Super Bowl Challenge: Stadium vs. HD TV

January 13, 2014 - Bloomberg Businessweek

As the first “cold-weather Super Bowl” approaches, thousands of tickets remain unsold. At least some fans are waiting for the weatherman to tell them just how chilling the “fan experience” might be before paying more than $1,000 per ticket for a winter’s night in the New Jersey grandstands. For the National Football League, the problem runs deeper than freezing temperatures: Attending a football game has become an exceptionally poor value in comparison with viewing it on a giant high-definition screen from the comfort of

your couch.

I’m well acquainted with just how painful the fan experience can be. On a frigid night in November, I attended the Patriots-Broncos game at Gillette Stadium in Massachusetts. It was just before halftime when the battery in my iPod Shuffle ran out and the already low quality of my experience declined dramatically. For the better part of two quarters, this New England fan suffered through a performance that featured three lost

fumbles, leading to a 24—0 deficit to the visiting team led by Peyton Manning. A wind chill below zero made things worse. And now my radio was dead.

Since its opening in 2002, Gillette Stadium has been regarded as one of the finer NFL arenas with larger video boards, a high-capacity Wi-Fi network, a smartphone app for fans, and other comforts. The Patriots are among a minority of teams that sell out every home game. Most teams aren’t that fortunate: Since 2008, an average of 23 of the 32 NFL teams failed to sell out every home game—some by just a few thousand, others by 10,000 or even 15,000. It was even a struggle to sell out three of the four divisional playoff games this year.

What questions might this raise for NFL owners? As broadcast revenue rises, will it remain economical—or even possible—for the stadium experience to compete? Could the days of 60,000-plus seat stadiums be numbered, replaced by 15,000-seat stadiums optimized for the most ardent fan? How important are fans in the stadium to the NFL broadcast product anyway?

Few NFL team owners seem willing to reconsider whether their stadium experiences will ever win the battle they are waging with the disruptive home TV experience. One thing is certain: They will not win if they keep offering a static experience that costs more and more. For the 2013 season, the average NFL ticket cost $82 - that’s up more than 50 percent from 10 years earlier and doesn’t include the ever-growing cost of parking or refreshments.

One job that television does better than watching from the stands is providing announcers that tell you what’s happening. On that frigid November night, I no longer had radio announcers giving me the ins and outs of each play. I had next-to-no idea which players were on the field, which players had been injured, and only a limited sense of the historical significance of what was unfolding in front of me.

After halftime, the Patriots somehow managed a miraculous comeback to win 34—31 in overtime. (The game ended at 12:23 in the morning.) I was a happy fan, but extremely cold and not as knowledgeable about the outcome.

In many industries, rapid change threatens existing business models, and enterprise leaders often find that traditional approaches to strategic planning are insufficient. To survive, leaders must first develop a view of what would constitute a successful organization in the future and then determine how their organization of today must transform into that organization of tomorrow. Applying the same framework to the fan-attendance challenge, NFL executives and team owners might seek to answer two questions: “What does the NFL look

like in 10 years?” and “What will it take to be a successful, profitable franchise in that future environment?”

If team owners apply the framework successfully, their answers will be grounded in assumptions of the future fan or fundamental problems that their franchises will have to solve to be successful. Examples might include “Make my friends feel like my family room is on the 50-yard line,” or “Engage my spouse in the game so we can enjoy it together.”

Armed with these insights, team owners would then begin to launch small, focused experiments to address those problems as entrepreneurs might, with care given to the technologies and environments that fans will likely have at their disposal. For example, immersive 3D technology will likely give fans the ability to “be in the game”—to look up, down, left, and right through numerous in-stadium and even on-player video feeds, all from the comfort of their own homes.

In the end, the owners who recognize the true nature of this “at-home experience” threat and follow the necessary process of reinvention—testing, learning, and adapting—may be able to transform their franchises over time, finding sources of profitable growth in these emerging experience opportunities that are currently better framed as threats.

Despite being cold, hungry, and thirsty as I left Gillette Stadium early that Monday morning, I was happy to be present for the greatest comeback in Patriots history. There was no question in my mind, however, that the entire experience had bordered on painful—and I’m not just referring to the first half of the game. When my iPod Shuffle battery ran out, I suddenly appreciated how important contextual information had been to my fan experience, and I was already nearly frozen.

In that moment, I truly realized how much I enjoy watching football at home and how much I take for granted that experience. And it left me wondering—could there be a day in the future when an NFL game would take place not in a stadium but in a large TV studio?