The broadcasting terms of Amazon’s Thursday Night Football deal might signal how live sports will be distributed in the future. As live sports diversify their distribution channels from exclusively on-air to online platforms, this deal indicates that leagues will continue to pursue more rather than less distribution partners for their game content.
Amazon has bought the rights to stream 10 NFL on Thursday games next season, but they do not have exclusive rights. The price tag for these rights is a cool $50 million, a fivefold increase from the $10 million Twitter paid last season for a similarly structured deal. The deal represents an important step towards Amazon’s stated aim of being a premiere live sports distributor.
Amazon will stream the coverage of 5 CBS and 5 NBC broadcast games to it’s Prime members at no additional cost. CBS and NBC can stream their broadcasts as well. Verizon’s wireless customers can also stream the games. Amazon will receive a portion of the ad slots to sell themselves, while other slots will be taken by broadcast partners.
As broadcast rights pricing for live sports content is stabilizing, competition is heating up for digital streaming rights. By leveraging their Prime membership base and deep relationship marketing tools at it’s disposal, Amazon’s deal has the potential of increasing unique user inventory in live streaming sports.
Amazon joins an increasingly crowded field competing for digital streaming rights to live sports content. For example, Facebook is reportedly in advanced talks with Major League Baseball to live stream on game per week next season.
Live sports attract real-time viewers and real scale in ad spend. From a content perspective, acquiring the digital rights to live sports, particularly the higher profile leagues, is a win for Amazon. Whether a $50 million dollar investment makes sense for their balance sheet long term remains to be determined.