Will Amazon Prime (AMZN) Users Actually Watch NFL Games?

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Credit: Shutterstock photo, Inc. AMZN is making serious efforts to drum up some business in the live sports video streaming space.

This is evident from the recent news wherein the NFL granted the online retail giant the rights of streaming live 10 "Thursday Night Football" games to Amazon Prime members. The deal was valued at around $50 million.

However, it must be noted that this is not an exclusive rights package. NFL's big television partners, CBS, NBC and its own NFL Network, will split up coverage of the same 10 games for the traditional broadcast and cable television audience.

Coming to the price performance, over the last one year, shares of Amazon have been steadily treading higher. The stock has returned 50.02% compared with the Electronic Commerce industry's gain of 43.28%.

NFL Games - Perk for the Prime Members

Amazon has been eyeing popular U.S. sports like baseball and basketball but most of the rights have been locked up by major broadcasters through long-term contracts. However, Amazon managed to secure the NFL deal, giving its Prime Members a chance to watch the the upcoming season of NFL live.

Although the NFL deal is of high profile, it will not be easy to assess how valuable it will actually prove to be for Amazon and if it will help in increasing its Prime subscribers? These questions will remain unanswered till the actual figures are out.

Going by last year's numbers, Twitter's TWTR foray into the NFL last year was not quite successful. The company did not report a healthy user growth or revenues as a result of the NFL deal. The average Twitter viewership for the 10 Thursday night games at any given minute was 266,000, compared with 15.8 million on broadcast and cable television.

Moreover, in 2015, Yahoo! Inc. YHOO paid $17 million to live stream NFL games in London. Yahoo's live stream, which played automatically on its homepage, reached an estimated 15.2 million viewers. However, the average viewership per minute was only 2.36 million.

Despite the past numbers not being so great, let us see if Jeff Bezoscanmake more money by offering more content to its Prime members. Movies, TV and now live sports could definitely make Prime a long-term power in the content business given that cable television's viability is declining every day.

Amazon Push in the Media Business

The online retail giant seems poised to keep pushing heavily into the media content business. Amazon already produces its own original television programming, which includes the Emmy Award-winning Transparent. Also, Amazon recently put Hollywood in the spotlight when Manchester by the Sea took home two Oscars.

Amazon's interest in sports goes back a long time. Last year, the company had apparently approached traditional TV networks, seeking game rights. The company has already looked into live rights for the NBA, soccer, surfing and Indian Premier League cricket. The NFL marks a giant win on a small scale. If Amazon can prove the viability of its NFL streaming, then other leagues and live sporting events could soon join the party.

We believe, any live sports streaming offerings will take Amazon Prime one step closer to being a must-have living room feature.

What about the Investors?

The Seattle-based company wants to give its Prime members not only more choices but also more reasons to keep paying the $99 annual fee that includes free two-day shipping, as well as other services.

The NFL is America's highest-grossing sports league, bringing in about billions of revenue every season. Amazon investors will be happy to welcome the cash cow that is American football, as the company will add to its revenue streams.

This deal is most likely going to be good news for Amazon investors in the long-run and will allow the company to further capitalize on its existing users and add new subscribers, expanding its revenue base.

Bottom Line

This plan to own live sports rights appears to be the next step with these global streaming video content services. It makes sense too. To assume that audiences in different countries solely want to watch cinema is incorrect. Getting the right to stream live sports is a smart way of attracting new international members. That said, the content always has to be of high quality in order to stay ahead of its competitors., Inc. Price and Consensus, Inc. Price and Consensus |, Inc. Quote

Amazon currently has a Zacks Rank #3 (Hold). A better-ranked stock in the broader technology sector is Mercadolibre, Inc. MELI , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Listen to all the details of the new Amazon-NFL deal on the latest episode of the Zacks Friday Finish Line:

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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