Overpaying for big TV franchises might still be a thing.
Amazon has joined
the hunt, chasing big NFL programming with big money -- $50 million, according to reports, for the live streaming of 10 “Thursday Night Football.” This is around five times what
Twitter paid for the games a year ago -- a total of $10 million -- when the NFL first offered up the package.
As Twitter did a year ago, Amazon will run Thursday night games alongside CBS and
NBC, sharing the traditional linear TV package of games. Cable TV channel NFL Network simulcast the games with the broadcast networks. CBS and NBC paid a combined $450 million for airing those 10
games on traditional linear TV.
Kannan Venkateshar, media analyst of Barclays Capital, says: “NFL essentially used Twitter as a proof of concept last year to validate a new source of
revenues which, while small in absolute terms, is already showing significant inflation and more importantly, bringing additional bidders into the NFL orbit.”
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Google, Twitter and
Facebook all competed for this high-value TV franchise for the upcoming season. For its part, Twitter now says it is still committed to live programming.
A big part of Amazon’s push to
get the NFL package, says one of its executives, comes in using the big NFL viewership to promote its other content.
For Amazon, there is little doubt TV and entertainment continue to be one
of its main retail/business objective -- including its on-demand Amazon Prime Video platform and, perhaps new services, including package of live, linear TV networks.
The big move is seen to
be a big signal -- especially in the new premium digital TV-video space that is expanding beyond its video-on-demand roots. This includes new live, linear TV network packages from DirecTV Now, Sling
TV, YouTube TV and others.
Barclay’s Venkateshar: “While on one level, Amazon’s entry is just a continuation of the present arrangement albeit with a different company in the
mix, we believe Amazon has the potential to be a major disruptor long-term, relative to other OTT entrants.”