Are you ready for some football? Amazon sure is—the online retailer has inked a one-year agreement with the National Football League (NFL) to stream 10 Thursday night games to its Prime subscribers. It is paying $50 million for the privilege, which is 500 percent more than the NFL's prior agreement with Twitter over streaming rights, and for the same number of games.
Twitter got off to a fast start last year when nearly a quarter of a million viewers tuned into its first streamed NFL game featuring the New York Jets and Buffalo Bills. Sure, that was a drop in the bucket compared to the 15.4 million that watched the same game through CBS, but for a first shot on social media, the number of viewers was pretty impressive. Be that as it may, Amazon brought a bigger pile of chips to the table this year.
Amazon did not just beat out Twitter, but also Google and Facebook, both of which were interested in obtaining streaming rights. And though it is a costly deal, Amazon is probably figuring it can recoup its investment by selling more Prime subscriptions, which run $99 per year if paid in one lump sum, or $10.99 per month. The ones that do jump on board Prime because of the ability to stream NFL games are likely to take advantage of the program's other perks, most notably free two-day shipping on millions of items. So while this is a costly and aggressive expense for Amazon, it has the potential to pay off in a big way.
Getting into sports also creates some separation between Amazon's Prime Video service and competitors such as Netflix and Hulu. The latter two have stayed away from sports deals and other types of live content (though if you're a Hulu subscriber, check out the documentary series Behind the Mask, which takes you into the world of sports mascots).
"We're focused on bringing our customers what they want to watch, Prime members want the NFL," said Amazon senior vice president Jeff Blackburn.
Amazon also feels that the large audience the NFL attracts will give the online retailer many new eyeballs for its other content. That is on top of the sports gear Amazon aims to sell, all of which could help offset its big investment. Plus it further establishes Amazon as a major player in streaming content—it's worth noting that Amazon purchased video game streaming site Twitch for $970 million just three years ago.