A few months ago, Amazon won the bid to stream 10 Thursday Night Football games. Amazon bid $50 million for the right to stream games on Amazon Prime. Twitter paid $10 million the year before. The company is not producing the game nor do they have their own media personalities announcing the game. It’s simply a distribution play. But, it’s a distribution play that could have far-reaching implications for the future of how fans consume content and deal with ads in the future.
Streaming content has been a buzzword in the media industry for a few years now. In reality, it’s a west of the 405, east of the Hudson phenomenon. It still hasn’t totally caught on, but the market is trending that way. The NFL knows this and has been experimenting with streaming partners over the past few years. Yahoo! streams games from London. Twitter had streaming rights last year. This year Amazon is the test case, and Amazon can truly provide the league and its advertisers some real return on investment.
This is the first time an online-retailer that just so happens to have a media distribution group is partnering with the NFL. That means there are new ways for the advertisers and retailers to target fans. This could create a complete change in targeted advertising.
First, there will be generic commercials. Amazon should — and probably will, but we don’t officially know until the stream airs tonight — have clickable ads. Fans see an advertisement, click here to buy on Amazon. That’s a simple conversion rate, and it’s a data point that the NFL can go to advertisers with and say that they actually convert viewers into customers.
Second, there may be targeted advertising. Amazon should — and probably will — push ads based on people’s Amazon Prime profiles and purchasing habits. Theoretically, that makes advertising more effective. The NFL can then go to potential advertisers and explain the benefits and increased conversion rate to new or potential sponsors. Advertisers can get more return based on specific targeted ads.
Third, Amazon will have a treasure trove of data, analytics, and demographic information to use for themselves and share with the league. Amazon Prime members are willfully giving up their location, age, purchasing habits, and that doesn’t take into account things like Amazon being able to actively track active viewing numbers — through interaction with the website and stream — and any other data that comes through the computer. The NFL will know when people click in and out of their content. Amazon will know what is the best time to engage with a fan. The data is much more robust than trying to figure out what a person is doing watching on television.
The NFL has television deals with all their major network partners until 2021. Large changes aren’t coming, but they are doing these type of tests to see what is most effective moving forward. Streaming partners also want to know what type of ROI they will receive if they actually invest in live sports content. Amazon, Google, and Apple have more than enough money to effectively outbid a traditional television sponsor for content. Cash is not a problem for these companies. Amazon’s Thursday night test run could portend a larger change in the NFL’s distribution ecosystem. Tonight may be the start of something big.