Netflix, the NFL, and the Amazon effect

After two decades of saying no to becoming a live sports streamer, Netflix has finally relented and has agreed to pay the NFL to show two NFL games on Christmas day this year. The three year deal also includes options for other holiday games to be livestreamed in 2025 and 2026. The streaming rights to the two games this year are estimated to have cost Netflix $150 million, a significantly greater per game price tag than Amazon paid in 2017 to acquire the streaming only rights to Thursday Night Football (TNF) matches. This follows on from the WWE smackdown rights secured in January , and now firmly places Netflix as a streaming sports contender (as MIDiA predicted would happen in 2024.)

Amazon’s securing the exclusive (domestic) TNF broadcast / streaming rights in 2021 for 15.4 times more than it had previously paid precipitated a surge in the valuation of the NFL rights to $100 billion over 10 years – making them the most valuable sports rights globally. Simply put, Netflix securing exclusive NFL rights for its global audience places a marker down for all its streaming TV competitors. 

Why Netflix is copying Amazon

Consistently number three in the global SVOD rankings behind Netflix and Disney, Amazon is forecast to make up ground on the two leading SVOD services with its average subscriber growth rate exceeding Netflix and Disney between 2024-2031 (as is discussed in MIDiA Research’s 2024-2031 global subscription video forecast report due to be published later this month). Alongside the powerful bundled utility appeal of Prime membership outside of video (think premium delivery services, Prime Music, Prime TV channels, Prime Reading, etc.), it is now close to a substitutive TV experience, with its licensed and original films and episodic content complemented by mainstream sports such as the NFL, soccer, and tennis.

However, alongside the competitive pressure of Amazon, Netflix is no longer a pureplay SVOD service. Since the September 2022  launch of Basic with Ads as the entry subscription tier for membership, Netflix is now in the advertising business, and nothing sells ads like major live sports events. At the Netflix 2024 Upfront (where advertising businesses pitch their distribution and engagement value to prospective advertisers) the NFL coverage was inserted as the big reveal. Effectively, Netflix was telling advertisers to now take it seriously as the alternative to traditional TV partners. 

And of course Amazon Prime Video now also has advertising which was introduced earlier this year. Up until now, ads have not been front and centre of the streaming TV experience.  Major live sports has changed this equation, and short of introducing pay-per-view, SVOD services will be looking to offset rights costs through big ad campaigns. This will unfortunately publicly reinforce the ad-supported reality that SVOD is now morphing into. However it will also have the desired benefit of promoting Streaming TV as the (evolving) home of mainstream live sports for mainstream consumers.

Game on.