Although it is unclear whether Amazon will be able to reach its targeted ads target at its intended price, or whether this effort will generate it any profit, one has to keep in mind that the e-commerce giant has traditionally prioritized growth over profitability and has not shied away from exploring new territories to learn about market segments.
As per two sources familiar with the matter at hand, Amazon.com is set to charge advertisers $2.8 million for advertising packages which include 30-second spots during Thursday night’s National Football League which will be streamed live to its Prime customers this coming season.
Amazon’s offer is being closely watched by the broadcasting and the advertising industry since this is the first time that the world’s largest online retailer is flexing is cloud-computing muscle to push its way into live sports.
As per sources, Amazon will be shelling out $50 million to NFL to stream this season’s 10 night games.
The games will be shown simultaneously on either NBC or in CBS Corp. They are both broadcasting five games each.
The live-streamed games will be only to subscribers to Amazon’s Prime service who pay $99 a year, which include fast shipping and free video.
“We are offering a range of options at various price points, depending on advertiser objectives,” said Kristin Mariani, Amazon’s representative in an email while declining to discuss specific ad prices.
The move is a potential challenge to video streaming companies, including Netflix Inc, which has so far not stepped into streaming live sports.
As per media reports, Amazon’s pricing is lower than Twitter’s, which charged $2 million to $8 million for advertisement packages, but is higher than CBS and NBC’s, said industry sources.
What remains an open question is how many viewers will choose to watch live-streamed games on Amazon?
Although Amazon does not publish its Prime subscribers, according to estimates by analysts it is likely to be more than 50 million.