For the first time in its domestic market, an NFL game was broadcasted exclusively on a streaming-only platform on December 26, 2020. The San Francisco 49ers vs. Arizona Cardinals game drew a worldwide average viewership of 4.8M across Prime Video and Twitch. Even though we will not see any meaningful domestic NFL package exclusively on Prime Video anytime soon for a multitude of reasons (think: technological challenge of live streaming at scale, UI/UX challenges, NFL's preference for max-reach distribution, the urgency of current broadcasters to retain NFL programming), it inevitably sparked the conversation about when, not if, Amazon would take over the NFL broadcasting packages in particular and the sports rights market in general. 🙄
Disregarding those challenges and that NFL probably will not have to rely on Amazon to sustain their growth in media rights revenues in the short-term, the single-biggest reason why I do not believe that Amazon will come to the rescue to a seemingly flattening-out sports rights market: Amazon does not need to. 🤷🏽♂️
In contrast to pure-sports broadcasters/streamers, there is no need for Amazon to build up a critical mass of live sports programming. Instead, there is optionality for Amazon to opportunistically tap into the sports rights market and super-charge their already existing (video) value proposition. 🚀 Unfortunately for sports rights owners, Amazon will do so on a selective basis (think: diminishing return on investments in live sports programming) and is much more likely to do so if there are bargains available 🤑 instead of when right owners can still demand market rates.
With Amazon acquiring sports rights at scale being out of the room of possibilities, this blog focuses on the content acquisition strategies of (pure-sports) streamers/broadcasters instead: Those pure-content players that have traditionally already bought sports rights and will also determine the future trajectory of the sports rights market — currently standing at +/- USD 50BN. 💰
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PORTFOLIO THEORY: Building a sustainable subscription business with the right puzzle pieces for customer acquisition and engagement/retention to achieve a stable, gradually growing subscribership over time — amidst sports' inherent seasonality and challenging OTT economics (ARPU📉, CAC📈, Churn📈).