(Bloomberg) – When the regular season of the National Football League starts on Thursday, millions of fans will be seated in their seats to watch America’s biggest and richest sport. But a week later, another multi-billion dollar match will appear.

From September 15, viewers wishing to watch “Toursday Night Football” will need to sign in to Amazon.com Inc.’s Prime Video streaming service. The rivalry between the Los Angeles Chargers and the Kansas City Chiefs is the first game of the regular season under an 11-year $ 13 billion deal that makes Amazon the exclusive home of Thursday Night Football.

For the first time, the streaming service has acquired exclusive, all-season rights to NFL gaming in the United States, and is a big challenge to major networks – such as CBS, ESPN, NBC, and Fox – that have dominated TV for generations. If Amazon can attract millions of viewers and prestigious advertisers whose soccer tends to draw, other leagues like the NBA may be more likely to offer exclusive heavyweight packages online.

“This is a turning point,” said Daniel Cohen, executive vice president of Global Media Rights Consulting at Octagon, a division of advertising giant Interpublic Group of Cos. games as a turning point in sports broadcast. “

Sponsors flock to the NFL because it’s one of the few places you can reach a large live audience – for example, this year’s Super Bowl attracted 112 million viewers in the US, or roughly seven times the number watched by the FIFA World Cup four years earlier.

It is also the last stand of the network. While movies and series have moved on to streaming, people still need cable or satellite TV to watch most live sporting events. Sport accounted for nearly all of the top 100 most watched TV broadcasts last year, with professional football alone accounting for 75 of them. With the NFL deal in hand, Amazon is able to take over a portion of the US $ 66 billion TV advertising market.

In the past few years, Amazon and Apple Inc. began buying their way into this exclusive club by acquiring rights to baseball, football, tennis and other sports around the world. But these offers were mostly for partial packages or smaller markets.

Thursday Night Football gave Amazon the chance to get into the big game. The league’s three biggest partners, CBS, NBC and Fox, all aired on Thursday nights and found it hard to make money, in part because the league tended to keep them in less desirable matches. Amazon broadcast Thursday’s NFL games, which were also broadcast on the NFL and Fox networks. But he never had an NFL package to himself.

The company made early advances in streaming sports in Europe. Offers are shorter there than in the US, which creates more opportunities for newcomers. Amazon has acquired the streaming rights for the US Open tennis tournament in the UK and Ireland and acquired the rights to the Premier League in the UK as well as the Champions League football tournament in the UK, Italy and Germany.

In the US, Amazon started showing some exclusive New York Yankees games and became the streaming home of Seattle Sounders football. However, it was harder to convince major sports leagues to entrust a multi-billion dollar media streaming service.

As the NFL prepared to look for a new round of media deals, Marie Donoghue, Amazon’s vice president of global sports films, set out to persuade her bosses to make a big bid. An almost 20-year-old ESPN veteran hired by Amazon in 2018 produced a document outlining all the reasons why the NFL laws would benefit the company and its customers.

“We said let’s step back and look at it differently,” remembers Donoghue. “Let’s look at it as a unique opportunity for a decade to create game viewing for tens of millions of fans.”

Amazon has long been investing in entertainment to drive customers into its Prime business. Prime members pay $ 139 a year for faster, free shipping as well as access to video and music services. They shop more than people who are not Prime customers.

In March 2021, Amazon agreed to pay about $ 1.2 billion a year for the exclusive rights to Thursday Night Football – an 80% increase over Fox Corp. paid under a previous contract, but pay less than other networks for Sunday and Monday time slots. Not long after signing, the NFL added another wrinkle: the league ended Thursday night with Fox after the 2021 season, a year earlier than expected.

This meant that Amazon had to be ready a year earlier. Both CEO Andy Jassy and CEO Jeff Bezos have signed the deal.

The show is hosted by Fred Gaudelli, who has produced prime-time soccer for over 30 years. Longtime broadcaster Al Michaels will take care of the game after the game and Kirk Herbstreit, best known for his analyzes of college football, will provide colorful comments.

Gaudelli will use most of the standard football broadcast features including the pre-game show, sideline reporters and half-time show. Several former NFL players, including Ryan Fitzpatrick and Richard Sherman, will serve as analysts before, during and after the matches. But he also knows Amazon needs to do more.

On its main channel, Amazon will be superimposing game statistics and updates using what is known as X-Ray technology. It will offer an alternative stream for a younger audience, hosted by a YouTube personal group called Dude Perfect, and will also feature games on Twitch, an Amazon-owned site popular with video game enthusiasts.

