The rise of Netflix could hurt the NFL
The rise of streaming services like Netflix might be a bad thing for the NFL, according to analysts at UBS.
The NFL had a panic-filled season this year, with regards to viewership. In the first chunk of the season, the NFL saw primetime viewership dive by double digits relative to last year. The league officially blamed the presidential election, but also said it could work on improving things like how much advertising was being served to viewers.
One reason might be that the NFL is worried the popularity of streaming services like Netflix, which has a slick interface, tons of portability, and no ads, could push the league out of step with viewer habits.
That might seem paranoid, but there's some data to back it up. In a recent report by UBS, analysts led by Doug Mitchelson showed that the decline in NFL ratings was greater among households that subscribed to a subscription video on-demand service (SVOD), like Netflix, Amazon Prime Video, or Hulu.
Here is the chart from UBS:
While ratings for non-SVOD households fell by 6%, ratings for SVOD households fell by 10%.
Why might that be?
"In a world where Netflix has no commercials and consumers are used to 15 seconds of pre-roll, is there a better way to do commercials with our broadcast partners?" NFL Media exec Brian Rolapp asked in an interview with Broadcasting & Cable in November. He said that running 70 per game might be a turnoff.
Here's another chart from UBS showing how the amount of ads per game has gone up over time:
More and more ads might be making audiences impatient, especially those that live more in the world of streaming.
"Up until now the NFL was a juggernaut, steadily growing in popularity, but this year's audience declines and the palpable deterioration in fan interest in the NFL ... should give the NFL and its TV network partners serious pause," the UBS analysts wrote. "With audiences increasingly impatient and distractions only a digital device away, we would suggest that making the NFL games more engaging is crucial."
In a Netflix future, people might simply not want to sit still for 70 commercials a game, and the NFL might continue to suffer.
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