NFLs Wireless: A Big Score

League plans to make medium a revenue winner.

When Denver Broncos quarterback Gus Frerotte connected with wide receiver Ed McCaffrey in the end zone last month to seal a critical 38-37 victory over San Diego in the run-up to the NFL playoffs, fervid Broncos fans wanted to know about it right away, wherever they may have been. Until the beginning of this season, however, if those fans were outside the stadium during the final moments, they had to be near a TV, radio or PC to get the news.

Not anymore. The National Football League has kicked off an ambitious push into the world of wireless. Beginning this season, the NFL is offering users of one- or two-way pagers, wireless-enabled cell phones, and personal digital assistants access to headline news, final scores and upcoming schedules—any time, anyplace. So far, fans are responding. About 10,000 have begun using the wireless system in the seasons first dozen weeks.

There are a couple of strategies driving the NFLs wireless play. In the short term, providing wireless access to content is a good way to cement fan loyalty. Thats particularly important to the NFL in these days of growing competition. Not only is the league facing a direct challenge from the soon-to-be-launched XFL—which begins play Feb. 3—there are also more teams, a vast array of new sports, and an ever-growing field of TV and Web channels competing for fan attention.

Longer term, the NFL sees wireless as a potential significant additional revenue source. "Were going to wireless to provide a service to our fans, to allow them to be even more involved with the league and the teams and the players, and to express their passion for the game in an even deeper way," said Chris Russo, senior vice president of new media at NFL Enterprises, in New York. "Down the road, we certainly envision wireless becoming a revenue stream for us through the addition of advertising and e-commerce opportunities."

The leagues move into wireless is a milestone, not only for sports leagues, but for e-businesses generally, analysts say. Thats because the NFL is one of the first major consumer brands to attempt to take advantage of its clout by investing in the world of wireless. "The first wave of wireless involved carriers and Web portals teaming up to provide content to wireless consumers," said Mark Plakias, an analyst at The Kelsey Group, in Princeton, N.J. "But they had no clear ROI [return on investment]. Now were seeing people with real skin in the game, like the NFL, betting that their brand will drive wireless usage."

To be sure, the NFL has an enviable track record when it comes to keeping abreast of new technologies. The league launched its official Web site in 1995, becoming the first major sports league to go online. And is one of the most frequently visited sports sites on the Web, according to New York-based Media Metrix Inc. In October, the site ranked among the top 50 most-visited Web sites of all kinds, hitting No. 46 with 6.5 million unique visitors.

Opening play

the nfls decision to jump into wireless came almost as suddenly as a game-ending Hail Mary pass completion in the end zone. This past summer, only weeks before the scheduled start of the football season, NFL Enterprises looked at the rapid growth of wireless technology users in the United States and Europe and decided to take the plunge. The leagues biggest hurdle to getting wireless off the ground wasnt finding content; everything it planned to put out on wireless already existed on the Web site. The first challenge was locating the expertise to launch its wireless initiative in time for the new season, which started Sept. 3.

After a couple of weeks of research, Russo and his team decided to outsource development and hosting of the NFLs wireless applications, signing on with Atlanta-based Inc. Besides hosting wireless applications, AnyDevice has software that translates Web-based content into formats that can be accessed from multiple wireless device types. Within two weeks, AnyDevice and the internal IT group had evaluated which content they wanted to go on the wireless system—scores, schedules and news—and made the necessary protocol translations to provide that content to a variety of mobile devices, including SMS (Short Message Service) pagers and cell phones, Handheld Device Markup Language- or Wireless Application Protocol-enabled phones, Palm OS devices, and BlackBerry devices from Research in Motion Ltd.

Just as the season began, the site launched its wireless service. Fans can sign up on the Web site and, by following some simple directions, learn how to access the NFLs wireless services from their particular devices. They can also customize the service by choosing when they want to receive news alerts if, for example, theyre using a one-way paging device. In addition, they can select which teams and schedules they want to track. The registration is free and allows and AnyDevice to know which devices are proving most popular and what kinds of information are most valuable to users. So far, the most popular devices have been SMS-enabled cell phones and pagers.

Moving the ball

user feedback from e-mail and fo-cus groups is already prompting modifications to the service, said Evan Kamer, director of business development for the NFL. "Weve learned, for instance, that even brief headlines on the Web, like N.J. Jets Starting Running Back Out for Two Weeks with Injury, needs to be cut back to something more brief, like Jets Running Back Out," Kamer said. "Its easy to overestimate the amount of space on a cell phone screen."

Everything the NFL learns about the habits and preferences of mobile users moves it one step closer toward its goal of turning its investment in wireless into a profit center. "Once we reach a critical mass of users—in the hundreds of thousands [of users], say—we can offer advertisers intriguing opportunities, and we can explore the possibilities of [offering] e-commerce to mobile users." Down the road, the league may offer mobile users access to streaming video and audio of game highlights on a subscription basis, for instance.

Russo declined to speculate on when that will happen—with good reason, analysts say. No one knows yet how rapidly wireless commerce will play out in the next few years. "If you think e-commerce is still in its infancy, then m-commerce [mobile e-commerce] is still just a gleam in daddys eye," said Bryan Prohm, an analyst at Dataquest Inc., in Raleigh, N.C. While Gartner Group Inc., of Stamford, Conn., estimates that between $10 billion and $1 trillion worth of trade will pass through mobile devices each year by 2005, it remains unclear which wireless standards or devices will be favored by users.

Fortunately for organizations such as the NFL that are taking the wireless plunge early, the cost of entry is relatively modest, particularly via outsourcing. Pricing of products and services from companies such as AnyDevice vary, depending on whether customers choose to license the software platform and build the applications themselves or contract with AnyDevice to do the development, and whether they choose to use AnyDevice as their application service provider. The NFL, which declined to say how much its investing in its wireless initiative, is using AnyDevice not only to develop and host its wireless service but also to provide user support. According to Thomas Johnson, CEO of AnyDevice, setup fees for the software range from $10,000 to $100,000. Monthly hosting and support fees run $3,000 to $15,000, in addition to usage fees that depend on traffic.

The NFL expects its wireless investments to produce a big score eventually. The wireless audience being built and the lessons the league is learning will eventually be used by individual teams and other units such as the NFL Films division, Russo said. Already, some teams are launching their own wireless efforts. The San Francisco 49ers, for example, are testing wireless systems that allow spectators at 3Com Park to access breaking news on other games.

Maybe its not surprising that the league and some of its teams are aggressively pioneering the use of wireless Web technologies. After all, in football—just like in e-business—when you see an opening, youve got to jump on it.

"Wireless is here, sports are hot and were well-positioned to take advantage of both," Russo said.