Why Amazon’s Deal With The NFL Means More Than You Think
There’s little question the big fish in broadcasting rights – at least here in the United States -- is the National Football League. Continue reading to learn why Amazon's deal with the NFL is so significant.
NBC, Fox, CBS, and ESPN are paying a combined $39.6 billion for the broadcast rights to the league’s games from 2014-2022. As a comparison, three networks paid less than a third of that ($12.4 billion) to broadcast Major League Baseball games for nearly the same timeframe.
That’s especially impressive when you consider there are roughly 10 times the total number of games (and, in turn, 10 times the number of game days) in MLB vs. the NFL.
That’s why last week’s news of Amazon's deal with the NFL, costing the marketplace giant $50 million to live-stream 10 Thursday night NFL games during the upcoming season is a big deal.
The stream will be limited to Amazon Prime subscribers, but that shouldn’t do very much to limit the potential audience. Twitter, who streamed its games for free in 2016 while hosting the same package, has roughly the same number of active users in the U.S. as there are Prime subscribers (somewhere in the high 60-millions).
Fifty million dollars to broadcast 10 NFL games on Thursday nights to a limited audience might seem steep (Twitter paid just $10 million for the same number of games), but the L.A. Times made the observation last week that Amazon simply needs to add 500,000 Prime subscribers to pay for the entire deal – and that’s without selling a single dollar of advertising.
But simply breaking down the cost by Prime subscriptions – or even advertising -- doesn’t take into account Amazon’s capabilities and reputation for innovation.
Amazon will more than likely attempt to turn the webcasts into a substantial additional revenue stream by cross-promoting its massive marketplace, leading fans to have food delivered during the game or perhaps to purchase exclusive NFL merchandise.
Through that lens, profitability seems even more of a certainty.
Meanwhile, with its technical capabilities, Amazon could potentially reach even further and develop a viewing experience that adds innovative and interactive features.
If Amazon could add value in that regard, it could lead fans to prefer the online webcast vs. the TV network broadcast -- and that could set in motion a movement that could quickly spread across the full NFL season, and even fundamentally change how fans have experienced sporting events from their homes for more than 60 years.
Even prior to the inevitable launch of whatever Amazon does to maximize revenue from this engagement, it has made a considerable statement by simply entering the fray.
Since 1982, the only media outlets to have held contracts with the NFL for English-language broadcast rights are ABC, CBS, Fox, NBC, ESPN (and, since 2014, each of their online streaming counterparts); TNT (1990-97); the league’s own NFL Network (2006-present); Twitter; and now Amazon.
The outlets to have broadcasted live NFL games is a very exclusive company, and Amazon's deal with the NFL can soon place it confidently alongside those entertainment giants.
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