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‘We start with the customer and work backwards’: The Amazon playbook for buying sports rights

Speaking during December’s SportsPro OTT Summit, Marie Donoghue, Amazon’s vice president of global sports video, explained why live and on-demand sports content is becoming an increasingly important component of the Prime Video offering.

1 Feb 2021 Sam Carp

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Marie Donoghue sits back in her chair, looks down the camera and smiles.

“I’m just having a ball and loving my time at Amazon,” she declares enthusiastically. “It’s such a customer-focused company and culture, and really I think we have an amazing opportunity to use new technologies, new products, to create content and bring it to customers and sports fans in a whole new engaging way.”

It is perhaps no surprise that Donoghue is enjoying herself at a business that has the resources to – if it so pleased – acquire virtually whatever sports content it craves in whichever market it desires.

That, of course, has been the general consensus in the industry since Amazon, the Seattle-based technology giant that was last reported as having a net worth of more than US$1.7 trillion, made its first move into the marketplace in 2017, paying US$50 million for a package of non-exclusive National Football League (NFL) rights to exploit on its Prime Video streaming service.

We’re not a 24/7 sports service. We’re a much broader entertainment service, we’re global, so we look at things a little bit different.

Plenty have tried to analyse and explain Amazon’s approach to buying live sports rights in the time since, but no one will be as familiar with the company’s strategy as Donoghue, whose appointment in 2018 as vice president of global sports video was widely perceived as the ecommerce firm taking a significant step towards establishing itself as a major player in the sports media rights landscape.

A law graduate of Columbia University and formerly of ESPN, where she spent nearly 20 years expanding the Disney-owned broadcaster’s programming slate, including the popular 30 for 30 franchise, Donoghue now effectively decides and evaluates what sports content will add more value to a customer’s Prime subscription.

“My role is fairly simple,” she says, speaking during the SportsPro OTT Summit in December. “[It] is to bring folks in, figure out how to use sports – whether it be live or on-demand sports – to bring them in. I watch really closely their behaviour, what brings them in, what engages them, what keeps them interested.

“We are opportunistic. I think sometimes that confuses people, that we do look at everything, but everything has started with the customer and we only do it if it provides value to the customer and particularly their Prime membership.”

Moving the needle

It would be fair to say that there are few deals Amazon has done to date that look the same. Rather than secure blanket coverage of a particular major league in a specific territory, the company has so far acquired smaller packages of rights to premium sports properties that have enabled it to observe uptake and engagement. Its sports portfolio has spanned soccer, football, tennis, rugby union and cricket, among others, and it has been linked with many more. There have been exclusive and non-exclusive contracts, as well as tri-cast agreements and pay-per-view (PPV) offerings, while Prime Video also provides live sports coverage through its Channels feature, which houses out-of-market packages such as NBA League Pass and MLB.tv.

Identifying a discernible pattern in Amazon’s approach can therefore be difficult.

Look a little closer, though, and it becomes easier to see the thinking behind each acquisition. Its first year of domestic Premier League soccer coverage – which, during the 2019/20 season, featured a round of games in the first week of December followed by the popular Boxing Day slate of fixtures – delivered Prime’s two highest ever sign-up days in the UK. It is no coincidence, according to Donoghue, that the package of Uefa Champions League rights Amazon picked up in Germany from next season covers matches featuring the top Bundesliga sides. One of the company’s more recent deals, a six-year partnership with New Zealand Cricket (NZC) for the Indian market, will include two series between Virat Kohli’s men and the Black Caps.

No matter how much we talk about the global appeal of sports, which they have, ultimately the most passion is often local.

Donoghue herself acknowledges that there is “not a one sentence answer” for how Amazon approaches each rights deal, but reveals that there are a consistent set of considerations that the company takes into account.

“I always want to explain that we’re not a 24/7 sports service,” she points out. “We’re a much broader entertainment service, we’re global, so we look at things a little bit different. We literally start with the customer and work backwards.”

She continues: “We also want to do things that move the needle in broader ways. We always start with the country or the territory. We figure out what are the most attractive sports offerings for those audiences? Where is there an opportunity? Why should we come in? Is it a good thing for us to come in and serve these customers for them? Will they find it additive?

“Sports are largely inherently local. No matter how much we talk about the global appeal of sports, which they have, ultimately the most passion is often local.”

The Black Caps will host Virat Kohli's men twice during Amazon's six-year partnership in India with New Zealand Cricket 

Some leagues have previously hoped the encroachment of tech firms like Amazon and Facebook into the sports media space is something that can spark bidding wars and drive up the value of their rights. However, those companies are only likely to stay around for as long as they see that content being beneficial to their customers, and by consequence their business. Prime Video is, after all, just one of many membership benefits for Amazon’s subscribers, and sport is one among a number of genres to choose from in the streaming platform’s content catalogue.

