This December, Amazon has begun its foray into live football broadcasting through its Prime Video streaming service. The online retailer has been investing millions into its streaming platform over the last few years as part of its ever-growing expansion plans.
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Amazon started life as an online book seller in the 1990s, and is one of the lucky few companies that survived the dot com bust of the early 2000s. Over time it has branched out from selling books, to become a one stop shop for products from pet food to designer clothing.
Selling physical products is not enough for Amazon though. It also began selling digital content like ebooks to go alongside its e-reader the Amazon Kindle.
One of its biggest revenue streams is Amazon Web Services, where it rents computer space to other companies on a pay-as-you-go basis. AWS is a major part of the modern-day internet, and is used by large brands like the BBC, Netflix, Facebook and Twitch, each of which spends around $10 million each year.
Meanwhile, Amazon has started to manufacture its own hardware. This has included the Fire tablet, the Echo smart speaker, and Fire TV range. It owns its own courier service for “last mile” delivery of orders to customers and even a fleet of planes to speed up its logistics.
Amazon Prime Video, an extension of its Prime subscription service that provides expedited shipping, is the company’s rival to services like Netflix and Hulu.
Investing in the Amazon Prime Video service is part of its strategy to drive growth to other parts of its business. As part of it, the company has been investing heavily in its original content with shows like Mr Robot, The Man in the High Castle, and The Grand Tour.
While new customers signing up to subscriptions of Amazon Prime Video in order to watch these shows will provide additional revenue to Amazon, its ultimate aim is to encourage more customers to use its Prime delivery service and buy physical products from its online store. On average, a Prime customer will spend around £1,000 per year with Amazon, double that of a non-Prime customer.
As another step in this strategy, Amazon has been buying the rights to live sport, first with PGA golf and WTA tennis, and now the English Premier League.
The Premier League sells rights to games in packages made up of several games. Media organisations then bid for these packages in auctions, with the one promising the highest amount winning the rights to broadcast the matches live.
Sky Sports has been the dominant player in the broadcasting of Premier League games, but it has recently faced a challenge from BT. This year, Amazon joined in the bidding, winning the rights to broadcast some December games.
It is estimated that Amazon paid around £90 million for its package of 20 games per season for three years. While a lot of money, this is a drop in the ocean for the Premier League, which raised almost £5 billion over three years for the rights to all the games.
It is believed this small, 20-game package is Amazon’s way of testing the waters for a bigger bid from 2022-23 onwards. It has gone all out on this experiment, with a team of 43 presenters, pundits and commentators, including big names like Michael Owen, Thierry Henry and Alan Shearer.
December is the perfect time for Amazon, as it will use the football matches on over the Christmas period to attract more customers to its Prime Video service. In particular, the popular Boxing Day games are included in its line-up.
This means that fans will be able to watch all 10 Boxing Day Premier League games live through Amazon's video streaming service, including important title games like Leicester City vs Liverpool, where the reds are currently 5/4 favourites according to the main oddsmakers, and Wolverhampton Wanderers vs Manchester City, where the reigning champions are clear favourites at 5/12.
The Boxing Day games are a big day on the English football calendar, so broadcasting all games live is likely to attract a lot of fans to the Prime Video service, particularly since all teams that top the Premier League table are playing.
While it is yet to be seen whether Amazon’s venture into football will be successful or not, it seems to be a logical next step in the company’s strategy to dominate as many sectors as possible. Its business model is built around sustained growth, and to keep this up it will need to find novel ways to attract more customers.
It is very possible that we’ll see Amazon spending even more money in the future, when the rights for the 2022-23 season and beyond are put up for auction.