The idea of Amazon streaming live NFL games probably isn’t something that the Seattle-based tech giant considered when it launched more than two decades ago, or even in the past few years, for that matter.
But this is Amazon in 2017: A $425 billion company that is extending its reach far beyond e-commerce and placing a big bet on video content.
The NFL issued a press release on Wednesday that confirmed earlier reports from a day earlier about its new deal with Amazon to livestream 10 Thursday Night Football games next season. Amazon beat out other bidders including Google, Facebook, and Twitter, which inked the same deal last season.
The games will stream on Amazon’s Prime Video app and will be available exclusively to Amazon Prime members, who pay a $99/year fee to belong to the company’s membership program.
So why is Amazon dropping the big bucks to stream live football games? It boils down to adding more video content to its library and increasing the value of its Prime membership program.
Here’s a statement from Jeff Blackburn, senior VP of business development and entertainment at Amazon:
“Our focus is on bringing customers the best premium video programming, when and how they want to watch it. Streaming Thursday Night Football on Prime Video is a great step for us toward that vision, and offers tremendous new value for Prime members around the world. And we’re thrilled to extend our ongoing content relationship with the NFL – the gold standard for sports entertainment – on behalf of our Prime customers.”
Amazon is investing a ton of money in its video services — which are available to Prime members — both with its own original content and for programming rights like the NFL deal. The company doubled its video content spend during the second half of 2016 compared to the same period in 2015; it also nearly tripled its offering of new Amazon original TV shows and movies.
Amazon is also focusing more on sports video content. It has already found success with its original show All or Nothing, which is similar to HBO’s Hard Knocks and takes viewers behind the scenes with an NFL team. Amazon just greenlit a second season for the show, which is available to Prime members.
The $50M price tag for Thursday Night Football isn’t as eye-popping when you look at what Amazon is spending for other content rights — for example, it reportedly paid $250 million to acquire the popular Top Gear show for its Prime audience. Also keep in mind that Amazon posted $43.7 billion in revenue last quarter and continues to see its stock price reach record highs.
However, it’s important to note that Thursday Night Football does not exactly produce the most exciting games. In fact, the league was reportedly talking about axing the Thursday games altogether.
But for Amazon, this represents yet another benefit for Prime members and gives customers another reason to sign up for the program, which offers free 2-day shipping, cloud storage, and many more benefits. There are now an estimated 63 million Prime members in the U.S., making up more than 50 percent of the company’s U.S. customer base.
The NFL streams will also be available to Prime Video members — who can pay monthly subscription fees — internationally in more than 200 countries thanks to Amazon’s expansion of its video service worldwide this past December. The NFL deal gives Amazon another way to expand its Prime membership base abroad in places like India, where it just began offering Prime.
Don’t be surprised if Amazon inks more deals with other sports leagues. The Wall Street Journal reported in November that Amazon was in talks with multiple leagues about live game rights. It noted how Amazon could offer a “premium, exclusive sports package” to those who pay for a Prime membership.
Live sports would be another way for Amazon to set itself apart from other video streaming competitors like Netflix and Hulu. In April, Amazon began offering a monthly $8.99 Prime subscription so members could access its video streaming service. The move was a direct swing at Netflix and its popular monthly subscription plan.
Amazon is also already leading the way for live-streaming of video games, given its $970 million acquisition of Twitch in 2014.
Amazon’s reasons for inking a deal with the NFL certainly differ from Twitter, which made its stream available for free to users around the world. As Recode noted, Twitter now finds itself in a tough position without the NFL deal given its aim to be a digital TV service.