Editor’s note: The following is a guest column by veteran MMA journalist Zach Arnold. His work can be read at FightOpinion.com, and also be found on Twitter at @FightOpinion.
Big, bad Amazon’s appetite for sports content isn’t going to stop with NFL Thursday Night Football. If Jeff Bezos is fast on his feet, he could promptly add some UFC content to his online portfolio and put ESPN on the brink of irrelevance.
Cord cutting and shaving isn’t going away. Comcast, Charter, and AT&T are feeling the heat with lost subscribers. ESPN reportedly lost nearly 500,000 households in a month. They’re losing money fast and could drop the NFL in four years. If ESPN doesn’t start buying actual sports leagues, their business model will go the way of the dodo bird.
Silicon Valley is taking legacy media to the cage and grinding their faces against the fencing. Youtube is a top Fox Sports & MLB sponsor for the World Series. Your “smart” television already is connected to the internet. Wait until you see the new streaming options included with new ATSC 3.0 4k Ultra HD over-the-air channels you can pick up for free with an antenna. These are the kind of streaming delivery options that Dana White recently discussed with Jason Gay of the Wall Street Journal.
With this Silicon Valley distribution onslaught, Fox Sports faces real pressure to keep UFC in its sports portfolio. They need UFC programming to keep Fox Sports 1 relevant. The only difference between ESPN and Fox Sports 1 at this point is FS1 not being crippled by a massive NBA contract.
Fox Sports remains the likely favorite to keep UFC… but don’t sleep on Amazon from snatching some UFC programming. Amazon can offer UFC two major benefits no other business partner can.
UFC Fight Pass needs some CPR. It could also use some better public relations for customer service. Amazon is king of customer service. Amazon knows what you want and anticipates what you want before *you* know what you want to buy. Amazon’s psychological marketing is amazing. If anyone can convince Americans to buy Reebok UFC Fight Kits, it’s Amazon. Amazon is the king of data mining.
Know what else Amazon is king at? Cloud computing services. Amazon’s cloud computing business is so powerful that they signed a $600 million contract with the CIA. If the spooks think Amazon can deliver their intelligence, imagine what kind of data mining UFC and Amazon could share in collaboration about their customers.
Amazon would present UFC an incredible opportunity to monetize their merchandising and video streams. After the Conor McGregor/Floyd Mayweather Jr. PPV streaming debacle on Fight Pass, UFC turned to FITE TV to handle US PPV streaming video. Imagine what UFC could do streaming video on Amazon Prime. The sheer bandwidth & audience size of Amazon Prime is a giant threat to cable television. Amazon Prime has more subscribers than ESPN has households. People actually pay to use Amazon Prime. Cable subscribers don’t want to pay for ESPN and are fleeing for their lives.
The key to unlocking the gargantuan potential of Amazon Prime video is sports. Amazon got the rights to NFL Thursday Night Football games at a fraction of the price ESPN paid for Monday Night Football. $50 million versus $1.9 billion. Plus, Amazon didn’t pay for any production costs. This is big.
In his recent Wall Street Journal interview, Dana White emphasized a desire for UFC to maintain production control over its television product. This was the standard business belief under old Fertitta family ownership. Under Ari Emanuel’s ownership, we’ve seen various rumors/trial balloons in the press that UFC would consider giving up (read: outsourcing) production control of UFC’s TV product. If UFC is willing to keep production in-house, Amazon becomes an incredibly viable streaming option. Amazon wants the sports product. They don’t want to produce it. Amazon Studios is busy churning out content for every other genre.
If Ari Emanuel is willing to play ball and offer Amazon a ready-to-stream UFC product, the two sides can work out a marriage that could explode profit margins on advertising, merchandising, and licensing rights. Fox Sports is a dynamic business partner but Amazon is Best of Breed and has the capital to invest in UFC’s long-term future.
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