Why Is Amazon Increasing Focus On Live Sports?

+13.47%
Upside
180
Market
205
Trefis
AMZN: Amazon logo
AMZN
Amazon

Reports suggest that Amazon  (NASDAQ:AMZN) has hired James DeLorenzo to head its newly formed sports group. This move comes after Amazon bid for streaming rights to NFL’s Thursday night football game, which were ultimately secured by Twitter. And it indicates Amazon’s  increased focus on sports programming for its streaming service. DeLorenzo is a veteran sports media executive. Prior to joining Amazon, he worked in executive roles in CBS and Time-owned Sports Illustrated, where he helped launch the 120 sports digital venture.  While most fans still prefer to watch sports on traditional TV, the shift towards alternative streaming media is gradually taking hold, no doubt driven in part by the cord cutting trend. Amazon’s focus on live streaming of sports appears to be intended to  tap into this trend and attract consumers from the digital millennial generation to its streaming service, which is now offering standalone subscriptions.  We believe this move can give Amazon a competitive edge over players such as Netflix and Hulu and increase its subscriber base in the long term.

See our complete analysis for Amazon

Relevant Articles
  1. Up More Than 100% Since The Start Of 2023, Where Is Amazon Stock Headed?
  2. Amazon Stock Outperformed The Q3 Estimates, What’s Next?
  3. Amazon Stock Is Up 50% YTD, Can It Top The Estimates In Q3?
  4. Amazon Stock Surpassed The Street Expectations In Q2
  5. Amazon Stock Is Undervalued
  6. Amazon Stock To Beat The Consensus In Q1

Innovations Attracting Consumers To Live Sports Streaming

Amazon originally had launched its digital video streaming service as part of an offering to members of its Prime service.  Last month, however, the company opened this service for standalone subscriptions. This indicates that Amazon video is no longer a tool to retain and attract Prime memberships, but a new revenue stream for the company. Amazon faces intense competition from Netflix in this market, which has a strong user base and immensely popular original content. The company’s focus on sports programming appears to be aimed at attracting consumers who prefer to view live action in addition to high quality videos on demand. As an increasing number of viewers prefer alternative media to traditional TV, live sports streaming is gaining momentum. An average of 1.4 million people per minute streamed this year’s Super Bowl.  Innovations in the Virtual Reality (VR) space are making the sports viewing experience truly immersive. TF1 and Viaccess-Orca have developed the world’s first 360 degree, ultra HD virtual reality headsets which are custom built for watching live sports action. The innovations will make viewing sports broadcasts better than the stadium experience, thus attracting more viewers to this platform.  While Netflix management is not focused on live TV another player in this space, Hulu is reportedly launching a live streaming service, which will give consumers access to several television networks such as ESPN and Fox news.

As video consumption on mobile devices increases, advertisers are increasing their spending on digital video. An IAB study found that advertisers anticipate spending more than $10 billion on digital video in 2016 and it is set to become as important as TV, as creative best practices emerge. According to a report from Comcast’s video and ad management company Free Wheel, 83% of live streaming video ad views come from sports.  Amazon’s focus on sports programming appears to be aimed at  capturing the large sports audience and attracting more viewers through innovation in sports entertainment. We believe this move should give the company’s streaming service a competitive edge over players such as Netflix and Hulu and drive revenues in future.

 

 View Interactive Institutional Research (Powered by Trefis):

Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap
More Trefis Research