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Originally Posted by OLD BOY
The return on investment comes from football subscriptions, jfman, just as that is how Sky make their profit from it (+ advertising, of course).
I don't know why you are so fixated by the fact that Amazon only picked the bargain basement matches. It was their first toe in the water, and a relatively inexpensive way of judging the success of sports streaming in the UK and their ability to attract subscribers.
They were reported to be pleased with their little experiment, so it remains to be seen what will become of it. As you correctly pointed out, they have very deep pockets, so anything is possible.
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So it's entirely hypothetical at this stage?
I'm fixated by reality Old Boy - the bargain basement rights purchase exists in actual reality. The £5bn+ blow Sky/BT out the water bid exists in your dreams alone.
You do realise that there has to come a limit somewhere where revenues can no longer be extracted from football rights - whether the value is too high, or the revenue streams have become exhausted at the optimum price point. If the market is at that point - as Sky seem to think by bidding less for football rights this time than last - why will Amazon make a success in 2022 when they did not bid in 2019? What changes?
If Amazon do make a roaring success of the bargain basement rights they pick up - and get Prime into the majority of homes - where's the incentive to take the risk of a football package on top of the basic package? At what price point does such a service exist? More expensive than Now TV I'd suspect.
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I don't auite get your reasoning. Why can Sky and BT do this but not Amazon?
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It's debatable whether BT are profiting from their sports rights alone, or offsetting losses elsewhere (e.g. improving market share for broadband).
If it was as easy as "if Sky can do it anyone else can" why have we the graveyard of ITV Digital, Setanta, ESPN and others who have exited the market?
Sky have an established customer base and significant market power in the market. It's far from easy for someone else to just rock up, commit to billions in expenditure and emulate their success from day 1.