Quote:
Originally Posted by jfman
If Amazon had a credible plan they'd have made a bid last time out, when the value of the rights fell overall. This has all been a myth peddled by Richard Scudamore, and others, to try to push the value of the rights up and it failed.
My confidence comes from the fact it's a lot of money that is difficult to recoup in such a short timeframe without the existing and established high ARPU customer base. Does your average Amazon prime customer, of which I am one, want to pay £40/50 a month for a TV package that includes the Premiership?
It then creates a model where Prime in the UK diverges from Prime in the rest of the world, a low cost fast delivery option with a TV/music add on. Unless of course they want to swallow up key content in those markets too, in which case you'd be into tens of billions a year on content.
So with £5bn, why England? why football?
They'd arguably get better value buying an existing media company it's content and customer base and integrating Prime into it's products.
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A couple of things here.
Firstly, none of us, including Amazon probably, know whether they will make a massive bid for rights in the future. What they have done is dip their toes in the water and see what the temperature is like. If its favourable to them, then I suspect in three years time it will be gloves off and they will try and by up all the rights. Evidence of this will come beforehand if they start to lobby regulators and government about being allowed to buy all the rights.
Secondly, on customers and recouping costs. I think you know Amazon has a "few" customers and currently at least 200m prime customers. Who knows how many other customer credit card details they have, but I'd suggest it's a "few".
There's a massive up-sell potential in terms of traditional "old" linear tv advertising to more targeted methods... The data they have on customers must be immense and very valuable.
Finally, Look at what Amazon themselves have said about Prime. They want people to view it as another utility like a cable tv bill or water bill. Then extrapolate where they might go with this and look at how much other utilities like gas/electricity/water cost...
Whatever Amazon may pay out for rights in the future, if they choose to do so, I would expect they would get their bucks back ten fold.