NFL’s Calculated Streaming Bet Pays Off For Amazon’s Many OTHER Businesses

It’s possible that Amazon’s Thursday Night Football debut featured more ads for Amazon ventures than for other companies.

It was hard to keep track after a while. But regardless, the blizzard of self-/cross-promotion demonstrates the real value of Amazon’s $1 billion annual spend for just 15 Thursday-night games per year.

Yes, there were ads by many of the Usual Suspects: frequent NFL advertisers such as Progressive Insurance, Mercedes-Benz, T-Mobile, and Bose. Fan Duel and Draft Kings were among the sports-betting sites, and in California at least, there were ads for one of the two big ballot propositions that would legalize sports betting in the state.

But for every Mercedes or T-Mobile ad, it seemed like there was at least one for a product with a direct Amazon tie. The corporate cousins list was long:

• Audible podcasts and audiobooks

• Short bumpers proclaiming “The New Era of NFL Football is here, on Prime Video”

• Fire TVs, focused on the Omni Series with Alexa voice control

• Alexa virtual assistant being used for other purposes

• AWS cloud services, which not only provide the computer oomph behind the game’s stats but is also the company’s most lucrative division

• Ring alarms/doorbells

• A “Behind the Storefront” ad showing a small business owner leveraging Amazon’s storefront for their company’s warehousing, fulfillment, and shipping needs

• All the big-name movies and series that “deserve a replay,” including The Lord of the Rings: The Rings of Power and the latest James Bond No Time To Die.

• Separate ads promoting specific shows, including The Rings of Power, anti-superhero series The Boys, and an upcoming, Tenet-style cyber thriller series featuring John David Washington called The Peripheral

• A promo for Ron Howard’s Thirteen Lives. The film debuted to uneven reviews in late July and hasn’t been hugely popular.

• A separate segment called “Prime Stories with Audible” that featured bits of audio and video taken from the run-up to the game itself, with a countdown to Game Day

• An early self-promotional segment showed the evolution of watching games on broadcast, then cable, and now streaming

• Also, the virtues of Amazon shopping. Of course.

There were also several explainer ads on how to use various Amazon features to enhance watching the game, which presumably could be use for other Amzaon program.

They include a version of a virtual DVR (tick the “record” setting once and it will capture all the season’s games as they’re played out); how to click into the “X-Ray” stats that spotlight different players and their achievements throughout the game; a Rapid Recap feature for those joining mid-game, and access to multiple streams; and other viewing options (you can switch back and forth without missing any of the game itself) included one featuring social-media stars Dude Perfect and another with deep stats and Madden-style on-screen markers to track the paths of receivers or defenders each play. “New options will be added all season long,” the promo concluded.

That constant flow in cross-/self-promotional spots just wasn't possible for the traditional broadcasters, beyond, say, the days when General Electric owned NBC. But the sheer volume very much suggests that spending $1 billion a year (plus production costs) to promote all its lines of business to millions of people isn’t such a bad deal for Amazon. After all, Amazon owns such big brands as AWS, Audible, Whole Foods, and Ring, among others. Where else could the company acquire a platform like that?

A notable subtext behind this is the league’s calculated bet on a streaming future. It’s not that different from when it moved Monday Night Football from broadcast to cable outlet ESPN, and helped transform the industry.

Beginning in 1980, ESPN spent seven years covering league events such as the draft before finally getting rights for Sunday night games beginning in 1987. In 2006, ESPN took over the marquee Monday Night game, and has been there since. (The Worldwide Leader just invested a reported $165 million to sign Joe Buck and Troy Aikman to announce the games, and saw a third-best-ever 19.8 million viewers tune in across all platforms and languages on the season’s first Monday night).

But it’s easy to forget what a big deal that shift was back then, especially as the league’s broadcast partners worried about the impact of all those viewers switching to cable, and possibly finding out they liked it there.

That shift to cable saw viewership of MNF initially drop by an estimated 25%. But it proved a long-term goldmine for ESPN owner Disney, the league, and the cable industry as a whole. It accelerated cable signups, reduced churn, and justified the huge rights fees the Mouse House received from all the cable operators for every subscriber. ESPN became Disney’s single biggest revenue center.

Cable, of course, also became the great backdoor financier of all those broadcasters, paying billions every year in local retrans fees under must-carry laws forced on them by those politically connected broadcasters.

Now, broadcast, satellite and cable are facing eroding business models. The league isn’t choosing to join them in secular decline. It’s snuggling up to the tech giants much as Amazon’s founder and executive chairman Jeff Bezos did with NFL Commissioner Roger Goodell during the first game.

Expect far more deals with Amazon and other tech giants that don’t need a one-for-one return on investment from the games themselves, a very different value proposition in full view Thursday night.

It’s possible Amazon’s cross-promotion is really a case of making necessity a virtue. Amazon has warned advertisers that it expected another 20%+ drop in viewership in the latest shift to a new distribution platform. Some advertisers may have decided to sit out the game, or the season.

But that won’t be the case for long, given the rapid adoption of connected TVs (one speaker at last week’s Next TV Fall Summit put it succinctly: “No one makes non-smart TVs anymore”). Advertisers are following the eyeballs, and they’ll be on Amazon quickly, if not already. Remember, Amazon earned $31 billion last year, third behind only Google and Meta, in online advertising last year.

And just as that Disney shift from ABC to ESPN enriched the entire cable industry by driving signups, Amazon’s deal likely will drive not only lots of $129/year subscriptions to Amazon Prime, but plenty of interest in the broader streaming-video ecosystem for those who’ve still put off the inevitable. For that, everyone else can thank Bezos and CEO Andy Jassy.

And there will be more to come. Soon enough, we’ll hear which tech giant gets the Sunday Ticket package that DirecTV has carried for many years. Amazon is jousting with Apple and late-comer Alphabet for those rights, whose negotiations have dragged throughout the summer.

The smart money is still on Apple. The world’s most valuable consumer company is both Not Amazon and Also Rich, which means the NFL will want to get them in the tent as soon as possible, just as Major League Baseball has already done with Friday Night Baseball.

That said, this transition to streaming won’t be quite as simple a shift for fans as the one that most experienced in 2006, when close to 90% of U.S. households had cable subscriptions. Back then, for most people, going from ABC’s Monday Night Football to ESPN’s amounted to just making a couple of clicks in the program guide.

But expect that kind of shift to happen in streaming too, just as it once did for cable. The game will never be quite the same again.