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How NFL Game Pass uses data to conquer fans around the world without hurting TV revenues

  • NFL believes its Game Pass is the fastest-growing single sport OTT service in the world
  • Global distribution – excluding US, Canada and China – now handled by Bruin/WPP joint venture
  • Growth of OTT service will not undermine global rights fees, experts say

One of the key learnings about users of the NFL Game Pass might surprise readers not drawn from Gen Z: not only is the average fan following Game Pass on three devices simultaneously, but that fan is typically watching multiple live games.

Tracking, understanding and developing the OTT product in response to such unexpected user behaviors is one of the secrets of the Game Pass’s success.

The NFL’s managing director of international media, Sameer Pabari, tells SportBusiness: “We continue to look to aggressively grow and build the NFL’s fan base, and in turn the Game Pass subscriber base, around the world. You’ll see us innovate relentlessly to improve our product, with a particular focus on casual fans. We know that as our product improves and evolves it will be a great way to increase our fans’ passion for the game.”

The NFL believes its NFL Game Pass is the fastest-growing single-sport OTT product in the world. The league does not publish figures for its penetration levels but one expert estimate puts paying subscriber numbers, outside North America, at between 300,000 and 700,000. Other sources say this is low.

Patrick Mahomes of the Kansas City Chiefs runs for a touchdown against the San Francisco 49ers during Super Bowl LIV (Photo by Jamie Squire/Getty Images)

Since October 2019, Game Pass has been distributed in 181 markets by OverTier, a company set up by a joint venture of sports investment vehicle Bruin Sports Capital, with advertising agency WPP taking a small stake. From 2017 to 2019, the company distributed Game Pass in Europe only.

OverTier is supported by two other Bruin companies: Deltatre, which handles the technical delivery; and Two Circles, which is responsible for data collection and marketing. The Wavemaker agency, a subsidiary of WPP’s GroupM, handles media sales for Two Circles.

For anybody involved in OTT in 2020, this is still primarily a period of learning. As OverTier’s chief executive Sam Jones tells SportBusiness: “What we are all learning as an industry – whether that is media, sports, entertainment – is that OTT isn’t a purely technological point. It’s a consumer business model opportunity. That means OTT is deeply connected to all the other parts of the sports value chain, and for us, with the NFL itself.

“We have combined data, technology and marketing with a pure consumer focus to everything we do. That has implications for strategy, for culture, for monetization. Dedicated direct-to-consumer expertise, with the fan at the center, was what we thought would help us be successful. We continue to learn,” he adds.

Dan Cohen, senior vice-president of Octagon’s Global Media Rights Consulting division

There have been specific lessons. “We have learned that fans want a multi-screen experience, but – crucially – they want that experience to be as bespoke and as relevant to them as possible. That means in terms of platform, time zone, content preferences.”

While the need for personalized and localized content might have been predicted, other things have come as a surprise. “The average Game Pass customer across the world watches on three devices at once,” explains Jones. “The more avid subset of the fanbase watch on four devices at once. I don’t think that is something any of us would have predicted when we set out on this journey and it just shows how fast the consumer behavior is changing and therefore how fast the business models need to change.”

Multi-screen viewing is the new normal, especially among millennials and Gen Zs. But what seems really new is the high proportion of these multi-screen users who are watching multiple live games.

“We offered that [multiple live game] experience from day one, and we saw the take-up increase throughout the first season. Then we introduced a new feature called Watch with RedZone, where you can watch a live game simultaneously with watching RedZone [the NFL’s ad-free multi-feed matchday coverage] and jump in between them at will,” Jones says.

For Jones, understanding OTT is not about how fast mobile consumption or any other platform is growing. “What is really growing is a new and enhanced behavior around how fans watch a sport. It’s the holistic experience of viewing that we see changing fast. That’s exciting for us.”

Game Pass audience

The initial concept of Game Pass was to reach the most avid NFL fan, both in the US and abroad, but this idea has evolved with the growth of the platform.

As Pabari explains: “While the product offers something for all fans, it is was initially designed for the avid fan. There are some fans who choose to consume NFL content and specifically our games over digital platforms and we see this primarily from a younger demographic. At the same time, Game Pass also offers something extra to fans who primarily watch games over linear TV, such as real-time data, condensed games for catch-up or our award-winning documentaries.”

If there is an obvious lesson for sport from the roll-out of Game Pass, it’s that a one-size-fits-all OTT proposition will not work on a global basis. The NFL and OverTier look for ways to personalize every aspect of the service, from price points and marketing to content and language.

Having different entry points is “essential, not just important”, according to Dan Cohen, senior vice-president of Octagon’s Global Media Rights Consulting division.

“The NFL has done a good job in recognizing the infancy of the sport internationally. The NFL’s ability to super serve the die-hards with nearly unlimited access to content, both live and 24/7, while also providing new and emerging fans a smaller, more digestible content offering with no paywall at all, is critical to growing the sport,” he says.

NFL-specific 

It is arguable that there are characteristics of American football that makes it an ideal platform for a streaming service. Conversely, there are also aspects of the NFL which present special challenges for the sale of a subscription product.