That said, this year should provide some clarity on how valuable Amazon views sport for driving its Prime memberships. The Premier League is likely to go to market with its domestic rights for the 2021/22 to 2023/24 cycle at some point in the next 12 months, while the NFL’s current media rights contracts are also nearing completion. Should Amazon elect to retain or expand its rights to either or both of those premium properties, its outlay would need to be considerable.

Donoghue says she “can’t answer a hypothetical” about whether Amazon will still be investing in sports rights five or even ten years down the line, but says the company has been “really pleased” with what it has seen so far.

“We have numerous ROI measures that we look at,” Donoghue says. “It’s acquiring new Prime customers, it’s engaging and driving usage by existing Prime members – it may be reengaging existing Prime members who have not streamed video in a while.

“We use sports to drive engagement and focus to our overall Prime Video offering, so fans don’t just come in and watch the Premier League. We know they come in, they get exposed to broader Prime Video offerings, whether it be entertainment, or documentaries, or other things. And of course they also get exposed to the other Prime membership benefits.”

Amazon's first year of domestic Premier League coverage delivered Prime's two highest ever sign-up days in the UK 

Customising the experience

While live sport is undoubtedly a benefit for Prime subscribers, a number of sports properties have been reaping the rewards of having their content on a platform that can offer fans a different viewing experience to one they would have watching on a linear network. Amazon’s X-Ray feature, for example, has become a highlight of its NFL coverage, giving fans real-time access during live games to statistics that were previously only available to coaches and broadcasters.

X-Ray, which appears as an overlay on the screen, isn’t something that was initially created with the NFL in mind, but is an example of how Amazon has been able to adapt features from its broader entertainment offering to work for its sports content.

“We believe in customisation,” Donoghue asserts. “Not every fan is the same, so your daughter watches sports differently than how your wife or your mother watches it. Some people like a lean back experience on the couch, some people want to watch certain stats, certain players, things like that. So we leave it up to the fan, and X-Ray is one of those great customisations that you can actually engage with when you choose to.

“What we’ve found is, particularly on Thursday Night Football, where we have the stats and have actually tracked this quite closely, more and more fans are engaging with X-Ray, and when they engage with X-Ray their engagement and their time spent goes up materially.

We don’t imagine a prototypical fan. We want to create a huge big tent, bring everybody in, then figure out how best to serve them.

“So as I said, we start with the customer, we’re always looking to see what the customer is enjoying and how we can better serve the customer, and there’s no better example of someone who engages with it more and stays more when they use it.”

Indeed, the NFL is one league that you could arguably say has received the full Amazon treatment given the way its partnership with the company has evolved. Coverage was initially transmitted only via Prime Video, but the relationship has now grown to include Twitch, another Amazon streaming platform, which has gamified NFL broadcasts through features like live chat, custom extensions and predictions, as well as other interactive elements that allow fans to watch along with their favourite creators.

Last year the pair also rolled out a weekly interactive show specifically for Twitch, allowing fans to engage with former players and analysts in what Donoghue describes as “a very authentic and informative way”. 

“We’re joined at the hip,” Donoghue says of Amazon’s relationship with Twitch. “It’s a great sandbox, it’s a great place for us to experiment, to test new experiences, [to] innovate on the viewing experience.

“We’re particularly interested in building community, [and] Twitch has such a powerful community. Obviously it engages new and younger audiences, it’s a very international audience. I’d also say it helps our partners with some of their goals. That younger, international audience is very attractive to rights holders.”

‘Unlimited shelf space'

Clearly, then, Amazon has every tool in its arsenal to be a prominent – and, you might say, popular – player in sports media for the foreseeable future.

Donoghue, who was named among SportsPro’s ten influencers for 2021, is understandably coy about what the company’s next move might be, but makes clear that its decisions will continue to be guided by its customers. She also says little to suggest that Amazon’s interest in sports will plateau anytime soon. 

“We believe sports is really compelling, exciting content for our customers, so we will always look at opportunities to bring them sports they care about, whether it be in our SVOD or subscription service, or Channels or pay-per-view,” she says. 

“We don’t imagine a prototypical fan. We want to create a huge big tent, bring everybody in, then figure out how best to serve them, and then give them the opportunity to choose – whether it be choosing your own audio feed, you choose whether you want to watch it on Prime Video or you want to watch it with a creator on Twitch.

“We have unlimited shelf space. We had a night where we had eight EPL [English Premier League] matches going, many concurrently. It’s like sports nirvana. I think that’s what we’ll continue to focus on. I hope and believe the industry and teams and leagues will also focus on the customer, but I can guarantee you that we will.” 

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