This depends on whether rights such as american football and tennis can represent a significant added value in the race with Netflix. That is why the e-commerce giant has been hunting for sports rights in the past few months. The targets: sports with international reputations such as rugby, golf and tennis.
These sports could drive subscriptions and traffic figures in a market where Amazon Prime is behind Netflix. According to comScore, Prime’s share of the total OTT television audience in the US was seven percent. Netflix has 40 percent.
According to Digiday, Amazon knew that it had to develop to content in order to continue to grow. Various economists and data experts are investigating the impact Amazon Prime Video has on consumer behavior. On the company side, people using PrimeVideo renew their Prime memberships and convert them at a high rate after trial offers.
New sports rights a vehicle for Amazon Prime?
Whoever invests millions in international sports rights must be sure to convince enough users to make subscriptions. Finally, Amazon will only drive forward activities that contribute to the desired ROI.
Golf, cricket and Formula 1 all want to reach a larger audience. Amazon seems like a good bet for them. With all its market power, the e-commerce giant is not yet an established sports station. That is why Amazon, Facebook and the respective sportsmen try to keep the risk low initially. Digiday makes an interesting comparison. Sky will pay about 1.5 billion euros to broadcast the Premier League between 2016 and 2019. Amazon pays about eleven million a year for five years for ATP tennis.
These figures show that Amazon is not yet ready to invest in absolute top rights. Amazon is likely to include further sports rights in its portfolio. But the focus is first on the success of the broadcast of NFL Thursday Night Football. The importance of the ATP deal as part of Amazon’s video strategy is still unclear. The deal includes the ATP World Tour Masters 1000 and Masters 500, beginning in 2019. Of course, the agreement could simply be a sales argument for Prime Video. The Digiday experts speculate that sports rights could also lead to “Amazon Channels.”
Revenue trumps reach
Many sports marketing experts believe that Amazon Prime values subscription revenues over reach. Sub-licensing is therefore unthinkable. Joel Seymour-Hyde, SVP of the sports and entertainment agency Octagon, told Digiday: “The No. 1 driver of deals between Amazon and ATP is sales. Amazon may be an innovative partner, but the content will probably be available exclusively to its Prime customers.” A recent example is the exclusive deal between BT Sport and the UEFA Champions League, which has been handled despite complaints from fans and sponsors.
Amazon’s entry into the sports business will not be as disruptive as the company has been in n retail or TV series. Amazon competes with Google, Twitter and Facebook in the still young live-streaming segment. Decisive will be the next large rights calls. In 2021, the rights for the NFL go on sale. The ongoing rights period of the Bundesliga ends in 2021. At the latest, it is clear what role Amazon will play in the sports business.
In 2019/20 the next bid for Premier League rights starts. According to Jim Dowling, Managing Director at Cake, Amazon has to put its money on the big sports. Dowling told campaign: “What would it take for every sports fan in the country to sign up for Prime? Just to be clear, the answer isn’t tennis.“