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What does Amazon’s live streaming mean for sports rights?

As you know at PrettyGreen we love our sport as much as we love our entertainment, and today, the e-commerce kingpin and technology giant, Amazon, will broadcast its first live-stream of 10 NFL “Thursday Night Football” games to customers worldwide, this makes us happy especially as it’s opening with a classic showdown between the Chicago Bears and the Green Bay Packers.  Amazon will attempt to successfully enter the live sports broadcasting business, which must make traditional broadcasters worried (especially given what they’ve managed to achieve in every other market they’ve moved into).

 

With NFL football representing the most valuable TV property on the market, described as the “gold standard” of sports by Jim DeLorenzo (Head of Sport for Amazon Video), Amazon is hopeful that the new partnership can help lure in new Prime customers, especially across international markets such as Australia and New Zealand. Amazon will only make the games available to Prime Video members and is planning on slotting in its own adverts throughout.

 

The price tag has been widely reported at $50 million for the NFL rights, five times what Twitter paid last year for the same content, however, considerably less than the $450 million being paid by CBS and NBC to broadcast the same games on traditional television. In this lucrative grab, Amazon has shown that it is willing to move-up the ladder of premium entertainment and target one of the biggest and most expensive sports property in the world.

 

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This bold entrance reflects a paradigm shift in the current diversification of sports rights, and accumulation of multiple viewing platforms, that is representative of a wider convergence of global media players. As Amazon, Twitter and Facebook begin to break into this space of live sports broadcasting, waves of uncertainty and an uneasy tension surrounds the speculative future role of traditional broadcasters such as Sky, BBC, ESPN, NBC and CBS.

 

An analysis of the state of sports broadcasting carried out by Nielsen identified significant audience trends that provide evidence behind the substantial rise of digital media live-streaming over the last few years. As the demographic watching live sports on the TV gets older in the US, younger fans more frequently turn to social media to watch the games. The audience of NBC’s “Sunday Night Football” games in the first two weeks of the NFL season declined by 7% last year, while in the UK Premier League viewing on Sky hit a seven-year low in 2016.

 

Suggestions are flying around that broadcasters are increasingly falling out of love with sports, as fan consumption seemingly begins to dictate a move away from traditional broadcasting. However, whilst this global growth of digital alternatives could represent a ticking time bomb, the game certainly isn’t up for traditional networks. As reasoned by Kurt Wagner, in the grand scheme of live sports viewing, digital audiences in 2016 were still only a fraction of the total viewing figures. Last year NFL games still brought in an average of nearly 15 million viewers per week on CBS, in comparison to Twitter averaging a mere 369,000 viewers combined across all digital streams.

 

Although the arms race for the broadcast rights to sporting events will only grow hotter over the coming years, traditional broadcasters will continue to hold considerable power as a live-streaming platform. At PrettyGreen, we believe that digital media should look to complement rather than replace traditional broadcasters, to allow for more positive and innovative partnerships to flourish and evolve over time. We’ll be watching with interest to see  how this touches down.