The FIFA World Cup is now underway in Russia. Who do you think will take football’s greatest prize? (Spoiler alert: it isn’t England.)
Month: June 2018
Why the Premier League needed Amazon Prime
After months of behind the scenes negotiations, the final two Premier League television packages for the 2019 deal have been sold. BT Sport increases its number of matches to 52 per season for the three-year deal. The big news is Amazon securing the 20 game package which comes with the caveat of showing every game across two distinct game weeks.
One of those is the first round of midweek fixtures in December. This is Amazon’s warm-up. It’ll give Prime Video the chance to iron out any teething problems and also enable them to gather data on viewing habits. Presumably, the initial ten games will be split across two nights in order to maximise the exposure.
The jewel in the crown of this deal is how Prime will show all the Boxing Day fixtures.
Festive games are a staple of the English diet, it makes fan interaction and acknowledgment of Amazon unavoidable. Many will flock to their local pubs, so how Amazon deal with public licenses is something that will be revealed in time. Amazon’s main intention will be to drive new subscribers to their packed Prime offering. Streaming is just a small part of this but they obviously see the Premier League deal as a decently priced advertising campaign.
It’ll certainly offer better value for money than Jeremy Clarkson’s The Grand Tour. That particular show cost Amazon a neat $250m, with BT paying an extra £90m for the less lucrative 20 game package, it’s safe to assume Prime’s acquisition will exceed the £100m mark.
But it might not be by that much. The reason these deals have taken so long to conclude is because their value is a true unknown quantity for all involved. There’s a chance this style of broadcasting, showing every single match from one round of fixtures, will never work with a UK based audience. From Amazon’s point of view, will enough people stream a potential Wolves v Huddersfield clash to justify the attempted push for subscribers?
The idea of Internet channels is growing in the States. Facebook and YouTube now have subscription models and Amazon have aired sporting events already. The Premier League is right to join an emerging market. More than this: it needs to join the platform and make it a success.
When the last TV deal hit revenue of £8.8bn (once overseas rights had been added), there was a growing feeling the peak return had been hit. The £5.14bn from domestic rights didn’t go back to the fans paying at the turnstiles or into grassroots football, it went into the pockets of agents and inflated the global transfer market.
At the time, BT and Sky were locked in a battle for broadband subscribers and addons like sport packages became a premium. BT had already stolen the UEFA Champions League, they wanted a slice of Premier League pie too. Back then, a customer had to juggle multiple subscriptions, even going to the extent of having two boxes plugged into televisions, one for Sky, the other for BT.
That all changed in December 2017 when the companies announced they had come to a deal, allowing them to sell complete packages with both sets of properties merged. Not only could they sell all-in-one sports deals, BT was even able to offer Sky’s Now TV channels which includes the home for Game of Thrones, Sky Atlantic.
Any doubt the peak of what Sky and BT would pay for Premier League matches was removed. Rather than push the prices up, they could now take a more measured approach. Exclusivity wasn’t quite so exclusive. It was no longer a case of one or the other, they’d formed a necessary alliance of sorts.
They could see what was on the horizon: a new world where Amazon or Netflix or even Twitter and Facebook, could offer live games with lower running costs.
So Sky did what Sky does best and tried to bully its way to the result it wanted.
By not engaging with the Premier League over the prospect of streaming all the matches in a particular round of fixtures, it fronted them out. It risked the proposal of a seven-package system falling by the waste side. Had that occurred in 2018, the chances of a later revival would have been highly unlikely.
The Premier League continued the talks with Amazon because it understands the existing Sky monopoly runs the risk of adhering to the law of diminishing returns.
When the sponsorship model was dropped it was a step toward becoming the football equivalent of the NFL or Major League Baseball so its quite fitting they have hooked up with a company that has a foothold in the American market.
Time will tell if this marks a change in how the UK views domestic football but evidence suggests a paradigm shift is already underway.
Research by SMG Insight found that 54% of millennials have watched an illegal stream and 18 to 24-year-olds are half as likely to subscribe to a paid model. The cheap Prime versus expensive Sky offering could convert some of those into legal consumers. With all of Amazon’s 20 games falling within December, those unsure could take out a one-off monthly subscription of £7.99.
If they watch just two games, it’s still trounces BT and Sky in terms of value for money. If some of those experimenters stick around, boosting Amazon Prime’s subscription numbers, it may make the retail giant – and rivals like Netflix – take a serious look at the other packages next time bidding starts.
Which would be great news for the Premier League. At the moment Sky hold all the cards because the give all the money. If people enjoy Prime’s Boxing Day extravaganza, next time the bespoke TV deals might not be on sale at Boxing Day Sale prices, the traditional packages may climb upward again.
And Sky might not be left holding all the best gifts.