The sports industry is engaged in a grand digital experiment with technology platforms. The latest test was announced last week, when the National Football League (NFL) sold its 10-game Thursday Night Football digital package to Amazon. As when Twitter held it last year, the games will be simulcast on network (CBS or NBC) and cable (NFL Network) television. However, unlike the free access Twitter offered, only Amazon Prime members will be able to watch Thursday night games this year. Given Prime’s non-exclusivity and pay wall, if Thursday Night Football on Amazon leads to increases in year-over-year viewership and contributes to the growth of Prime subscribers, the NFL and Amazon executives could call it a win.
As encouraging as that result would be, this experiment is really about the early 2020s, which is when the NFL will be making major decisions about distributors for its most valuable rights packages. How can tech companies like Amazon, Facebook, Google, Apple, Netflix, and Twitter become big rights winners at that point? And what can traditional broadcasters do now to avoid being left behind? This long-term sports rights game will be won through reach and revenue.
When sports leagues sell their live distribution rights, they want to maximize both reach and revenue. If technology companies can help leagues achieve these goals more effectively than their existing television partners, the sports media landscape will look dramatically different a decade from now.
Tech firms must prove their reach
There’s never been any doubt as to whether technology companies have the resources to invest in sports rights. The question has been whether such moves made long-term strategic sense for both parties. As technology platforms launch and grow competitive video businesses, they are beginning to put to rest concerns about their suitability as distribution partners, as they now have clear incentives to make rights deals successful over the long term.