Data and eCommerce are driving Amazon’s sport strategy
When it comes to sport Amazon is not the goose to lay the golden eggs that many people expected. Instead it has cleverly positioned itself to get what it wants from sport – more sales opportunities and a foothold in the data market.
Sports administrators used to get very excited about Amazon Prime. Here was a company with very deep pockets who would shortly move into sport broadcasting and push TV rights negotiations through the roof.
Unfortunately for the administrators, Amazon turned out to be a very different proposition. While their sports rights strategy is hard to work out, it is clear that they are selective and that their sports offering is more closely linked to eCommerce than broadcasting.
Let’s look at their selective strategy for TV rights.
- They will pay the NFL around $1.3bn per year for exclusive rights to Thursday night football. While that sounds a lot, it is still only 13% of the total NFL TV deal.
- Amazon shows two full game weeks of English Premier League in December, plus two other games for £30m – only 2% of the total Premier league deal.
- They paid around £20m for the Autumn Nations Cup in rugby, which is around 40% of what BBC and ITV typically pay for the Six Nations, but it did give them 80% of all the games.
- They will be showing 21 New Yankees games in the 2021 season, although the value is unknown.
- Amazon signed a deal in 2020 for exclusive rights to show New Zealand cricket matches in India – the main reason being two series between New Zealand and India that will now be shown on Amazon.
What these deals have in common is buying small stakes or spending small amounts of money to secure a seat at the table of some of the biggest sport brands. The key word here is ‘small’ and this is definitely not the inflation busting activities many sports were hoping for.
So what is the strategy?
TV rights for Amazon are more closely aligned to their eCommerce offerings and Amazon Prime subscriptions. It is telling that a few days after the NFL deal was announced a separate press release detailed how thousands of official NFL products will now be available on Amazon.
Similarly, an Autumn rugby tournament and December date for Premier League matches is well timed for the Christmas rush. This supports sales on the site and generates new or returning subscribers for Amazon Prime – the company reported 35% growth in subscribers over the fourth quarter of 2019 following its exclusive live-streaming of top-flight football.
It’s clear that Amazon didn’t behave the way many sports thought (or hoped) they might. Maybe these sports should have spent more time trying to work out how Amazon thinks. Even with Prime, it is not a traditional sports broadcaster and can afford to be more opportunistic in what it bids for. It also views any TV deals in terms of what value it will bring to customers or subscribers.
It seems likely that Amazon will continue its opportunistic approach to TV rights, picking up deals that allow it to associate with the biggest sport brands and looking for packages with a big eCommerce upside. Sports interested in attracting Amazon should consider how they can package their rights to deliver the best impact in eCommerce, for example with exclusive content or merchandise for a particular tournament.
Data is where Amazon wants to dominate
While sport broadcasting is unlikely to see an Amazon domination, the same might not be true for data. AWS Sports is currently working with the NFL, NHL, Six Nations rugby, Bundesliga, PGA, and Formula 1. services include Internet of Things sensors for real time data, machine learning to produce the NFL’s Next Gen Stats, and high-performance computing in designing Formula 1 cars.
As more opportunities to use data in different ways emerge in sport, you would expect to see Amazon leading the field. It would be no surprise to see them picking up a few more major sport clients along the way too.
In the end it is likely to be the sports paying Amazon rather than Amazon paying the sports.
Sport.dat 