As John Ourand of the Sports Business Journal reported first on Tuesday, Amazon has struck oil. The company has landed the NFL’s streaming rights, pulling them away from Twitter after just one season.
According to the report, Amazon will pay a hefty price. The fee secured by Roger Goodell and the NFL is $50 million dollars for the 2017 season, and as part of the agreement, Amazon gains the opportunity to stream 10 Thursday night football games. Those games will also be broadcast on television by NBC and CBS.
To many insiders, the big winner certainly seems to be the NFL, who not only is double dipping by generating revenue from television and digital providers, but also has increased its streaming rights fee by 5x in one year by switching from Twitter to Amazon. However, when you analyze the deal from Amazon’s point of view, it could be very lucrative to them too.
From a business standpoint, Amazon charges $99.00 per year for its Prime subscription service. The company says it will offer the NFL games exclusively to Prime members, and if Amazon can leverage the power of the NFL to generate an additional half million subscribers, it will recover its entire fee.
Keep in mind, Amazon doesn’t just offer prime subscribers the added benefit of NFL programming. The company gives its customers access to quality original movie/television programming, free shipping, and additional discounts and consumer advantages. That’s a lot of value for just under $100.
In 2016, Twitter reportedly gained a global audience of 2.7 million for the 10 NFL Thursday night games it streamed. But when it comes to global reach, familiarity and use, Amazon is a much stronger company than the social media platform. It’s because of that reason that analysts are projecting Amazon could potentially double the digital viewing audience, and gain significant growth for its Prime subscription service.
How it will unfold is anyone’s guess, but given Amazon’s position in the online space, and the NFL’s dominance among sports leagues, this sure seems like a winning combination.