Your browser is not supported. Please update it.

28 July 2022

NFL+ faces challenging start to D2C life

The hills are alive with the sound of breakaway direct-to-consumer sports streaming services, with NFL+ rolling out this week at a cut-throat early price point of just $4.99 a month.

NFL+’s cheapness has manifested in saturated commentary about the underwhelming content roster due to the complex contractual web of sports rights with other outlets, therefore holding back the service’s full potential. With all the rights noise, little has been said about the technology under the hood powering the new sports streaming platform.

Unfortunately – yet unsurprisingly – supplier relationships and in-house innovations are under lock and key, mostly, aside from the obvious with NFL+ being heavily reliant on AWS cloud infrastructure.

We have picked up on a few clues, however. With the NFL’s GamePass offering set to be replaced by NFL+, the former counts Endeavor Streaming as a customer, and we can therefore deduce that the company is also being used for the new platform.

From the foundations of acquiring the NeuLion streaming business in 2018 for $250 million, Endeavor Streaming has risen to offer end-to-end streaming technologies handling content aggregation, management, monetization, UX, and transcoding via its MainConcept arm, providing both codecs and applications based on them, including a live encoder.

With NFL+ being targeted at mobile users, it is notable that mobile operators including Verizon have used the AWS Wavelength technology for live streaming NFL matches, as an edge-based mechanism for delivering ultra-low latency applications to 5G devices.

AWS Wavelength enables offload of data processing tasks from 5G devices to the network edge to conserve resources like power, memory and bandwidth for applications like VR and AR, as the platform reduces the Motion to Photon (MTP) latencies of VR/AR applications to below the 20ms benchmark that is needed to offer a realistic experience.

Back in 2014, the NFL rolled out instant replay systems using a lot of Haivision products, with dedicated circuits from the leagues back to the headquarters. But problems soon arose with international games, whereby the NFL could not justify putting in dedicated circuits, which is when the organization started exploring the SRT protocol – meaning it could take advantage of circuits at Wembley stadium in London, for example.

Then, in 2020, the NFL extended this relationship to other low latency purposes, to provide very low latency video feeds to the NFL’s data provider SportsRadar, which is based in Germany. All hosted on AWS for distribution, Haivision and the NFL managed to shrink latency from between 9 to 10 seconds latency, down to just 1 second.

All of these pieces will tie into the new NFL+ service, which is not short of critics.

A notable one is rival FuboTV, which argues that D2C platforms are leveling out, predicting that the next five years will see a shake-out of the D2C format after a flash of initial hype for the next year or so. WWE for example (which happens to be a client of Endeavor Streaming that it stole from Disney’s BAMTech back in 2019), had a fast start on the D2C market some eight years ago now, but this has since reached a plateau.

Something not expected to plateau, but spike, is consumer frustration with a fragmented sports rights market that looks set to exacerbate with more D2C sports streaming platforms from franchises like the NFL. Apple’s recent landgrab of MLS soccer rights, for streaming globally, is an example of bucking this trend – using its vast wealth to defragment the market and create an unfamiliar one-stop shop for MLS fans.

NFL+ will start out offering access to live out-of-market preseason games, live local and primetime regular season and postseason games (but for viewing on smartphones and tablets only), plus live local and national audio for every game, NFL Network shows on-demand, and NFL Films archives.

The NFL’s current suite of rights deals is valued at around $10 billion annually. Most estimates put average viewership at around 20 million people per game, meaning that weekly viewership is likely around 60 million people, tuning in across the multiple days of coverage.

A safe division of viewers per household would be around three, meaning that there are going to be around 20 million potential subscriptions, if our napkin math holds up. At the 20 million point, the amount that the NFL will have to generate per viewer is $500, to be comparable to the TV deals.

This is before you consider the cost of running the service too. At $500 a year, this would be $41.66 a month, or $83.33 if you consider the six-month length of the season.

The initial price point of just $5 a month is unlikely to stay fixed for long.