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All Contents © 2017The Kiplinger Washington Editors
By Brad Moon
| April 12, 2017
Last year, the National Football League embraced online streaming, broadcasting 10 primetime Thursday Night Football games on Twitter Inc. (TWTR). The league is back with Thursday evening streaming for 2017, but the price paid to be the host has gone up significantly, and the platform has changed. This year, Amazon.com, Inc. (AMZN) will be streaming TNF as a perk exclusive to Amazon Prime members.
Amazon is doubling down on NFL football, after green-lighting a second season of its All or Nothing NFL series for 2017. To snag Thursday Night Football, the company shelled out $50 million, five times the fee paid in 2016 by Twitter.
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Despite ongoing controversies including concussions and high profile crimes involving players, professional football remains America’s favorite sport. 185 million Americans say they are fans. That kind of popularity makes selling broadcasting rights to its games very lucrative for the NFL.
Take Thursday Night Football, the league’s least popular offering.
Despite grumbling about poor quality games and rumors that it might nix the weekday games all together, TNF broadcast rights are expensive. Last year, CBS Corporation (CBS) and NBC reportedly paid a combined $450 million for two seasons of TNF, with each network getting five of the ten Thursday games for 2016 and 2017. That works out to $45 million per game for the broadcast rights. In addition, streaming NFL football rights for the 10 Thursday night games in 2016 were sold to Twitter for $10 million.
For 2017, CBS and NBC will be going up against AMZN. The online retailer is paying $50 million for the rights to stream the 10-game NFL fall Thursday Night Football schedule. And Amazon is using it as yet another freebie to lure more Amazon Prime subscribers.
According to Recode, AMZN gets the right to sell ad slots for the games it streams to help offset that investment, although Amazon says it will also use the time to push its other video offerings.
It’s worth noting that Verizon Communications Inc. (VZ) also has a streaming deal with the league. Verizon’s agreement lets it offer its wireless subscribers streaming NFL football games — including Thursday Night Football — but only on their smartphone. That four-year deal (starting in 2014) was worth $1 billion.
Thursday Night Football isn’t AMZN’s first partnership with the NFL. In 2015, it launched the Amazon Prime series All or Nothing, produced by NFL Films. That show followed the Arizona Cardinals over the course of a season. According to AMZN, this was its highest rated original series ever, and it’s bringing it back for a second season.
For 2017, All or Nothing will follow the NFL’s Los Angeles Rams for the 2016 season.
For football fans, that makes Amazon Prime a big deal. Two seasons of All or Nothing, and now Thursday Night Football, are nice incentives for anyone interested in streaming NFL football to their smartphone, tablet or Amazon Fire TV.
AMZN continues to make its Amazon Prime membership a compelling buy — whether members pay annually, or by the month. Benefits include free two-day shipping, Prime Now two-hour delivery on thousands of products, Prime Music (plus discounted membership to Amazon Music Unlimited), Prime Reading for the Kindle and Prime Video. Now that Prime Video goes beyond movies and TV episodes to include live streaming NFL games, Amazon Prime is an even bigger draw.
Amazon is estimated to have 65 million or more Amazon Prime members already. Each one of those memberships increases the chances of Amazon selling them more retail goods, boosting its revenue. Yes, 65 million is a lot, but getting new members to subscribe is getting tougher.
If AMZN can draw in some of professional football’s 185 million U.S. fans by offering live streaming NFL football as yet another Prime membership perk, the $50 million cost is likely to pay off for Amazon’s bottom line.
This article is from Brad Moon of InvestorPlace. As of this writing, he held none of the aforementioned securities.
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