Lengths
and
End
Dates
• TV
Contracts:
– CBS,
FOX,
NBC,
and
ESPN
expire
in
2013
• Started
2006
– DirecTV
expires
in
2014
– ESPN
rumored
to
be
close
to
a
deal
to
lock
up
MNF
past
2020
–
but
hasn’t
happened
yet
• In
the
news
January
2011
• Wireless:
– Verizon
signed
a
4
year
deal
for
2010-‐2014
• Will
be
interesTng
to
see
who
gets
and
how
long
new
distribuTon
contracts
are
for?
– Depending
on
how
other
distribuTon
channels
advance
and
how
quickly
they
become
mainstream
could
affect
the
new
deals
of
the
TV
networks,
if
they
even
get
new
contracts.
45. TV
is
STll
Making
Money
Off
the
NFL
• Current
Profit:
– CBS:
$146
million
– FOX:
$107
million
– ESPN:
$83
million
– NBC:
$12
million
• However,
the
quesTon
is
will
this
last?
– Analysts
suggest
that
it
will
and
that
these
profits
will
actually
grow
as
well
–
but
analysts
have
been
wrong
before
• All
depends
on
companies
being
willing
to
spend
huge
$$$$$
on
adverTsements
46. Bring
Content
DistribuTon
In-‐House
• US
Pop:
307
million
• NFL
Revenue:
$9.4
billion
• Revenue
from
Networks:
approx.
$4
billion
• 2010
regular
season
reached
207.7
million
unique
viewers
• NFL
games
were
watched
by
an
average
of
17.9
million
viewers
• $3
billion/207.7
million
=
$14.44
• Leave
ESPN
the
most
profitable
contract
in
place
for
MNF
-‐
$1.1
billion
per
year
• $1.9
billion/
(207.7
million
–
17.9
million)
=
$10.01
52. How
the
NFL’s
Brand
Translates
to
Revenue
for
the
League
Thursday
Period AFC
Package NFC
Package Sunday
Night Monday
Night Total
Amount
Night
$420
million/
1982–1986 NBC CBS None ABC
yr
$473
million/
1987–1989 NBC CBS ESPN
(2nd
half) ABC
yr
TNT
(1st
half)
$900
million/
1990–1993 NBC CBS ABC
yr
ESPN
(2nd
half)
TNT
(1st
half)
Fox
($395
1994–1997 NBC ABC
$1.1
billion/yr
million/yr)
ESPN
(2nd
half)
CBS
($500
Fox
($550
ESPN
($600
ABC
($550
1998–2005 ESPN $2.2
billion/yr
million/yr) million/yr) million/yr) million/yr)
NFL
CBS
($622.5
Fox
($712.5
NBC
($650
ESPN
($1.1
$3.085
2006–2013 Network
million/yr) million/yr) million/yr) billion/yr) billion/yr
($0/yr)
54. Rank
MSO
BasicVideoSubscribers
1
Comcast
CorporaTon
22,937,000
2
DirecTV
18,934,000
3
Dish
Network
CorporaTon
14,289,000
4
Time
Warner
Cable,
Inc.
12,551,000
5
Cox
CommunicaTons,
Inc.1
4,968,000
6
Charter
CommunicaTons,
Inc.
4,653,000
7
Verizon
CommunicaTons,
Inc.
3,290,000
8
Cablevision
Systems
CorporaTon
3,043,000
9
AT&T,
Inc.
2,739,000
55. NFL
as
a
Content
Distributor
• NFL
distributes
Thursday
Night
Games
• NFL
Network
and
NFL
RedZone
– Sold
to
cable
companies
• Comcast
pays
$5
million
a
year
to
have
these
channels
– Many
cable
companies
have
not
picked
them
up
• Represents
a
missed
opportunity
for
addiTonal
revenue
• Does
not
compare
to
the
revenue
brought
in
by
networks
– This
represents
a
risk
of
going
to
internet
TV
right
now
since
it
is
not
an
established
market
56. Move
to
Internet
TV
• NFL
Revenue:
$9.4
billion
• Revenue
from
Networks:
approx.
$3
billion
• Reached
207.7
million
unique
viewers
in
2010
• Games
watched
by
an
average
of
17.9
million
viewers
• $3
billion/207.7
million
=
$14.44
for
season
• Leave
ESPN
the
most
profitable
contract
and
largest
online
presence
in
place
for
MNF
-‐
$1.1
billion
per
year
• $1.9
billion/
(207.7
million
–
17.9
million)
=
$10.01
for
season
• DirecTV
charges
$350
for
NFL
Sunday
Ticket
• 256
regular
season
games
+
11
playoff
games
=
267
• $3
billion
/
(267
games
x
17.9million)
=
$0.63
per
game
• $1.9
billion
/
((267
games
–
16
MNF
games)
x
17.9million)
=
$0.42
57. Internet TV changing the game?
• Revenue
–
Direct
or
Indirect
from
consumer?
• GlobalizaTon
–
channel
for
distribuTon?
• Engagement
–
how
important
is
fan
interacTon?
• Mobility
–
greater
access
with
increasing
connecTvity?
• NFL
as
a
distributor
of
their
content?
– NFL
Network
and
NFL
RedZone
channels
• Other?
58. Breakeven Revenues for the NFL
Current
TV
Internet
TV
$
4
Billion
Network
ESPN
1
1.9
1.9
ESPN
1.1
New
NFL
Rev
1.1
DirecTV
1
DirecTV
Networks
and
ESPN
get
$3.4
Billion
from
adverGsing
DirecTV
gets
$600
Million
from
subscribers
59. Key Numbers for Internet TV
• NFL
games
Reached…
– 207,700,000
unique
viewers
in
2010
in
the
U.S.
• On
average…
– 17.9
million
viewers
per
game
60. Current TV Market Pie
$8
Billion
Subscriber
Ad
$$
$$
NBC
DirecTV
CBS
$4
Billion
Ad
$$
Ad
$$
ESPN
FOX
Ad
$$
61. What would NFL charge?
Viewership
100%
90%
75%
60%
45%
Keep
Season
$
9.15
$
10.16
$
12.20
$
15.25
$
20.33
ESPN
A
la
carte
$
0.42
$
0.47
$
0.56
$
0.70
$
0.94
No
ESPN
Season
$
14.44
$
16.05
$
19.26
$
24.07
$
32.10
A
la
carte
$
0.63
$
0.70
$
0.84
$
1.05
$
1.39
*
DirecTV
is
charging
$350!
62. Silo via ESPN3.com?
AD
Ad
$$
$$
$2Billion
ESPN
Ad
$$
Ad
$$
$6
Billion
Subs
&
Ad
Revenues
Ad
$$
64. What is stopping the NFL?
• Does
this
fit
the
goals
of
the
NFL?
– Not
currently
since
internet
connecTvity
is
only
at
77.3%
with
only
57%
having
high-‐speed
– While
99%
of
the
US
has
TV
access
– However
internet
is
trending
up
• Requires
the
NFL
to
become
a
distributor
– Experience
with
NFL
Network
and
NFL
RedZone
• NFL
would
have
to
interact
with
the
fan
on
a
higher
level
–
new
to
them
• NFL
does
not
know
how
this
channel
will
develop
– Goes
against
their
“Wait
&
See”
strategy
• Is
this
decision
reversible?