Amazon is making a statement which is bad news for traditional broadcasters, especially Disney.
We know the company has moved into movies and television with Amazon Studios. The purchase of MGM really enhanced the library the company can offer. This is included in the Amazon Prime subscription.
Now we are seeing the company further expanding its presence in television. This is a step on a path that could really harm Disney and some of the other traditional media companies.
Sports is a realm where big money is required.
Regional Sports Networks
Amazon is opportunistic. Here we see a move that could really enhance their offerings.
Amazon is now a minority owner of Diamond Sports Group’s Bally Sports regional networks.
Diamond announced Wednesday that Amazon had taken a minority stake in the company as part of its bankruptcy restructuring. More significantly for sports fans across the country, Amazon’s stake in the company means that games televised on Bally Sports channels will be available to local fans via Amazon Prime.
Nearly 40 teams across MLB, the NBA and the NHL have local television contracts with Bally Sports regional affiliates, but not all television providers have deals to carry Bally Sports networks. YouTubeTV users have long been unable to watch their local teams’ games without subscribing to Bally Sports’ streaming service.
Now, those fans should be able to see their teams play if they have an Amazon Prime subscription.
This is the basis of Amazon's strategy. Every move is done with the intention of enhancing the value of Amazon Prime. I wrote about this before: if you are in the Amazon ecosystem, Prime is a no-brainer. In fact, you are pretty much foolish for not having if you use anything from this company.
Now we have an addition to the NFL game the company broadcasts.
Of course, more could be coming.
Trouble For Disney?
As I wrote on a number of occasions, Disney is a dumpster fire. This is not going to end well for that company.
Amazon, along with Apple, are ready to play in the big time with sports. It is an expensive business, one that requires huge contracts to basically rent the games from the leagues. Disney and others long were the ones bidding on the rights.
Now, Amazon can enter, with its huge revenue stream, and overwhelm anything offered. Disney, through ESPN, already stepped away from the Big Ten. Will it be able to realistically bid on the NBA and NFL if Amazon (or Apple) wants the rights?
The answer is no.
This means ESPN is going to be in even more trouble than it is. Remember, Disney makes a fortune off the cable and satellite bundle model. Unfortunately for it, cord cutting is accelerating. This means the number of people paying a cable bill is declining. We already saw this number, in the United States, go from 100 million down to around 73 million.
It is not a pretty situation for the entity that promotes itself as the "World Wide Leader in Sports". The subsidy is going away and it will hurt.
Dead By End of Decade
By the end of the decade, I predict ESPN will be dead. Certainly it might still be operating but it will be a shell of itself. This company is going to be overwhelmed by bigger players that get into the arena.
Of course, all of this is without Web 3.0. If we fact that into the conversation, we could see things radically shifting. The business model simply is not designed to combat this layer of the "attention economy".
Disruption is happening in many different areas. We are now seeing it play out in real time. Cord cutting is just one of the issues Disney, through ESPN, is facing. Amazon and Apple are others.
It is not going to end well for them. In the meantime, many fans who were previously missing their local games will be able to see them with an Amazon Prime subscription.