English Premier League: Amazon on the pitch

Four months on from the initial award of English Premier League rights, Amazon has finally walked on to the pitch to score with a package of 20 matches per season, including bank holiday fixtures, in addition to weekly highlights.

In the end, in the wake of much speculation over its intentions at the time of the original auction, it seems that the streaming giant could not resist the once-in-three-years opportunity to acquire a slice of the UK’s premium sporting competition.

Securing the rights now means that Amazon has stolen a march on any other internet player that may be mulling whether there is an opportunity to disrupt the sports rights market.

Amazon has in fact risked relatively little with this package. Although the group did not reveal how much it spent on the rights, BT, which acquired the other remaining package of 20 matches left over from February, said it had acquired its batch for a modest £90 million (€102 million), well below the sums being bandied around earlier in the year. Amazon has said that it will offer the matches to Prime customers at no extra expense, and the limited set of matches that Amazon has acquired would not suggest that a price hike for Prime is in the offing.

For Amazon this is an opportunity to test the waters and – just as important – provide additional stickiness for Prime memberships – the lucrative subscription next-day delivery service that has an estimated base of around eight million in the UK, with Prime members thought to spend close to twice the amount on goods sold through Amazon’s site as non-members.

The acquisition of sports rights also offers Amazon an opportunity to ramp up its move to differentiate its service from that of SVOD market leader Netflix, which has stayed clear of the sports market to focus on movies and series.

Sports rights are assets with a predictable appeal to consumers. In this they are unlike drama, investment in which is riskier even though the sums spent on individual titles are smaller. It also opens up the possibility that Amazon may try to make additional revenue from video through advertising.

For Amazon, a likely relatively small outlay on attractive premium rights that can attract more customers to Prime while providing stickiness for existing subscribers – and at the same time giving it an early-mover advantage over rivals in premium sports and the opportunity to further test the waters – is a win-win.

The other big winner this week is BT, which has pulled off the double coup of acquiring a further package of rights at a relatively low price and establishing itself as the only platform that has access to all Premier League matches from next year. Thanks to the deal it recently signed to integrate Amazon Prime Video in its offering, its deal with Sky to include Now TV as part of its offering and its own rights, BT is now the one-stop shop platform for Premier League fans – providing they are willing to shell out on all the subscriptions necessary to watch them.

BT for its part is shelling out less per match to offer more matches than before. This is good news for the telco, which at the start of the year was looking vulnerable as the holder of a smaller set of rights than Sky.

In global terms, Amazon’s acquisition of a limited set of Premier League rights is only one small part of an ongoing and extraordinary disruption of the premium sports rights market that has seen incumbent pay TV players that previously monopolised most of the key rights challenged across a number of fronts.

The entry of new players with international scale in acquiring not only out-of-market rights but, increasingly, prime in-market properties, threatens to shake one of the key pillars that have underpinned the pay TV model for the last three decades.

Discovery, Disney and Amazon are continuing to flex their buying power across a range of fronts, not least in the shape of this week’s deal between Discovery and the PGA Tour.

In France and Italy meanwhile – albeit unsuccessfully in the latter case – Chinese-backed Spanish upstart Mediapro has shaken local certainties about the destination of premium football rights to the core. Mediapro’s acquisition of Ligue 1 rights in France in particular has left Canal+’s model looking distinctly shaky.

Even Sky, which for all this week’s developments remains ‘the home of the Premier League’ in the UK, has already pulled back from spending on a number of rights it previously took in order to focus on core properties.

For sports fans, all of this will be a mixed blessing. While drama titles are unique, series seem to some extent to be substitutable. And dramas come to an end, meaning that subscribers can dip in and out of services such as Netflix depending on whether there is something on that they want to watch. For dedicated Premier League fans the situation is different: matches are not substitutable. More competition in the market means those who want to watch every game will be left spending more rather than less.

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