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The Nfl's Digital Media Strategy

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The NFL's Digital Media Strategy

Media Management MK648

Professor Mills

Chia-chi Wu

Situation Analysis

The National Football League(NFL) is well-recognized as the most popular game in the United States, earning averaged 16.6 million viewership per game across the season and over 98 million viewers for the Super Bowl XLIII in February 2009. With that in mind, an ambitious goal was set by NFL Commissioner to reach $25 billion in revenue by 2027; that is to say, NFL needs to gain nearly $1 billion in new revenue on average per year.

    The NFL is more than just a football league but a growing brand. It established branding strategies and emphasized values like "intense," "integrity" as well as employed aggressive marketing messages to promote the league. To best monetize the game and ideally achieve the goal, it's crucial to take a closer look at revenue and take advantage of any possibility. NFL derived its revenue locally and nationally from media contracts, sponsorships, and events such as Super Bowl. Besides sources mentioned above, digital media also serve as a potential market which therefore is the issue, in this case, to be strategically solved. Television plays a pivotal role in NFL's revenue, accounting for approximately 4 billion. It' a smart move that NFL established NFL network, offering football fans intriguing content like pre-season games and NFL Classics and created the premium NFL RedZone to target avid sports fan. The NFL network was aligned with the brand value "intense" to provide consumers a 365-days-a-year, 24-hours-a-day experience." To further tap into digital market and capitalize growing population of the Internet, NFL formed its Digital Media group to gain premium control over digital rights. Revenue of NFL Digital Media came from advertising, paid content, satellite rights, and wireless rights. The wireless market among all was severely competitive and lucrative, generating over $152 billion in 2009. Therefore, NFL Digital Media group faced two challenges: one is identifying potential wireless partners, the other is structure the deal as exclusive or non-exclusive.  

Assessment of Decisions

The NFL currently had the exclusive partnership with Sprint/Nextel, offering exclusive content rights including live stream on Sprint's mobile television platforms, video highlights, available audio after games, NFL films video and Sprint-branded personalization contents in return of $600 million paid by Sprint annually. Data indicated that 1.5 out of 7 million subscribers of Sprint downloaded NFL mobile, making it Sprint's best performance app. This sole partnership with NFL undoubtedly became a pillar of Sprint's marketing strategy which worked out very well. With the Sprint deal expected to expire in April 2010, the NFL was considering other potential parties and therefore faced three following options.

1.    Pursue An Exclusive Partnership With One Wireless Carrier

The first option is to remain the same pattern with one wireless carrier, potential candidates including Verizon, AT&T, T-mobile and Sprint/Nextel. The advantage is the NFL can reach mobile customers who subscribe to this company. Among all AT&T captures over 43% of all smart-phone users, making it the leader of US market. The disadvantage will be putting limits on users subscribing to other companies and lose potential revenue.

2.    Form Non-Exclusive Partnerships With Multiple Wireless Carriers

The second option goes for evenly distribute NFL content to several wireless companies. Pros are reaching the farthest football fan and generating more revenue. Giving out the right to carry NFL content to different carriers meaning connecting to more audiences, thus higher profit. On the other hand, it may be difficult to control complicated partnerships and calculate financial risks.

3.    Include Wireless Rights In Partnerships With One Or More Television Networks

The last one was to work with broadcasting partners on a joint television and wireless deal. As mentioned in the case, television deals were up for renewal soon, and mobile rights would be valuable for broadcasters like ESPN who had its product for phones. However, instead of working with wireless carriers to rely on broadcasters indicated losing opportunities tapping into the wireless market. With the grow of second-screen trends, it may be risky to take the move. Plus, DirecTV held the wireless rights to air certain games, implying that the deal would not be full exclusive.

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