Ovies: Amazon's NFL streaming deal makes more sense than you think
Posted April 6
Amazon Prime customers will be getting a few football games to go along with their free two-day shipping next season.
Amazon, the ubiquitous online retail home to just about everything, reached a one-year agreement with the National Football League to stream 10 Thursday Night Football games next season. The deal is reportedly worth $50 million, a substantial increase from the $10 million Twitter paid for the same rights agreement last season. Where Twitter allowed anyone to watch games on their social network for free, NFL streaming on Amazon will be exclusive to their $99-a-year Prime membership. The Thursday Night Football package will still be available over-the-air on CBS and NBC, and Verizon customers will still be the only football fans who will be able to watch football on cellular devices.
On the surface, the NFL's streaming rights are nothing more than a novelty. Twitter's much hyped foray into embedding football games into their social media platform last season was a success only in that it proved it could handle the bandwidth stress of thousands of viewers relatively glitch-free. Sure, it was nice for hardcore sports fans who maybe wanted to watch a college football game on ESPN and keep up with an NFL game on a second screen, but that's about it. There was little incentive for anyone at home with the ability to watch CBS or NBC in superior quality with an over-the-air HD antenna or cable package.
Reality hit Twitter when their investment didn't result in user growth and failed to increase active usage. And it wasn't like Twitter was making a ton of money on ads given the simulcasts of CBS and NBC only allowed them to sell commercial blocks reserved for local broadcasts.
Amazon, on the other hand, has a few things going for it that Twitter doesn't based entirely on their core business - knowing what you like and selling you stuff.
Amazon Prime is a ridiculously good deal for $99-a-year. Beyond the free two-day shipping, members also get movies and television shows (original productions and certain back catalogs) through Amazon Prime Video. Prime members also have access to free books and magazines for Amazon's Kindle family of devices, and the ability to stream a large library of music. Prime members also get discounts, such as 20% off pre-ordering video games and free release date shipping. Once Amazon gets you on Prime, trust me, you'll find ways to maximize the membership.
For Amazon, the NFL is just another way to add value to their version of a bundle. It will also give Amazon valuable consumer information, which in turn they'll try to get you to buy more stuff. Oh, you watched the Carolina Panthers play on Thursday night? Amazon will be more than happy to direct you towards their Carolina Panthers apparel section. Perhaps you'd be interested in a Cam Newton Fathead poster? Amazon has that too.
It makes plenty of sense, and it could be a peek into the future intersection of sports and commerce.
Setting the table for the next decade
In November, the Wall Street Journal reported Amazon explored the possibility of creating a premium sports tier for Amazon Prime Video. The company talked to the NBA, NFL, MLS, and Major League Baseball. Nothing came of it, simply because all major sports television rights are locked up for several years.
However, if you look to the fringes, you'll see tech companies dipping their toes into the sports distribution waters. Twitter has deals to broadcast weekly out-of-market Major League Baseball, NHL and NBA games, and recently signed an agreement with the National Lacrosse League. Facebook recently picked up the rights to the World Surf League to go along with a portfolio of soccer games.
Given all major sports television right deals, including the NFL and NBA, are up for bidding within the next 10 years, everything that is happening now sets the table for more an intriguing future. All one has to do is look at the most viewed broadcasts of the year to understand live sports remains the safest investment for traditional media companies, but now the potential of a more intense bidding war looms as tech companies flush with cash looking to solidify their digital platforms want a piece of the action.