Swot Analysis of Nfl Digital Media Case Essay
1. Pursue An Exclusive Partnership With One Wireless Carrier—this is the approach that the NFL previously chose in 2005 with Sprint. The deal was valued at $500 million plus $50 million annually to be the NFL’s exclusive wireless partner and an additional $50 million earmarked for NFL-related advertising and promotion. * Strengths—an exclusive relationship with Sprint provides a more intimate B2B relationship. Sprint would be willing to pay a premium for the NFL’s brand name and services.
They would benefit by being the official sponsor of the NFL. An exclusive partnership would involve higher levels of trust between the two companies than non-exclusive partnerships. * Weaknesses—over 70% of Americans identify themselves as fans of the NFL. In addition, the NFL is generates $8 billion annually, making it one of the most successful entertainment properties in the world. By choosing Sprint as an exclusive partner, you are leaving out a large number of NFL fans who could be potentially interested in digital media services.
An exclusive partnership with Verizon, the market share leader of wireless carriers, would exclude roughly 67% of the market. * Opportunities—the NFL’s digital media group could strike a new deal with Sprint or another wireless provider. They would strike a higher contract than before because their digital services have proved popular and profitable. * Threats—An exclusive partnership will make one wireless carrier very happy, but upset the rest. This could lead to hostile business relationships in the future. The NFL needs to be careful of turning potential business customers away.
Form Non-Exclusive Partnerships With Multiple Wireless Carriers—this would give each carrier the right to carry NFL content on mobile phones, but no one company has the exclusive right to do so. The NFL’s current television contracts have been non-exclusive in the past and have proven highly successful. * Strengths—this would allow any wireless carrier to carry NFL content on mobile phones if they chose to.
The NFL is also seeking to expand business; this choice would allow many more fans access to mobile phone services by reaching a much bigger audience. Weaknesses—This plan will certainly upset Sprint because they have successfully built their company name, brand, and image around the NFL. They will probably lose market share which could result in a bad business relationship between Sprint and the NFL. Also, wireless providers will not be willing to pay as much for the NFL content because they are not exclusive partners. * Opportunities—The biggest opportunity here is the access to a much larger market. The NFL would have the ability to please a higher number of fans, which seems to be part of their overall strategy.
This choice also looks to have the biggest opportunity for growth. Getting many wireless carries involved can lead to successful business relationships in the long run. * Threats—It is possible that not all wireless carriers will even be interested in acquiring the NFL’s content. Market research will have to be done before pursuing this plan. 3. Provide Wireless Rights In Partnerships With One Or More Television Networks—this would give wireless markets to current broadcasting partners in the form of a joint television and wireless deal. Strengths—television deals make up $4 billion in revenue, or 50% of the NFL’s total revenue.
The television contracts are up for renewal in 2013, and mobile rights could be very valuable to broadcasters. * Weaknesses—First, broadcasters do not currently have much a share in the mobile arena. ESPN has attempted to launch a sports based mobile phone, but it has not been highly successful. It would be hard for broadcasting companies to compete with the top wireless carriers. Also, the NFL would not be taking advantage of the highly competitive market for the NFL content from the wireless carriers.
Finally, DirecTV currently holds the wireless rights to live, full-game video for Sunday afternoon games for its subscribers. This means that a new wireless deal could not yet include full exclusive rights. * Opportunities—the main opportunity that we see here is that no other sport has ever tried to pursue this market. It would be a new market which naturally has great potential for profit and growth. * Threats—Entering basically into an unknown market has some serious threats. First, there would be some serious costs to pursue this market. Also, there is the potential for failure. This is by far the riskiest choice.