Amazon’s plan to dominate sports broadcasting

Anyone who saw Amazon Prime in a Flamengo shirt last weekend might be surprised in the Red and Black match against Palmeiras, in the Super Cup. But the move is part of the e-commerce giant’s ambitious strategy to control sports broadcasting around the world and accelerate its growth on many business fronts.

Sports Streaming is a way to attract new subscribers to Prime, but the ambition goes further. The company is also the world’s largest media buyer, ahead of consumer giants such as Unilever and P&G. So Amazon can use commercial breaks to sell its own products, like Alexa.

But selling advertising space to other companies is a more profitable path, and Amazon has grown rapidly in the sector. Much is said about the dominance of Google and Facebook in the digital advertising market, but the fastest growth in this segment in recent years has been Amazon. The company is already the third largest advertisement seller in the world, according to a report by E-MarketingIt will continue to gain market share from the pioneers of Google and Facebook, in a sign that brands are increasingly turning to the e-commerce giant to help it reach the growing number of buyers. Online.

Last year, Amazon advertising revenue in the US grew to $ 15.73 billion, up 52.5% from 2019, according to eMarketer estimates. Amazon is also offering to sell ads within its IMDB TV platform, increasing its investment in exclusive programming. It has already announced the sub-show of the “Bosch” series and the evaluation of other additions on IMDB TV for Prime programs.

Store your team online

A cornerstone of Amazon’s game for streaming sports dominance has been the purchase of the $ 1 billion “Friday Night Football” game and its coveted hours of work, replacing Fox Corp. From 2023. The purchase is part of the NFL New Media Rights Agreement signed earlier this year. It’s by far the biggest deal Amazon has ever struck in broadcasts. Prime already broadcasts the sport in other parts of the world, but NFL is the most popular sport in the world’s largest advertising market, and it’s the most expensive commercial holiday on the planet.

Amazon has also expanded the schedule of European football matches offering its primary subscribers, including select matches from the English Premier League, the world’s most popular league. Earlier this year, the company negotiated a bid to acquire the rights to the Italian league, but Amazon was looking for a limited package, with only a handful of games per week, similar to deals with the English Premier League and NFL. He did not accept the Italian League because he preferred that all transmissions be centered on one platform.

The sport, despite the decrease in the number of viewers it encounters on television, remains unbeatable in getting people together and getting their attention. Sports broadcasts account for over 85% of the largest audiences in the United States. In Brazil, according to YouTube, in 2020, the Rio Cup final, held between Fluminense and Flamengo, in July, topped the video ranking at the highest level in 2020, peaking at 3.6 million hits simultaneously on Flu TV Club Rio de Janeiro on YouTube that displayed the match. Live stream was the largest audience for simulcast YouTube in the world. After the most viewed videos in 2020, another Flamengo comes out in the Rio Cup. These audience records help explain Flamengo from Amazon.

Another line of business is selling team products. The NFL in late March announced a partnership with Amazon to bring thousands of officially licensed products to the retail giant, a move that could transform the billionaire equipment market.

Until now, the range of official NFL products offered for sale on Amazon has been very limited. Now, NFL will expand its offering to everything from knock-off shirts, and hats to second-hand products. Lots of products will also be available on the official NFL Online Store on Amazon. Brands include NFL Pro Line, Fanatics, New Era, and Outerstuff. Nike, an NFL partner, was not included in the deal and will not sell its NFL products on Amazon, but most of the other partners have joined.

As it brings more users to its platform, Amazon also collects more data about its customers, which makes its ability to sell targeted ads and products even greater.

The more product sales and advertiser funding that Amazon attracts, the more it can reinvest in purchasing sports rights. One of the limitations of sports broadcasting is its high costs. What has always given an advantage to large television groups is now an advantage in addition to owning tech companies Best Capitalization, on a global scale.

Video game is also a sport

One of the gigantic and less visible feats of Amazon Twitch is its game-streaming platform. It hosts 91% of all video game broadcasts, outpacing competitors on YouTube and Facebook. In less than a decade, Twitch has become one of the most popular platforms on the internet, serving more than two million viewers at any time of the day. 7 million people follow live video game broadcasts every month – nearly double what it was before the pandemic began. Joining the digital and real sports experience is another potential pathway for Amazon.

Amazon is not alone. Facebook, YouTube (from Google), Spotify, and even TikTok don’t want to be left behind. Facebook and YouTube have long run sports broadcasts, and have bought Spotify since the days of Locker Room, which is an audio app focused on conversations with sports fans. The idea is to expand Locker Room beyond sports and compete with the Clubhouse chat room app, but the sports crowd is already there.

TikTok is the wildcard in this marketplace. The social network recently aired the Copa do Nordeste match between Ceará and CSA. This was TikTok’s first broadcast game in history, UOL columnist Danilo Lavieri mentioned. The match garnered 634,000 spectators, and the official Cuban de Nordeste account on the stage got 65,000 followers on the day of the broadcast. The most viewed video has reached 3.2 million views. For TikTok, live streams are an opportunity to take advantage of live commerce and sell products in live broadcasts over the Internet. Sport is feverish in China, TikTok’s home country, and billions are moving.

The wheel of success

After reading Jim Collins’ book, “Companies that Made to Win,” Jeff Bezos, founder of Amazon, drew a wheel on a napkin to illustrate the effect of the balancing wheel on Amazon. His idea was to reproduce the flywheel model described in Collins’ work, such as the large wheels used in engines. In the tweet below, the photo that will be on Bezos’ napkin.

Prime’s entry into the sport is an extension of the Amazon wheel. Having the biggest tournaments will lead to a better experience, which will attract more consumers, more consumers, and more data. More consumers and data, more possibilities to profit from product, subscription, and advertising sales. And with more money, more cash to buy the rights to the best tournaments. And so, the wheel turns and Amazon grows. It wouldn’t be any different in Brazil, and Flamingo is a great candidate to join the Amazon Wheel.