Why NFL Plus Isn’t an SVOD Play

Why NFL Plus Isn’t SVOD Play
Yinchen Niu/VIP+

The NFL is getting in on the SVOD game.

NFL Plus, which launches in July, is fed by the computer and mobile device rights package previously held by Verizon. That deal was worth $500M annually — and would have been expected to fetch between $750M and $1B on the market — and allowed for viewers to watch in-market local games for free via Yahoo Sports.

The NFL has now taken these rights in-house and is charging consumers $5 a month.

But this isn’t an attempt at launching a serious direct-to-consumer NFL service. For one thing, the package only includes access to local games and prime time games, as well as those in post season. Local games typically are carried for free by a local network TV station, further reducing the potential market for this product.

Including preseason games in August, there are six months with local games available, stretching through to the early weeks of January. Ignoring for now how much could be made via advertising on the service — which is how Verizon monetized its annual half-billion-dollar outlay on these rights — the NFL would need 16.7 million consistent subscribers from August through to January to replace the revenue lost from the Verizon deal.

Factor in an increase in the value of those rights to $750M, and you need 25 million monthly subs for six months to replace that revenue — a tall order.

Advertising may not offer that much of a boost, either. Local games are available over the air via an antenna, MVPD or VMVPD service, with local AFC conference games also available for subscribers through Paramount+. NFL Plus will not offer a monopoly or even duopoly to attract advertisers.

What it does provide is a way for the NFL to boost its own media portfolio, which also includes the cable channels NFL Network and NFL Redzone, as well as the NFL’s digital assets and FAST channel.

In 2021, the NFL hired Goldman Sachs to explore selling a stake in its media business. Nothing has been announced as of yet, suggesting there may not have been enough value in what the NFL was offering parties.

Throw in mobile and web rights for games, and it’s a different proposition. This doesn’t mean NFL Plus will remain the preferred format for the rights in the long run. Charging for content that’s available for free elsewhere is a hard concept to pull off. But it will increase the value of the NFL’s own media business, making it easier to sell a portion of it.