When it comes to live-streaming, Amazon.com (AMZN) has scored a touchdown.
Amazon.com will live-stream 10 games for the National Football League this year, a company spokeswoman said on Tuesday, marking a high-profile push by the online retailer to attract fans to its Prime shopping and video-streaming service. The online retailer won a bidding war against Facebook (FB) and other big technology companies to secure the rights, according to a person familiar with the matter.
Amazon’s live-stream of the games will be available only for Prime members. While the Seattle-based company has streamed live events in the past, the NFL may be its biggest stage yet, and reflects Amazon’s push beyond its mainstay of on-demand video.
The deal underscores a key strategy Amazon has to win a greater share of shoppers’ wallets: offer benefits like fast shipping and video-streaming so people sign up for Prime and, consequently, turn to Amazon for more of their purchases. The popularity of Amazon’s Prime service was among the reasons why Barclays analyst Ross Sandler recently predicted the company would become the first to reach a $1 trillion market value.
Amazon is close-lipped about how many customers have signed up for Amazon Prime, which costs $99-per year, but Sandler estimates its ranks could hit 200 million people by 2021. He pegged its customer base at about 75 million customers last year.
Amazon Prime is helping to boost the profitability of its retail business, which naysayers have long faulted for its thin margins. According to Sandler, that segment’s gross profit (not accounting for some costs) soared from $8.9 billion in 2011 to $35.5 billion in 2016 and may hit $81.2 billion in 2021, partially because of the Prime service.
While the deal is a score for Amazon, it doesn’t have exclusive streaming rights, according to technology site Re/Code, which earlier reported on the agreement. Verizon will stream the games to its mobile customers, while CBS, the owner of CBS MoneyWatch, and NBC will also be able to stream the games airing on their networks, Re/Code said.
In addition to Facebook, Amazon beat out Twitter (TWTR) and Google’s (GOOG) YouTube for the digital distribution rights, the person said. The Seattle-based company agreed to pay the NFL five times what Twitter spent on the rights last year, which was reported to be $10 million, the person added.
Amazon declined to comment on the deal’s price tag.
Sports fans are increasingly relying on the internet to watch content at the expense of traditional cable and satellite connections. Twitter attracted 243,000 viewers on average during its NFL livestream debut last year.
“The NFL was a great partner to launch our strategy and we will continue to work with them to bring great content to our passionate sports fans,” the social media company said in a statement.