Tuesday, November 28, 2023

The NFL and Amazon Are Coming for Black Friday … and Your Holiday Spending

Must read

Editor’s note: Amazon has run ads for Thursday Night Football on the Ringer Podcast Network, including The Ringer Fantasy Football Show, which is hosted by the author of this piece.

Last November, Dallas Cowboys owner Jerry Jones described the NFL’s business model to The Washington Post. “We get up and go to bed at night asking people to look at us,” Jones said. “‘Don’t turn away. Wait a minute, you’re not paying attention. Look at us.’ That’s what we do.”

The NFL’s latest “Look at me” stunt will occur this week, when the New York Jets host the Miami Dolphins in the league’s first game on Black Friday. The game will be available exclusively on streaming through Amazon Prime Video, allowing anyone with an Amazon account to watch football while they virtually window shop.

Thanksgiving is defined by family, friends, and football. By expanding into Black Friday, the NFL and Amazon are marrying “content and commerce,” according to Danielle Carney, Amazon’s head of NFL sales. With the NFL’s quest to take more of our time and Amazon’s quest to take more of our money, they look like a perfect couple. But this game marks something larger than the holiday shopping kickoff for football fans.

Live sports rights are more valuable than ever, with rights payments worth an estimated $25 billion this year and climbing to $30 billion by 2025. The NFL’s most recent round of media rights deals was valued at $110 billion over 11 years. That comes out to $10 billion a year, which means the NFL is making more per year from its media rights fees than the most recent GDP for 60 different countries. That includes Amazon’s payment of $1 billion a year to air Thursday Night Football through 2033. That broadcast has become Amazon’s livestreaming laboratory, and this Black Friday game is the NFL’s latest experiment into how much more value can be squeezed out of live sports.

For years, the NFL has steadily taken over the holiday calendar. It has long dominated Thanksgiving; last year’s three games averaged 33.5 million viewers (Fox estimated 42 million people watched Jones’s Cowboys beat the Giants last year). After 40 years of having the Cowboys and Lions each host games on Thanksgiving Day, the NFL added a prime-time game on Thanksgiving in 2006, creating nearly 12 hours of football content. But recently, the NFL has more aggressively scheduled games on Christmas, a day that was long the NBA’s domain. Last year, the NBA’s Christmas slate averaged 4.3 million viewers per game. The NFL’s three games averaged 22 million viewers, roughly five times larger. Even on Christmas Eve, which isn’t exactly a traditional TV-viewing holiday, the NFL drew 28 million viewers to its Eagles-Cowboys broadcast. The NFL already took Sundays away from Jesus, so perhaps it was just a matter of time before it came for Christmas too.

But the NFL is not content with owning Sundays and holidays. The league added Monday Night Football over half a century ago. It added Thursday Night Football in 2006, chipping away at a day that was associated with college football and the NBA. Now the NBA has reduced its Thursday slate during the NFL season. And because of the Sports Broadcasting Act, the NFL is legally prohibited from scheduling games on Saturdays until college football’s regular season concludes, but it starts them almost as soon as it is able in December. The NFL has even managed to invent football holidays out of thin air. The first round of the NFL draft, which is essentially Roger Goodell reading a list of names, gets more viewers than the World Series. What better place for NFL expansion than a holiday that was invented so people can spend money?

But the league’s decision to put that Black Friday game on Amazon is an experiment that could yield even higher rewards—and also a BFF (Black Friday Football) relationship with one of the few entities that may have an even larger appetite for expansion than the NFL. Black Friday already was Amazon’s Super Bowl. Now it’s got a football game during it too.

“We’re eventizing the day,” Carney says, “for advertisers and for fans.”

Amazon first began exclusively producing the Thursday Night Football broadcast for Prime Video in 2022. This season, the streaming service is averaging 12.5 million total viewers on Thursday Night Football, per Amazon. This Friday’s broadcast is expected to bring in Amazon’s biggest football audience yet for one reason: It is removing the Prime paywall. Instead of requiring viewers to have a Prime subscription (which costs $139 a year), all you need to watch on Black Friday is an Amazon account. It’s like if Costco held a football game inside the store and didn’t check anyone’s membership cards at the door. Except Amazon expects more than 12 million people to show up. That is why, for the NFL and one of its biggest business partners, there is a lot more riding on this game than whether the Dolphins can hold on to their lead in the AFC East.

