Amazon Strikes a Deal with the NFL for TNF Rights

The world’s most valuable retailer increased its portfolio yet again becoming the first exclusive streaming partner with the NFL. The 11-year $1 billion contract will make Amazon Prime Video the official home of Thursday Night Football beginning in 2023. This new deal shines a light on the changing TV viewing habits over the last 10 years and how the sports industry is evolving to address those changes.

A few metrics from last year:

  • The 2020 NFL Season averaged 15 million Nielsen viewers, down 7% from the previous year.
  • Amazon’s first exclusive in season game on December 26 2020 generated an estimated 4.8 million viewers, the highest digital viewership ever for an NFL regular season game.
  • In Q3 2020, streaming video accounted for 25% of total TV usage; of that streaming content, 8% was attributed to Amazon Prime video.

As major sports league broadcast contracts approach their expiration, leagues are recognizing the viewing changes by re-evaluating their broadcast contracts and adjusting their partnerships. Streaming is the future of TV, and some might argue the future is already here.

What about commercials, you might ask? Amazon Prime Video is a paid non ad supported subscription, so commercials are a missing piece. Amazon is promising a viewership experience with pre-game, halftime, and post-game content. Is this new partnership going to open the gate for advertising inside the walled garden? More to come on that.

For the industry, the fragmentation of programming continues. Networks will inevitably charge cable partners more to carry their games which will result in higher fees for the consumer and a subscription requirement to multiple streaming platforms to see the NFL season in its entirety. Between network channels, Amazon Prime Video, ESPN+, Peacock, Paramount+, and Cable networks (Nickelodeon), the cost to watch an entire NFL season may continue to increase over time.

This could drive away casual NFL fans who were once inclined to watch random games without paying a premium. Additionally, as streaming increases—particularly in non-ad channels like Amazon Prime, it could change the face of advertising within NFL games.

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