Amazon: A Comparison Between The NFL And Amazon

Last week, a fifty million dollar deal was announced between the NFL and Amazon that would allow Amazon to stream ten of the NFL’s Thursday Night Football games. Many have viewed this as a poor deal for Amazon, as Twitter paid approximately ten million dollars to the NFL last year in a deal that also allowed them to stream ten Thursday Night Football games over the course of the season. However, the deal also contains a clause which will allow Amazon to sell 2 minutes of advertising time per hour during the games. This is where things will get interesting. Amazon has come forth and said that it will use some of that time to advertise some of its original series to viewers but not all of it. The only people who will be able to stream the games

For example, if user X often buys large amounts of Coca-Cola on Amazon Prime, the company already has a heads up that user X would likely be an ideal target for soft drink ads. This could greatly increase the effectiveness and value of each marketing add, giving Amazon a neck up over the competition in terms of generating revenue from advertising. In other words, each specifically targeted add that amazon airs would have a significantly greater chance of resulting in increased business for the organization having their products or services advertised. This innovative move has the potential to lead to businesses paying Amazon a greater than normal amount for each individual ad it shows on their

However, even if this is the case the deal could still be a very economically beneficial one for Amazon. The normal fee for Amazon Prime is $99 a year. Anyone who regularly follows the NFL is aware that in recent years they have pushing to establish themselves in foreign markets. The people in these areas are not able to view NFL games through normal television programming. However, individuals in these other countries can become members of Amazon Prime and stream the ten Thursday night games over the course of the season. This gives foreign NFL fans an additional incentive to pay the $99 a year fee to receive the Amazon Prime service, and provides Amazon with a great opportunity to increase its number of Amazon Prime subscribers. Based on this $99 a year figure, the possible returns of this deal for Amazon suddenly seem as if they could be much more impressive than one would initially assume. Even assuming that Amazon generated no ad revenue from other companies when advertising, the 50 million dollar investment seems much easier to make up when it is divided by $99 increments. Doing the math shows that Amazon would only need to gain approximately 505,000 new Prime customers worldwide in order to receive a full return on their investment. Given the growing popularity of the NFL in foreign markets, and the push the NFL