For those who tune in on Friday, the game may not feel much different at first. That is by design. Amazon has gone to great lengths to make sure that its Thursday Night Football streams look and sound like traditional NFL broadcasts. It even hired legendary producer Fred Gaudelli and play-by-play announcer Al Michaels from NBC, essentially making the Thursday Prime feed the AmazonBasics version of Sunday Night Football. (Gaudelli pulls double duty and continues to produce SNF as well.)

But outside the traditional broadcast, Amazon is trying plenty of new things too, like with the Prime Vision feed that integrates advanced stats, traces receiving routes, highlights potential blitzers, and shows the names of the players subbing in and out. If the main stream is showing how Amazon can be, uh, mainstream, then the Prime Vision stream is a testament to how fresh eyes and a few small tweaks can enhance and advance the viewing experience in the 21st century. “[Amazon] always wants to be thought of as doing something a little different,” says Brad Stone, the senior executive editor for technology at Bloomberg and author of two books on Amazon.

The Black Friday game may be the lab for similar progress but in the art of updating the league’s advertising business and trying to convert football fans into Amazon shoppers.

The largest experiment is what Amazon is calling “interactive” ads, which basically give viewers a way to buy stuff (or at least indicate they want to buy stuff) during the game. On Amazon Fire–connected TVs, select commercials can be pushed to a viewer’s phone or email with the click of the TV remote (or a tap if they’re watching on a mobile device). Amazon will also have seven Black Friday deals, for brands like Dyson, Lego, and Nintendo, mentioned on the broadcast throughout the event—likely one pregame, one during each quarter, one at halftime, and one postgame. Viewers without an Amazon-brand TV will be served up a QR code to direct them to a page to buy the product.

When fans have the opportunity to click to buy something directly from a commercial—or if the Amazon app is prompting them to buy something from a commercial that is airing in real time during a football game—the line between commercials and concessions becomes blurred.

Consider that a 30-second Super Bowl commercial is selling for as much as $7 million this season. But how much more money would companies pay if the commercial doubled as the point of sale, as it could on Amazon? How much more could that 30 seconds be worth if viewers could tap their remotes or phones twice to buy the product right then and there? Twice as much? Five times? More?

“That value is not for me to say,” Carney says. “Every advertiser is going to put a different value against that.”

Carney pauses, then lets out a smile. “I think it’s extremely valuable.”

One counterintuitive answer to that hypothetical question of value: Perhaps the commercial would cost less because eventually, ads during live sports will look a lot like internet marketing. Instead of traditional commercials, which are like unchanging billboards on the side of a highway visible to everybody on the road, commercials would become more like what we see on YouTube, where ads target smaller groups of people who are more likely to be interested in the product. “It’ll probably be less valuable in terms of cost,” says Raj Venkatesan, a professor of business administration at the University of Virginia. “But it will be higher in terms of [return on investment].”

With streaming partners like Amazon and Google, advertisers may eventually be able to target viewers based on what they know about them using data gleaned from their internet footprint and shopping habits. But they can also incorporate basic data, like age. Perhaps showing boomers fewer ads for cheap beer and zoomers fewer Cialis ads with couples in bathtubs will both improve the viewing experience and benefit the advertisers.

Amazon isn’t using the digital style of finely targeted advertisements on its football broadcasts quite yet. Right now, Amazon still sells a commercial time slot to a single company, and that company can show different ads to different people based on what those people may be more likely to buy (for example, a car company will buy the whole commercial slot but might place ads for minivans to people whose data indicates they are parents and ads for sedans to people who are not). Amazon doesn’t call this “user data” or “targeted ads”—the company prefers the term “first-party insights,” which allow companies to offer “audience-based creative” ads.

But in a Thursday Night Football contract that stretches to 2033, it’s not hard to imagine that ads during a game might eventually feel as personalized as the ones on YouTube, or even the banner ads that follow you around the web.

