Amazon beat Twitter on a deal to obtain streaming rights for 10 of the NFL’s Thursday Night Football games for the 2017 season, which is indicative of how valuable the Company considers offering live sports. Amazon reportedly paid $50 million which is five times more than what Twitter paid last season. Facebook and YouTube were other bidders for the streaming package. What sets this sports video streaming service from Amazon apart from what Twitter offered earlier, is that it’s included in Amazon’s pivotal Prime video offering, Amazon’s yearly membership fee for Prime Video is $99 and $10.99 a month
According to Alan Wolk, lead analyst at TV[R]EV, the Company can use the consumer data it collects to propel custom advertising based on sports viewing habits of users. He further stated that Amazon can use data that allows for easy t-commerce. He cited an example of how every time the Detroit Lions play, Amazon includes Lions gear in recommendations apart from adjusting the cost of Lions jerseys and making it available at a discounted rate on the day of the game, thus enticing the customers to buy one. Amazon’s deals benefits the leagues in terms of revenue generation as well as itself in the sense that it gets across its brand and related products in front of more eyeballs.
Revenue is incremental for the leagues due to the billion dollar deals with the networks. For the online video players too it’s a winning situation whereby they get to look cool and hip and perhaps taken more seriously. According to MoffetNathanson, the next set of rights will be auctioned in the year 2021 which is when the U.S pay-TV market will start seeing “increased disruption”. Although NFL is the first large agreement signed for online sports Live streaming, it could use this deal as a replica for other sports leagues in the US and other countries. Large premium sports rights will be unavailable for purchase until 2021. In order to expand to other countries, Wolk said that a number of logistical issues will have to be dealt with in order to grow in terms of scale. Read More