Amazon has also sought live game rights from various other right holders, from the NBA to soccer and surfing leagues. With some, it has even raised the idea of creating a premium sports package that would be offered as an add-on for Prime members, The Wall Street Journal reported in November.
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Why The NFL Has Given Up On Twitter And Embraced Amazon
Amazon have paid 3.4 x the TV network’s rate per viewer because of a double fold strategy. On the one hand, they need to diversify their video offering to attract mainstream TV consumers, and integrating an iconic premium sports brand (albeit in truncated form) is a great way to advertise their desire to move towards a more balanced TV-like experience. A premium sports offering is crucial to laying the ground work to offering a future skinny bundle deal to entice existing traditional pay-TV subscribers. An example of this is competitor Google’s imminent YouTube TV launch, which will include 5 sport channels in its initial channel offerings.
The second key reason why Amazon has agreed to pay a premium for these rights is the opportunity to experiment with integrated next generation video advertising. As part of the rights deal, Amazon gets the rights to sell 2 minutes of each hour’s worth of advertising on the deal. As well as conventionally placing Amazon originals ads, Amazon will be exploring delivering dynamic TV ads (ads tailored to each Amazon Prime user based upon their user history on the site). This makes buying ad space on Amazon’s video platform far more valuable to marketers than the cable or satellite alternative. As well as this, Amazon will be looking to integrate its dynamic ad delivery with the Echo, its potentially hugely disruptive voice technology platform. Although voice technology has previously had several false dawns, Amazon’s Alexa interface on the Echo has proven already to be an in-demand digital home utility device- with holiday sales significantly outperforming expectations. Integration between dynamic video ad insertion and Alexa search and execution (imagine serving an exclusive food order discount for orders placed through Amazon during the live NFL game.)