E-commerce giant Amazon.com Inc AMZN is making a big bet on live sports rights, paying billions for NBA rights. Could the move help boost subscribers of the Amazon Prime Video streaming platform?
What Happened: Benzinga recently asked followers on social media if the new NBA rights deal would lead to them subscribing to Prime Video.
"Will you sign up for Amazon Prime to watch the NBA?" Benzinga asked.
The results were:
- Yes: 10.2%
- No: 56.5%
- Already Have It: 33.3%
The poll found that a third of respondents already have Amazon Prime Video. Over half of those polled said they would not be subscribing to Amazon Prime Video just to watch NBA games. Only 10% or around 15% of current non-subscribers said they would sign up for Amazon Prime for NBA games.
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Why It's Important: While the poll had a small sample size, it could be a bad sign for the billions spent on NBA rights.
Amazon is paying a reported $1.8 billion annually for the rights to national NBA games that it will air during the season on Thursdays, Fridays and Saturdays. Amazon Prime Video will also be the home of the NBA In-Season Tournament and NBA Playoffs series as part of the deal.
Adding NBA rights to Prime Video makes the streaming platform even more sports-focused going forward, with the rights to the NFL's "Thursday Night Football" and NASCAR rights beginning in 2025. Amazon will also be the distribution partner for Diamond Sports Group in the future, which is the home of regional sports coverage for several MLB, NBA and NHL teams.
The move by Amazon to add NBA rights could lead to more advertising revenue as it ramps up its advertising efforts on the streaming platform.
Another potential negative for Amazon's NBA deal could be a legal battle playing out between the sports league and existing rights holder Warner Bros. Discovery WBD.
Warner Bros. Discovery sued the NBA over losing the rights to Amazon and its decision to match the contract being rejected by the league.
“Given the NBA’s unjustified rejection of our matching of a third-party offer, we have taken legal action to enforce our rights,” TNT Sports said in a statement reported by ESPN.
Warner Bros. Discovery said it had the contractual right to match Amazon's offer and filed the lawsuit with the New York Supreme Court.
The lawsuit comes after NBA commissioner Adam Silver said the "digital opportunities with Amazon align perfectly with the global interest in the NBA."
"And Prime Video's massive subscriber base will dramatically expand our ability to reach our fans in new and innovative ways," Silver said.
Amazon has over 200 million monthly viewers for Prime Video according to CEO Andy Jassy.
The company's rights to "Thursday Night Football" games have been cited in the past for helping add subscribers and the NBA and other sports rights could play out similarly.
Amazon’s NFL rights have successfully increased Prime Video subscriptions and garnered high viewership ratings. The company landed 11 spots on the top 100 primetime broadcasts of 2023, with six Thursday Night Football games ranking among the 50 most-watched primetime events in the U.S. in 2023.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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