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Is Live Sports Ready for an Amazon Takeover?

30 Nov, 2016

By: Michael Popke

Amazon introduced drones to the public and provides same-day delivery service in many American cities. Is there anything the online retail giant can’t already do? Well, it can’t broadcast live sports. But that could change soon and event owners and rights holders should be ready.

According to a recent report in The Wall Street Journal:

In recent months, the e-commerce giant has been in talks with heavy hitters like the National Basketball Association, Major League Baseball and the National Football League for the rights to carry live games, according to people familiar with the matter. It also has talked with soccer, lacrosse and surfing leagues, the people said.

With at least some leagues, including the NBA, Amazon has floated the idea of creating an exclusive premium sports package available with its Amazon Prime program, though the details are unclear, the people said. Such a package could attract new members to the $99-a-year Prime program, as well as to a “skinny bundle” of live online channels that Amazon is pursuing.

An Amazon spokeswoman declined to comment on its sports efforts.

If those reports are true, the move makes sense, according to the tech news site DigitalTrends.com. “Live sports is one of the last differentiable elements offered by traditional cable and satellite television platforms,” writes Lulu Chang. “Some other major tech players have already begun streaming such events — Facebook and Twitter are both in the game, and Amazon may be playing a bit of catch-up at this point.”

The Ringer, the sports, pop culture and tech site helmed by Bill Simmons, chimed in — going so far as to predict that an Amazon live-sports streaming deal would be the final nail in the coffin for cable television, which has been on life support for years thanks to live sporting events.

Don’t hold your breath, though, warns Ringer staff writer Victor Luckerson: “Broadcast rights have become a huge profit center for sports leagues, and the way to wring the most money out of those rights is to play one content distributor against another,” he wrote. “It’s in the interest of a league like the NFL to entertain meetings with Amazon?—?especially in the face of declining ratings?—?if only to persuade longtime partners like NBC and ESPN to pay more during the next round of negotiations. The traditional cable bundle forces all pay-TV subscribers to pay a high fee for ESPN, whether they watch it or not, and ESPN can then use those fees to pay exorbitant licensing deals for sports broadcasts. It’s a virtuous television cycle that works for all parties involved, except the viewer at home. An attempt by a major league to decamp for a distributor that exists outside of this system, like Amazon, risks destabilizing a business model that has largely withstood the technology shifts currently recasting the economics of scripted TV.

Sports television is heading in directions even the most talented writers couldn’t have scripted five years ago. And like the matchups, nobody knows how this is going to end. Stay tuned.

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