in the last few years Amazon (AMZN 2.88%) is slowly adding content to its Prime Video service, with an ever-growing list of live sports programming. His first such deal came in 2017, when Amazon signed a $50 million deal with the National Football League (NFL) over the course of a year, giving him non-exclusive rights to stream 10 productions. gave. thursday night football game.

This was the first of many sports deals, following months of rumors that Amazon was considering exclusive premium sports packages available to Prime subscribers. Now, six years later, that ambition may finally come true.

Two people sitting on a sofa and talking on their smartphones.

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there is an app for that

Amazon is reportedly working on a standalone streaming app for sports fans, according to The Information, citing “people briefed about the conversation.” It’s not clear if use of the app is included with Prime, or if it charges an extra fee beyond the basic Prime subscription for those who want to watch live sports.

This comes at a time when Amazon is increasingly looking to expand into sports programming. CEO Andy Jassy touched on this issue briefly. new york times At last month’s DealBook Summit, he was asked about the importance of long-term sports rights.

Jassy cites Amazon’s foray thursday night football The Union of European Football Associations (UEFA) Football said: “You will see us continue to invest in sport.” He continued, “Sports is such a unique asset…When you look at the most watched shows each year, sports often make up 75% of those spots.” He said sports programming helped increase Prime subscriptions.

Are you ready for soccer?

Amazon spent a lot of money securing exclusive broadcasting rights thursday night football, pays the NFL about $1 billion a year through 2033. Still, despite the hefty price tag, the company seems to have thrown a touchdown.

In fact, Amazon’s first exclusive broadcast thursday night football It took place in mid-September between the Kansas City Chiefs and the Los Angeles Chargers.

Perhaps more importantly, according to an internal memo obtained by CNBC, it attracted a record number of Prime subscribers during the intense three-hour period, surpassing similar periods on Prime Day, Black Friday and Cyber ​​Monday. “By any means, thursday night football It was a huge success watching on Prime Video,” wrote Jay Marine, Global Head of Sports at Amazon.

Amazon is also working on creating additional sports-focused content.The company recently launched sports talk, “New Original Sports Talk Programming Block,” which airs Monday through Friday from 8am to 8pm. The show is available on Prime, Freevee (the company’s ad-supported streaming service), and Amp (Amazon’s live radio app without a Prime membership). His programming slate includes seven daily shows dedicated to sports.

show me money

Amazon spends billions of dollars to bring a variety of live sports programming to subscribers to its Prime Video Streaming service, who pay $139 a year or $14.99 a month. Amazon is able to recoup some of its large investment. The move will also “clean up Amazon’s flagship Prime Video app,” according to the report.

Amazon closed out 2021 with 200 million Prime subscribers, but it remains to be seen how many will be willing to pay extra over Prime’s cost. Note, however, that Amazon has extensive information about how customers use Prime Video, such as what sports shows they watch, how long, and how often.

What this means for Amazon investors

More than six years ago, Amazon reportedly toyed with the idea of ​​a premium sports package exclusively for Prime subscribers, and even pitched the concept to some of the sports leagues it was negotiating with at the time. Additionally, it’s not clear when Amazon will launch a sports app, or if that plan will go through at all.

However, the company can follow the template used for Amazon Music Unlimited. Prime members get access for $8.99/month, while non-Prime members pay a slightly higher $9.99/month. In this way, we can bring sports to a wider audience and recoup some of the luxury spending on sports content.

don’t forget the flywheel

Amazon’s growth flywheel leverages positive customer experiences to drive traffic to its platform.Simply put, anything that encourages potential subscribers to sign up is a good thing. Plus, history shows that Prime members tend to buy many They spend nearly $2,000 a year on Amazon’s e-commerce platform, about four times more than non-members.

Former CEO Jeff Bezos famously said, “When you win a Golden Globe, you sell more shoes.” This concept applies equally to popular sports content.

If the company finally debuts a sports streaming app, it would be an overall win for Amazon and its investors.

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