The Real Winners of Amazon’s Thursday Night Football? Advertisers.
Thirteen million viewers watched Amazon Prime’s first exclusive Thursday Night Football coverage on September 15th. These numbers, provided by Nielsen, tout a nearly unqualified success for the tech giant and streamer. While the Chargers vs. Chief’s game averaged what Fox was getting for its Thursday football broadcasts, there were fears it would be much lower due to the NFL’s older-skewing demographic. (You can imagine a lot of phone calls to grandchildren asking for tech support or Amazon passwords in the first minutes of the game.) While the primary winner is Amazon, which reported historic subscriber gains during the game, the data released by Nielsen might be even better news for advertisers.
Since the rise of Netflix and the beginning of the streaming wars, TV-watching habits have changed drastically, and cord-cutters have skyrocketed in numbers. Those services, particularly Netflix, were often ad-free. Along with this change came an explosion in social media consumption, from YouTube to Facebook, Instagram, TikTok, and more. Broadcasters and cable companies have faced a crisis, a plummeting audience means advertisers have switched a lot of their spending to social media. Furthermore, the reliable influx of cash from cable bundles has dissipated. Yet cable companies and over-air networks have been kept afloat largely by news and sports, particularly football. Since 2010, NBC’s Sunday Night Football has consistently been America's top-rated broadcast.
While Amazon’s Thursday Night Football isn’t getting more eyeballs than Fox was last year, there are three revelations from the Nielsen ratings that make this a sea change for TV. First, they were able to lower the average age of the audience by around 7 years (about 46 for Amazon compared to 53 for legacy broadcasters). Second, the audience retention rate was incredibly high compared to linear TV, where people tend to channel surf during commercials. With streaming services, it’s a bigger hassle to switch on your smart TV to Netflix or Hulu during ads, so audiences are more likely to sit and endure the commercials. Finally, that inability to channel surf decreases the chance that the audience will get distracted by another program and switch if the game is too slow. The caveat there might be with desktop viewers, who can open another tab.
This is exactly the kind of audience advertisers are looking for: a high-quality, attentive, younger, and large demographic. Since switching spending to digital platforms, companies have had to contend with a totally different method of consumption. Ads on YouTube, Facebook, and Instagram are usually very short, and users typically are skipping or scrolling past them. Think of the 15-second pre-roll before YouTube videos, or the five seconds advertisers have before the “skip ad” button appears. It leaves companies with a very short time to make an impression, and the cost of advertising on these platforms has only skyrocketed. While NFL ads aren’t going to be cheap, the future of streaming is going to be supported by ads and it could be even more effective per dollar spent than social media.
With Netflix introducing an ad tier to their service, the big streamers are realizing that advertising is the path toward profitability. Many already include ad tiers, with the most successful streaming ads being on Hulu. What streaming ads can do that linear TV can’t is targeted ads. Amazon could potentially include ads based on your purchasing or browsing history.
The broadcasters still have long contracts with the NFL, NBA, and other leagues that will likely keep them afloat for another decade unless cable subscribers drop even more drastically. But a bidding war is on the horizon, and we could see Netflix trying to get NBA Saturday Primetime for their massive 220 million subscribers (not including password sharing). Compare that to cable: after last year’s 5% drop, the top seven cable companies combined only add up to 43 million subscribers. The bottom line is that the advertising world will continue to evolve quickly as people change the way they watch programming. So tighten your seatbelt and get ready for the ride.