Faster than you can say "Put me in, Coach," Amazon (AMZN -1.05%) is paying its way into the starting lineup of the NFL broadcasting realm's upper echelon. The leading online retailer's deal last week for exclusive rights to Thursday Night Football is a game changer.
Amazon has been sharing broadcasting rights to Thursday night games (outside of Thanksgiving) with Fox for a couple of years now. Amazon reached out to streaming football fans; Fox grabbed the larger audience watching on cable, satellite, or live TV streaming plans.
But it will be all Amazon come 2023, and that's great for the e-tailing giant. It's reportedly paying $1 billion a year for 11 years of these rights, but the real winners piggybacking on this move could be Roku (ROKU -2.07%) and fuboTV (FUBO -3.14%).
Calling an audible
Amazon's move is bold. It will make Prime Video a more necessary app for diehard NFL fans. What it will ultimately do is speed up the migration to streaming services and away from linear TV that has been the stronghold of cable and satellite behemoths.
Amazon will get an obvious boost, but how are you going to watch these games? Once you cut the cord, how will you catch live sports when it's not an autumn Thursday night? This is where Roku and fuboTV will step up as major beneficiaries without having to chip in to cover Amazon's big check to the NFL.
In a new note on Monday, Jeffrey Rand at Deutsche Bank points out that Amazon's move will be a positive for Roku and the entire connected-TV industry. It sees sports enthusiasts as the biggest holdout from the streaming revolution. Amazon's exclusivity when the 2023 NFL season kicks off could be the final push to thrust those viewers into the digital online-tethered future. The shift will rattle some media stocks, but it will also be a dinner bell for the leaders of the streaming revolution.
Roku has become the streaming hub of choice for viewers. As of the fourth quarter of 2020, there were 51.2 million homes leaning on Roku's operating system to fuel their living room content. Roku's hub is factory installed in 38% of the new smart TVs sold in this country, and otherwise, you can buy a Roku dongle or media device for as little as $30 to school up your not-so-smart TV.
One can argue that Amazon's Fire TV will be the real winner here. Can't Amazon just make Thursday Night Football exclusive to users of its Fire TV gadgetry? Good luck with that suggestion. Regulators would be all over the country's third most-valuable company if it went that route, and you can be sure that the NFL would have something to say when ratings plummet for its product.
Amazon will have more leverage if a rival device maker wants to reconsider offering Prime Video on its platform, but the ultimate winner will be streaming itself. Roku is going to benefit from the wave of cord-cutters without having to pay the NFL.
This is where fuboTV will also be a big winner. Traditional TV will be less useful in two years for NFL fans who want to watch all of the available football. They will need to set up a streaming service for Thursday night unless they happen to live in the home markets of the two teams playing in that week's game (those contests will air on local network affiliates). It will be a no-brainer to cancel cable and satellite TV at that point, and if you're a sports fan, you're going to consider live-TV streaming platforms for access to real-time sporting events. So fuboTV's smart "sports first" emphasis (offering roughly three dozen sports channels among its 120 or so live TV options) will make it stand out.