The Golden Boot: Why Amazon Could Become Top Scorers By Acquiring Premier League Rights

As the auction process for the renewal of the English Premier League (EPL) television rights comes to a conclusion next month, the rumour mill has begun churning out the names of digital platforms with increasing regularity as rivals to Sky’s and BT Sports’ current domination of the UK market. The one name which has become synonymous with the digital encroachment onto one of the most lucrative properties in modern sport is the e-commerce giant, Amazon, who could potentially add Premier League soccer to their growing sports portfolio that already includes the NFL and the ATP Tour.

Despite the vast initial financial outlay needed to secure the rights, it would be far from a gamble for the streaming platform, which could be better positioned in many ways to harness the EPL’s incumbent popularity than the current traditional broadcasters.

Bragging Rights

Focusing solely on the UK market, where the EPL has the most prolific viewership, Sky UK has dominated the coverage of the league for the last 25 years alongside BT Sport, who more recently took over ESPN’s share of Premier League games in 2013. The rumoured presence of Amazon’s deep pockets in the latest bidding process will be unwelcome news to both broadcasters and it is expected to result in a 40 - 45% increase in the cost of the seven match packages available (according to The Guardian as of August 2017).

It is most likely that Amazon will ease themselves in gently with just one of the smaller packages (20 matches). This would be prudent for the online streaming platform since the UK EPL audience is slightly less likely to engage with online subscription services compared to live broadcast television.

The good news for Amazon is that thanks to 25 years of paying a premium for Premier League matches, the British EPL audiences over-index considerably in paying for a subscription both on cable/satellite and IPTV, meaning it should be a relatively smooth transition for the audience on to another subscription service.

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Even better news for the e-commerce behemoth is that the UK EPL audience acutely over-indexes on their Video Prime service already. In gaining Premier League rights, Amazon could potentially attain parity with Sky’s online service, Sky Go, among the same audience’s likelihood of using the service.

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In terms of value online, this would be weighted heavily in Amazon’s favour as a month’s subscription to their all-inclusive Prime service is roughly the same price as a 24-hour pass to Sky Sports on Sky Go in the UK. The real test for Amazon, however, will be whether they can lure Sky TV subscribers away from the satellite service by offering Premier League soccer for a lower subscription cost.

This will mostly depend on how many matches Amazon can acquire during the upcoming rights auction. If Amazon decides to go toe-to-toe with Sky by buying up a similar amount of games, then it could leave the satellite service reeling as it is highly unlikely they would be willing or able to match Video Prime’s low monthly subscription cost (currently some 50% cheaper than a month’s subscription to Sky Sports on satellite). However, as stated before, if Amazon decides to start with a much smaller amount of games, the initial target for the streaming platform should be using their low price-point to attract existing Sky TV and BT Sports subscribers as an additional service.

Away from the undoubtedly fierce rivalry that would emerge amongst the three potential EPL rights holders, there is a murkier portion of the UK audience that Amazon would be in prime position to take advantage of.

Keeping Youth Onside – and Off Illegal Streaming

According to a BBC Sport poll conducted in July 2017, where 1,000 Premier League fans were surveyed on their viewing habits, nearly 50% of EPL followers have streamed a live Premier League match through unofficial means, with one in five doing so on a weekly basis. The culture of illegal streaming has been a growing and concerning one for the Premier League and, such is its prevalence among UK soccer fans, the BBC itself advertises its live coverage of FA Cup matches – both online and broadcast – as a safer and superior viewing experience to the unauthorised practice. And this could prove to be a legitimate strategy for Amazon to adopt as well if they do enter into the EPL market.

The aforementioned BBC poll reports that under 34’s are considerably more likely to use an unofficial online source than their 35+ counterparts – with 65% of 18-34-year-olds engaging with illegally streamed EPL matches, compared to 33% of 35-54-year-olds and just 13% of those aged 55+. Conveniently, for Amazon, the usage of Video Prime is significantly more likely among 16-34-year-olds:

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There is a further layer of pertinence to taking advantage of this younger audience, which could dictate the match packages Amazon are considering bidding on based on the EPL teams involved.

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As seen above, the EPL teams who have the most interest among UK Video Prime subscribers are Chelsea FC and Manchester City. Possibly thanks to the resurgence of both these teams as Premier League champions over the last thirteen years, their fanbases skew toward younger followers.

It would be judicious of Amazon to target the packages containing games which feature either Chelsea and Manchester City (the latter of which the streaming service has already commissioned a fly-on-the-wall documentary series of) to attract this younger audience away from their illicit viewing habits. The relatively low price point of Video Prime’s subscription could easily be offset by the peace of mind granted by the quality, variety and security of the platform compared to the illegal EPL streams, which can carry the risk of malware and are often of poor quality that suffer frequent interruptions (not to mention the legal ramifications that could be incurred from the viewing these streams).

While the bidding for EPL television rights is decided entirely by the highest spender if Amazon could begin to erode these freeloading viewing habits, this would be extremely welcome to Premier League, both as a product and a brand.

Shots On Target

The opportunity here also goes beyond just subscription revenue from Prime since Amazon are planning a major advertising push in 2018, the live streaming of EPL matches on Amazon's service could prove to be a major asset in furthering the e-commerce giant’s plans to become a dominant global advertising platform. 

This potential is certainly underlined when you look at Amazon Prime Video’s popularity with the top 25% income group within UK Premier League audience:

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Although Sky Go currently holds significantly more sway with the high-earning demographic, Amazon's offering could be more attractive to advertisers looking to engage affluent UK Premier League audiences given they will likely be able to segment and target based around their on-platform purchasing habits - just one of the many advantages of being attached to the world’s biggest digital storefront!

If Amazon does become the first digital platform to hold rights to soccer’s most watched league, this would be as good a confirmation as any that the digital revolution has firmly taken hold in one of the last bastions of traditional broadcast television - and the advantages such an acquisition would hold for Amazon would be both numerous and likely rewarding, to say the least.

If you're interested in learning more about the Audience Intelligence solutions we offer here at EntSight then take a look at our website to find out more or drop us a message.

David Murphy

David Murphy

EntSight Researcher