Three reasons why Amazon buying NFL rights is the most significant moment yet for sport's live streaming revolution

Joe Hall
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Into the future? Amazon's $50m deal to show NFL could off clues about the future of sports consumption (Source: Getty)

We read news on our phones, binge-watch TV shows on our laptop and stream our music from the internet.

Live sport on TV is yet to be disrupted in a similar manner, but Amazon’s $50m deal to live stream 10 Thursday night NFL games — a significant increase on the $10m Twitter paid for the same package last year — might be the most significant moment yet in sport’s adjustment to an age of digitised, atomised content.

Amidst reports of shrinking TV audiences for some of sport’s biggest brands — Olympics, the NFL, the Premier League — predicting a future when the exclusive rights to such competitions are purchased not by telecoms giants but by the most-used apps on your smartphone has become an almost cliched conversation point amongst industry insiders and commentators.

Twitter’s viewing figures for the NFL last year were not impressive. On average, only 2.7m people on the worldwide platform watched at least a few seconds of a game compared to 16m on traditional TV.

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Similarly, BT Sport’s live stream of last year’s Champions League final on YouTube was watched by 1.8m people compared to just 4.3m on its TV channel.

Yet while those early experiments suggest that the prospect of tech companies muscling out traditional broadcasters may not be imminent, Amazon’s experience could be the closest thing to the “game changer” that many have prophesied.

1) Amazon is already a content destination

Twitter might demand your attention when in the line at Pret, but it is not a platform you make a date for an evening on the sofa with.

In contrast Amazon — through its £7.99-per-month Prime subscription service that comes with unlimited streaming of a massive library of films, TV and music — already mimics the service of a traditional broadcaster.

While NFL fans watching live through Twitter would have had to hook up their phones or laptop to a monitor through a HDMI cable in order to mimic the experience of setting in front of the TV, Amazon Fire Stick users will just flick over with the remote as they’ve always done.

2) Sports drive subscriptions

With the Thursday night NFL games also to be broadcast live on CBS and NBC (as well as Sky Sports here in the UK), Amazon’s current deal is unlikely to drive a massive upsurge in the rate of Prime subscriber growth.

Yet if reports of 65m subscribers are correct, Amazon only needs to increase its subscribers by seven per cent in the next year to cover the $50m cost.

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And if the company notices strong interest in live sport on its platform, it could be persuaded to seriously enter the market for the kind of larger rights package that pay-TV companies have used to drive subscriptions of their own (it may also convince leagues such as the Premier League which don't sell live streaming rights separately to repackage their offering).

Neither Twitter, YouTube or Facebook, whose features are nearly always free to all users, has a similar motivation to enter the bruising bidding wars.

3) Amazon has the means to buy more

Another pertinent difference between Amazon and Twitter is that while the latter loses money, the former makes profit.

Amazon made a $749m profit on revenues of $43.7bn in the fourth quarter of 2016, while Twitter posted a net loss of $167m, on revenue of $717m.

But don’t expect a mass migration to digital just yet

If the future of live sport consumption is to be on digital platforms, it will not be a quick transition away from broadcasters — even if Amazon’s NFL tie-up is a success.

After all, established brands such as the NFL and the Premier League are currently making more money than ever before atop the back of broadcasting deals.

The existing model has served both broadcasters and rights holders so well that neither will relinquish control lightly.

Even in spite of reportedly disappointing viewing figures for European football last season, BT Sport was still prepared to pay £1.2bn for exclusive rights until the 2020/21 season — a £313m increase on its current deal.

And with mega brands such as the NFL and the Premier League attracting increasing interest from international broadcasters — the latter generated roughly £3bn from international broadcasters for its current cycle of rights — even a drop in domestic deals may not necessarily result in lower TV revenues.

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