“The NFL is incredibly data rich and lends itself to a lean-forward experience,” OverTier’s Jones says. “It also lends itself to multi-screen and multi-game viewing. It is also a sport which lends itself to lean-back viewing, if you think of Red Zone, which is curating the live experience for the viewer. But I do think the NFL is unique and that is one of the reasons why Game Pass has been so successful: the sport itself is perfectly positioned for OTT.”

Game Pass allows users to choose a range of viewing options for each NFL match

However, unlike many other sports leagues, such as Europe’s top football leagues, the NFL has a very short season – from September to December, with the play-offs in January, the Super Bowl in February and Draft in April, before a very long pre-season. Selling a year-long subscription and minimizing churn is a constant challenge.

As Octagon’s Cohen puts it: “While I can’t speak to specific churn rates for Game Pass, churn is an important concern. However, churn is top of mind for any and all direct-to-consumer operators – Netflix, Amazon, Apple TV, and so on. The key to all streaming platforms is continuity in quality content that will increase average minute audience and total viewer hours, while reducing churn.”

This makes non-game content outside of the regular season critically important, and it’s an area the NFL invests heavily in. Jones describes this kind of content as a “critical part” of the value proposition, “not only in the core product but also as we work with fans to develop their ability to engage with the sport”.

Threat or complement?

In the US, network TV audience ratings for the NFL increased in 2018 and 2019 after drops in 2016 and 2017, a reversal that coincides with an aggressive roll-out of Game Pass. This would appear to suggest that Game Pass is not colonizing linear TV audiences and may even help drive them.

Pabari concurs: “We have consistently found, whether in the United States or abroad, that the more NFL content that is available to fans, the more consumption we see. A perfect example of this as it pertains to Game Pass is in Germany. Germany has three outlets to watch NFL games: ProSieben, our free-to-air broadcast partner; DAZN, our pay-TV partner; and Game Pass. Over the past year, all three of those platforms saw growth in terms of consumption of NFL football.” 

The NFL’s next round of US media rights deals will begin in 2021 and there is no concern at all at the league that a successful expansion of Game Pass could have a negative impact on rights values. “NFL football has consistently proven to be the most valuable content available in the entertainment industry,” Pabari says, “and we feel confident the value of those rights will only continue to grow.”

For George Pyne, the founder and chief executive of Bruin Sports Capital, the upcoming rights negotiations will provide a “very interesting case study” in dynamics between traditional and digital media.

“The big money is in traditional media, right now, but it’s important that content owners strike the right balance to be able to cultivate a growing audience. The two will coexist for the foreseeable future. What will be interesting to follow is how fast the revenue balance shifts.

“OTT speaks to a new era of innovation and opportunity in sports and entertainment that we want to lead,” he adds. “It is where the puck is headed. But at the same time, the industry was built by traditional media’s ability to ignite the passions of fans everywhere. We have great respect for its legacy on the growth of sport globally and still today it continues to reach fans at greater scale than any other genre.”

Bruin triumvirate

The old military adage that no battle plan survives the first contact with the enemy could be adapted for the modern media age to something like: no OTT service survives first contact with a live audience. Not without some teething problems, at any rate.

Game Pass too has it its technical problems, most recently a three-minute outage in some markets during this month’s Super Bowl. The improving technical infrastructure around the world, with things like the roll-out of 5G, will naturally take care of most quality and user-experience issues.

Having all the links in the chain under one roof will make it easier to meet those challenges. As OverTier’s Jones explains: “We’re fortunate in OverTier that we have best-in-class global marketing and technology capability with Two Circles and Deltatre. We spend a lot of time thinking about how we best integrate them into a people-focused approach. We have a vast and rich dataset. We speak every day to fans – qualitatively, quantitively. We run surveys continuously through the year and we use all this information to feed back into product decisions.”

He argues that the OverTier/Deltatre/Two Circles collaboration has created a “unique model” that enables OverTier to “marry up the best available technology, data businesses and tools and marketing, and create an experience we think fans love”.

Those one-to-one fan relationships are used “to constantly learn, evolve and improve the product and the experience. So, when we move into a new market, we have a head start in terms of knowing what the majority of fans would wish to see in terms of platforms, content, packages, pricing and product.

OverTier’s chief executive Sam Jones

“In Europe we found our way through prototypes, data and insights to the right blend of subscription packages, the right blend of prices and the right blend of content for different types of fans. We also learned how the avidity of a fan changes over time and in Game Pass we can support that and help them on their journey through the NFL. Starting from maybe a fan who signs up to our freemium product to watch network and highlights, through to the top-tier Pro product, where they can watch any live game.”

That model was then taken and applied to markets in the rest of the world. “We found the majority of the learnings applied. We could then spend our time on fine tuning the model to take account of local market intricacies and behaviors,” Jones says. “That’s now how we spend a lot of our time: creating an experience that is as relevant to the fan as possible in each of these 181 markets.”

Data is very much at the heart of that activity. As Bruin’s Pyne puts it: “Data intelligence is going to be the single most important resource in the future growth of sports.”

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