The National Football League (NFL) announced yesterday that Amazon is paying roughly $1 billion for exclusive rights to Thursday Night Football games, taking over from Fox Sports starting in 2023 and running for a decade.
"The pact is by far Amazon’s biggest play to date in streaming TV," the Wall Street Journal writes, and "having worked its way to third place in the digital advertising business, chasing only Google and Facebook, it is a move that could help Amazon secure a commanding position in the future of TV ad sales.
"Amazon said adding exclusive NFL games will encourage people to sample its original content. But as pandemic lockdowns turbocharge the growth of streaming TV, the heir apparent to traditional TV’s $70 billion ad market, Amazon also has been striving to expand its streaming offerings for marketers."
The Journal goes on: "Amazon’s streaming-TV ad sales grew faster in 2020 than its more-established ad segments such as search and display, albeit from a much smaller base, according to a person familiar with the company’s ad business. Streaming TV now comprises roughly 15% to 20% of two top ad-buying agencies’ spending with Amazon, executives at the firms said.
"The business includes ads Amazon sells on its own streaming services, such as IMDb TV; ad inventory it sells in other apps it carries on its Fire TV platform; and ad sales rights for live sports it already carries."
- KC's View:
Two things here.
First, Amazon may be writing a check for a billion dollars, but it clearly is hoping that it is going to be able to recoup most of that through ad dollars … and it will have the unique ability to create ad bundling packages that will connect to all its other platforms. That's going to be a powerful proposition.
Second, the power of streaming continues to demonstrate itself. Variety reported yesterday that "for the first time ever, subscriptions to streaming services surpassed one billion, reaching 1.1 billion globally."
Now, a lot of that has to do with the pandemic; movie theater revenues plummeted during the same period. But new habits are being created, and Amazon is a big part of that.