Storyline: Even if live streaming doesn’t take over sports programming immediately, this deal opens the landscape for broadcasting athletics over social media sites. It moves the sports world farther into the realm of social networks. Written by Aidan Berg, Minneapolis, MN.
In early April the National Football League reached a deal with Twitter to broadcast 10 of the 14 Thursday Night Football (TNF) games on the social media site. The agreement is a win-win for both Twitter and the NFL. It may also be a sign of the future.
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Will more games be broadcast live on social media? If so, what are the financial implications?
The Deal
The ten games on Twitter will be simulcasts of broadcasts on CBS, NBC and The NFL Network. The contests will still be on television and the Twitter broadcast will have the same announcers and many of the same advertisements as the TV broadcasts. The TNF deal is an attempt by both sides to bring viewers content in a new form.
Twitter has been struggling to attract users, the decline manifested in its stock price decline. Fortune.com reported that Twitter has been exploring radically new ideas since the time that founder Jack Dorsey returned to the company last July. Beating out competitors, including Facebook and Amazon, is important for Twitter as it seeks to enhance its popularity.
Re/code estimated that Twitter paid just under $10 million for the ten games. By comparison, CBS and NBC shelled out $45 million for each of their five respective TNF games. According to CNBC, Yahoo! spent $20 million to stream one game last season. So Twitter is getting good content at a lower price to attract non-TV viewers.
“When you think about what exclusive content you can get in the United States, there really isn’t anything more valuable than the NFL,” said Robert Boland, a professor in Ohio University’s Department of Sports Administration. “Having the NFL is a particularly valuable hedge because, culturally, it’s one of the only things we stop and follow as Americans.”
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The NFL also wants to expand viewership. Boland says that’s even more important these days because the NFL has seen its ticket sales fall in recent years as more consumers prefer to watch games via broadcast vis-à-vis attending games in person. And a January 2015 piece on forrester.com reported that fewer people, led by Millennials, are buying home television sets–preferring instead to access entertainment via online streams.
What’s it all mean? The NFL had been reluctant historically to have game highlights shown via social media. But now it has authorized full game broadcasts via social media–a sea change in approach.
“We’re constantly looking for new and different ways to distribute our content,” said Alex Riethmiller, Vice President of Communications at NFL Media. “People are looking at video on a number of different devices, a number of different platforms, so we want to make sure we continue to serve our fans no matter how they’re consuming content or where they’re consuming content.”
If the deal was to accommodate fans, Professor Caryn Ward of Northwestern University said, then the NFL knocked it out of the park. “As a fan, I think it’s great,” said Ward. “I think it’s the way to go because that’s how fans watch the game sometimes.”
One notable aspect of Twitter’s sports section is the amount of live-tweeting viewers do while watching games on TV. Kate Radway, market director at Spredfast and former member of ESPN’s social media team, said she is interested to see how Twitter will organize its space when it becomes the first and second screen to certain users. “If Twitter can provide a very seamless viewing experience, where it makes sense to watch the game and to tweet about it, perhaps they will see an uptick in the people tweeting about a certain event,” Radway said.
Implications
The deal could be a groundbreaking endeavor for the future of sports broadcasting. “I think you’ll see every entity have some partner in the digital social media space,” said Boland. Ward agrees: “I think this is the first of a new way of watching, and a way of getting more fans to watch the games. I think if I were running any other sports, I would look at this and say ‘We should be doing that.’”
Ward said the NBA or a professional soccer league would probably be next in line to strike a deal with social media platforms for live-streaming games–if they can figure out the revenue stream. Radway said the sports leagues have the power over the social media sites. “They are the ones that have the content that everyone wants,” said Radway. “[The NFL] has already gotten a ton of money from CBS, whose broadcasting it on TV, but this is a way to make some extra money by giving it to Twitter.”
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Money is the driving factor in business and it’s no different in sports broadcasting. Radway said the future of broadcasting athletics over social media hinges on its financial viability. “I think it’s going to come down to if they can make the same amount of money on social networks that they can on broadcast,” she said. “I think we’ll see a lot of these deals with Twitter and Facebook that are streaming where it’s non-exclusive and the game is on television, because they’re able to still make money.”
Radway also said she doubts whether social media streaming will make the leagues enough money to totally overtake television broadcast. “I don’t know if the leagues will ever get to a point where they’re willing to say, ‘Let’s put this exclusively on social media because I just don’t think they’re going to make the same money,” she said.
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Most people still tune in to the NFL and other sports via traditional broadcasting. TV networks are able to pay far more for game rights than an online site, like Twitter, because the networks get so much money from viewership and advertising deals.
That means TV deals are still where sports leagues will make the big bucks. The NFL is prioritizing big TV contracts and using Twitter as a hedge in case broadcasting makes a move to social media. “It certainly doesn’t compare to our large broadcast contracts,” Riethmiller said of the deal. “But these are the beginning steps of trying to figure out the business models around streaming.”
Even if live streaming doesn’t take over sports programming immediately, this deal opens the landscape for broadcasting athletics over social media sites. It moves the sports world farther into the realm of social networks. “I think the idea is that you’re going to see much more digital distribution of games and game content,” Boland concludes, “and I think it has the potential to be a dramatically different pull for how we consume games.”