“That’s not even a question,” Venkatesan says about whether Amazon and YouTube will eventually tailor ads to specific people during live sports. “That will be totally personalized. Like with ChatGPT, with AI, the ad will get generated in real time.”

Amazon gleans some of the most valuable data by tracking people’s purchasing patterns. But YouTube, which now has the rights to NFL Sunday Ticket and is owned by Alphabet and operates under Google, has better ad tech and even more data than Amazon. As NYU marketing professor Scott Galloway wrote in his book The Four, people tell Google things they don’t tell their spouses, doctors, or priests. Amazon and Google already know your past and can track you in the future. With their investment in live sports, Google and Amazon are buying your present too. And they’ll probably use it to remind you to buy that air purifier you clicked on four months ago. They may not stop with football, either. Jay Marine, Amazon’s global head of sports, told John Ourand and Andrew Marchand this week that Amazon is looking into streaming NBA playoff games in 2025.

But whether Amazon can actually convince people to buy more products outside the context of Black Friday remains to be seen. Watching football is a lean-back experience. Buying things is a lean-forward experience. And the NFL, which exhibits some control over how the league is presented on TV, doesn’t necessarily want its games stuffed with so many ads that the vibe changes.

“We’re gonna be very mindful and protective of the viewing experience but find ways to give our fans some innovative and new ways to engage with what Amazon does so well,” says Hans Schroeder, the executive vice president and chief operating officer of NFL Media, whose job includes helping negotiate the NFL’s media rights deals and overseeing the creation of the NFL schedule. “When you’re in a world where you get more data with digital platforms, it’s just going to give us that much more opportunity to leverage the data.”

Schroeder notes that the NFL has changed as new platforms have evolved. The NFL went from the radio to TV (through antennas and then cable and satellite) and now to streaming. The backbone of the NFL’s distribution is still through traditional broadcasts on traditional broadcast networks like CBS, NBC, Fox, and ESPN. Right now, Amazon is mostly providing reach to its audience, which is, on average, seven years younger than the average viewer on linear TV, per Amazon.

Is this a revolution or merely a long-overdue change to an outdated business model?

“It depends on how far Amazon is willing to take it,” Venkatesan says. “Thursday night is one thing. If they start bidding for Sunday Night Football or a Super Bowl, you got something coming here.”

Just a few years ago, it would have been unimaginable for the Super Bowl broadcast to be awarded to a streaming platform. It’s not so far-fetched now. Companies are beginning to separate themselves in the streaming wars. Max, Peacock, and Paramount+ seem directionless. Meanwhile, as Puck’s Matthew Belloni explained on The Bill Simmons Podcast last week, Netflix is trying to become the global TV channel. YouTube is already the definitive place for video, and landing Sunday Ticket puts it in an even stronger position to eventually become the new cable bundler—or as Puck’s Julia Alexander wrote last month, the “platform of the platforms with billions of users, the one upon which most other streamers rest.” This Black Friday game is where Amazon can attempt to not only sell us stuff, but also bring more people into the Amazon ecosystem: watching Amazon Prime Video on an Amazon Fire TV, seeing ads served by Amazon Web Services promoting an Amazon Kindle on which you can read books purchased in the Kindle Store. It’s basically the Xzibit Pimp My Ride meme but for one of the largest companies in the world.

Now your football fandom and holiday shopping are being woven together within that Amazon world. On Friday, the main story will likely be whether the Dolphins can beat the Jets and take a commanding lead in the AFC East or whether third-string Jets quarterback Tim Boyle can lead a stunning upset now that Zach Wilson has finally been benched. At first glance, the broadcast will look mostly the same, just with more Black Friday–ness. Maybe you’ll buy Christmas gifts. But this is just year one of the NFL’s expansion into a new day on the holiday calendar.

“There’s just so much more we can do,” Schroeder says. “We’re still just scratching the surface.”

The NFL has found another day that we will watch football. As Jerry Jones said, the league wakes up and goes to bed every night asking people to look at it and never turn away. In this marriage of content and commerce with Amazon, the NFL has finally found a partner that understands it.

Latest article