“I know the NFL audience, especially the prime-time audience, very well,” said Gaudelli. “If you went out there and just threw something against the wall to see what would stick, I thought it wouldn’t work. I didn’t feel like being a part of it. “

The first challenge for Amazon will be making sure people know where to find “Thursday Night Soccer”. The company plans to buy advertisements on cable TV guides to remind fans that Thursday’s games are no longer on TV.

Amazon has also made a deal with DirecTV to ensure games will continue to be available in bars and restaurants, and fans from their hometown will be able to watch their teams at local stations as they play on Thursday nights. In addition, the company plans to promote broadcasts on everything from the Amazon.com homepage to the cardboard boxes that Prime subscribers have delivered to their homes.

Another concern is the hassle-free streaming of live sports events. In 2018, Amazon had problems broadcasting the US Open tennis tournament in the UK, and fans complained about poor image quality and functionality. Live events are more prone to crashes than movies and TV shows on demand, and fans will be angry if any important moments are interrupted.

“Even if Amazon does everything it can, they will still have problems,” said Dan Rayburn, streaming media analyst.

Amazon has spent months preparing, communicating with ISPs to make sure they are ready for the expected increase in traffic. This will reduce the image quality for low bandwidth fans to ensure their stream does not crash. It has also hired more customer service representatives to raise unavoidable complaints on social media.

“I don’t think any company is more prepared than we are to deal with this kind of scale and these kinds of challenges,” said Jay Marine, Amazon veteran and former Bezos technical advisor who currently oversees Amazon’s sports business. “That’s what we’re good at.”

For Amazon, NFL success this season can take many forms. May sell more Prime subscriptions as game viewing requires registration. It can also help you sell other Amazon products. A recent ad urged fans to “experience each game to its fullest” by purchasing Amazon’s Fire TV Stick, a streaming device. The company’s first preseason game featured several commercials for Amazon products and shows, including The Lord of the Rings: The Rings of Power, a much-anticipated series that the company had produced.

“We are confident that we will not only see a lot of people signing up for Prime, but also exposed to other parts of the Prime membership,” said Marine. He added: “We have a long-term horizon. Although we are focusing on the first game, the success that is really going to be “How are we doing in three, five, seven, 11 years from now?” Half my brain is focused there.

Amazon also wants to see how NFL games benefit its advertising industry, which generates around $ 30 billion in revenue annually and already outperforms the competition on traditional TV.

According to an expert on the subject, the company charges around $ 600,000 for a 30-second spot, more than the roughly $ 500,000 Fox was looking for last year. Amazon told advertisers that it had tons of data on Prime subscribers and could run targeted ads that lead to purchases, the person who asked for non-identification said when discussing negotiations with sponsors.

Amazon guarantees advertisers that it will reach over 12 million viewers per game, up from around 16.4 million last year, the person said. These forecasts were previously reported by the Wall Street Journal. According to the company, around 80 million households have watched Amazon Prime Video at least once in the last year, roughly the same number as subscribers to its pay-TV service.

The arrival of Amazon and Apple in the world of sports media has been celebrated by leagues whose media rights become more valuable as there are more bidders. It worries media companies that now have to compete with tech giants who have more money and different business goals.

By mid-year, Amazon had more than $ 60 billion in cash and securities on its books, more than double the ABC / ESPN owner Walt Disney Co., parent of CBS Paramount Global, parent of NBC Comcast Corp. and Fox. Tech titans like Amazon and Apple could be willing to lose billions of dollars on sports if they sell more iPhones and diapers.

Recent negotiations show that most sports leagues are not yet ready to go all-in with streaming services. Amazon lost the US Champions League soccer bidding war to CBS and failed to win the Big Ten conference rights despite reportedly offering more than CBS and NBC. ESPN beat Amazon for Formula 1 racing rights, which Netflix Inc. was also striving for. Industry watchers say Amazon could have won at least one of these deals if it had already proven NFL broadcasts a success.

Amazon has a few more chances to add to its sports portfolio. It competes with Apple and Google for the NFL Sunday Ticket, a package of non-market games that DirecTV has long been offering. And he can go for another great sporting law on the horizon: the NBA. The league will want big fee increases from its partners ESPN and Warner Bros. Discovery Inc., which may result in a third packet for the streaming service.

“The NBA is interesting to anyone in the sports world,” said Marine. Amazon is different from other companies, he added. When he spends billions on sports, he is ready to wait years to pay.

“There is a misconception that if you are a company of a certain size, you will necessarily be irrational,” said Marine. “We are actually very rational. But we are willing to bet and bet on inventions and the future. “

© 2022 Bloomberg LP

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