Amazon Prime Video's (AMZN) debut of the first Black Friday NFL game — between the New York Jets and Miami Dolphins — serves as the latest blow to traditional, or linear, television.
Amazon agreed to spend $1 billion annually for its 11-year NFL Thursday Night Football deal while Google's YouTube (GOOG, GOOGL) coughed up a reported $2.5 billion to acquire the sought-after rights to NFL Sunday Ticket.
The deals come as old-school media grapples with steep streaming losses and major declines in linear advertising revenue. Cord-cutting has accelerated, with linear TV viewership falling below 50% for the first time in July while Big Tech has utilized its deep pockets to snatch up pricey sports contracts.
On average, media networks — whose parent companies include Disney (DIS), Paramount Global (PARA), Warner Bros. Discovery (WBD), Comcast (CMCSA), and others — posted another 12% decline in revenue from linear ads during Q3 after reporting a 13% decline in Q2, according to a recent note from Macquarie.
Companies warned that the negative trend will likely continue, with Macquarie anticipating another overall 12% linear ad market decline in the current quarter.
It's a much different story compared to non-linear TV ad sales — such as advertising video-on-demand platforms, connected TV, and free ad-supported services, or FAST formats, like Roku — which grew by 7%, according to a recent report from media investment and intelligence company Magna Global.
Direct-to-consumer (DTC) services posted 29% average ad revenue growth thanks to new advertising tiers introduced by Netflix (NFLX) and Disney. Alphabet (GOOG, GOOGL) and Meta (META) also saw renewed strength in digital advertising.
Amazon and the NFL: 'A perfect marriage'
Amazon will reportedly charge $880,000 for a 30-second ad spot, more than double the traditional rate for Thursday Night Football games, according to AdAge.
Danielle Carney, head of NFL ad sales for Amazon, confirmed earlier this month the tech giant sold out of all of its ad inventory for the Black Friday game, which cost a reported $100 million for the exclusive streaming rights. Non-prime viewers will also be able to access the game.
Carney added there will be "twice as many interactive video ads airing" during the game, such as QR codes and interactive banners, compared to its typical Thursday night game. Ad buyers will include Google, Columbia Sportswear, Bose, Carnival Cruises, and Hasbro.
Read more: 6 ways to save money on your Black Friday shopping list
The company will also promote products on its extended pregame show, in addition to leveraging a new "audience-based creative" strategy to better target different audience segments.
"When we talked with the NFL, this is a perfect marriage," Prime Video vice president Jay Marine told the Associated Press (AP). "Black Friday is a huge event for us every year. We're really putting everything behind this."
Besides it being the biggest shopping event of the year, Amazon is also hoping the Black Friday game will be an extension of the NFL's Thanksgiving Day winning streak.
Last year's Thanksgiving games averaged 33.5 million viewers, including the most-watched regular season game of all time between the Dallas Cowboys and New York Giants, which attracted a whopping 42 million viewers.
"It’s an opportunity for us to continue to innovate with Amazon," Hans Schroeder, NFL's executive vice president for media distribution, said in a statement to AP.
"I think some of what they’ve done this year on Prime Vision is exciting with seeing that intersection of data and AI predictability and taking fans deeper inside of X’s and O’s," he added. "I think the viewing experience will feel a little bit different and unique for that day and appropriately. We’re excited about that."
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.
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