In another step towards becoming a live sports broadcaster yesterday Amazon announced it has signed a three year deal to carry English Premier League soccer games. This move follows Amazon’s renewal of a deal with the NFL to live stream football games. So is Amazon set on dominating the world of live sports broadcasts? Unlike traditional networks, their motivation isn’t quite so straightforward.
Instead of trying to make money by selling ads during the games, Amazon is using this exclusive content as a way to drive new Prime subscriptions. As I explained in a post last month, Amazon’s entire TV content strategy revolves around driving new Prime subs, and even evaluates each shows’ ROI on a CPFS (Cost Per First Stream) metric. Amazon’s TV math is simple – the less it costs them to acquire a new first stream, which is a good proxy for a new Prime sub, the better the show’s ROI is. Since the NFL’s CPFS ratio was positive in year one they re-upped with the league, and now they’re testing and learning with other sports too.
Don’t just think Amazon’s sports strategy is confined to leagues and teams – they could run this play (sorry) with literally any live event. Think of the Masters, Grammys, the Kentucky Derby, or dare I say even the Olympics. Look out Bob Costas, Jeff Bezos might be coming up behind you with a pipe Tonya Harding style!