Inside Amazon’s A-List Sports Strategy

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1:04Congratulations! You made the Varsity, the podcast. My name is John Arand and I am Puck's sports correspondent and the host of this pod. And today we're going to feature an interview that I conducted with Jay Marine. Jay's the head of Amazon Prime Video and kind of an Amazon lifer. He started way back in 2002 working on a new Amazon product called the Kindle. Have you heard to that? He grew into a role as a technical advisor to Jeff Bezos, moved over to Europe, eventually was tapped to lead Amazon's sports efforts, and now oversees all of Prime Video. In this conversation, Jay's going to talk about Amazon's overall philosophy when it comes to sports, and he's going to offer up a roadmap for how sports media could look in the next five to 10 years.

1:51But before we get to Jay Marine, today is Wednesday, October 29th, and here's what I'm watching. Today, I'm all about the World Series. Yes, I was one of the few on the East Coast to stay up until 3 a.m. on Monday night, Tuesday morning, depending on how you view it, watching the Dodgers' great 18-inning win from my house in Washington, D.C. And I'm wondering, did any of you notice, like me, that the game went on for so long that Fox essentially ran out of advertising in the 13th inning. If you watched the last two hours of the game, all you saw were Fox promos for shows on the broadcast network and shows on Fox Nation and shows on FS1.

2:37Colin Coward had a ton of screen time that night. Now, two Super Bowls have gone into overtime, and for each one, I did a story about how network executives would spend the fourth quarter wheeling and dealing in their suite with companies that wanted to advertise in the overtime period. I love those kinds of stories. It's always a story about just a lot of chaos, which is what makes live TV so much fun to cover. But on Monday night, as the Dodgers and Blue Jays went from the 11th inning to the 12th inning to the 13th and so on, Fox's ad sales suite was the opposite of chaotic. In fact, it was probably almost serene.

3:18Because here's the deal. A normal nine-inning baseball game that's won by the home team generally has 76 ad spots on the national network. Games with a ton of pitching changes and other breaks obviously have more. And Fox goes into its World Series games with 108.5 ad spots. And here's the thing. When those 108.5 spots had been used on Monday night, that was it. Fox ended up cutting the rating after the 13th inning. That was at 1230 a.m. on the East Coast. And this should come as no surprise, but even a classic World Series game loses an audience after midnight. I haven't seen the ratings yet for Freddie Freeman's dramatic 18th inning home run, but I can guarantee you that they are really low in just about every East Coast market.

4:10And anecdotally, I can say that that's certainly the fact. I'm in several baseball text groups, and it didn't seem like anyone was still awake in the 18th inning, except for me. Yeah, I'm going to call out one text group in particular. Ricky McAuliffe, you stopped texting in the ninth inning, and Timmy Ryan, congrats, you made it to the 16th inning, but then you went silent. Come on, guys. Anyway, back to Fox. There's a reason why they went with promos instead of regular advertisements. And the truth is that it would make no financial sense to run regular spots in those extra innings. It would actually hurt them to do so because ad rates are dependent on actual viewership.

4:52And once they cut the rating, they had to fill with in-house promos. The other interesting part of this is that Fox is going to release two different sets of ratings. One that goes up until 1230 in the morning, which is when they cut the rating. and then the other one that goes the full game. So that's another unique angle to that historically long game. Okay, now let's get to Amazon's J-Marine. You do have a new role. You just got a big promotion to where you're overseeing all of U.S. Prime video. How does that change your role? Yeah, well, as I said, first of all, I'll stay focused on sports globally.

5:37That's sports rights. That's our marketing, our investments, their production, our advertising business globally. And then what I've added now is the U.S. business overseeing that, which includes entertainment, includes what investments we're making, continue to drive growth in that whole P &L. So it means I'm going to be in L.A. a little bit more for entertainment. I'm already there a decent amount, but I'll be out there a little bit more. And I'm looking forward to it. It's going to be a lot of fun. Are you going to read movie scripts, TV show scripts? I might read some, yeah. I'm looking forward to that.

6:11It'll be fun. But we have a great team. Do you trust your judgment on that? I would be terrible at it. Well, I agree with you. I would not trust your judgment on it. But listen, we have a fantastic team. It's been doing it for a long time. And we have Peter Freelander who just came in, And so it's going to be fantastic on the TV side. So, you know, we have the right creative folks. So that's not going to be my main focus. How much of your time do you spend on sports? Well, it kind of ebbs and flows, right? So when we were doing the NBA deal, a lot. And as we've been getting ready for the NBA, a lot.

6:59Having said that, we've come a long way now, you know, since Thursday Night Football four years ago and before that Premier League and Champions League way back in 2018. We were still really learning how to do it, still building up the organization. Now I just have a fantastic team of leaders that I trust. They know how I operate. So really, they don't really need me. So I picked my spots. This has been kind of a fascinating day for me. Adam Silver, a partner of yours with the NBA, he was effusive in his praise of Amazon and working with Amazon. Hans Schroeder was on stage here. He was talking about listening to a podcast and people were talking about the amount of production trucks in Cincinnati, you know, and how it felt like a Super Bowl.

7:50Yeah. Do you feel like your relationship with these big leagues has changed? No doubt. No doubt. And I think because we've proven it now, and I say that humbly, you know, we're still learning. We're still getting better. We have a lot to do. But if I go back four years ago when we were doing Thursday night football for the very first time, And, you know, there was a lot of reasonable questions, including from people like you, John. I was very skeptical. Is it going to work? How many, you know, are the numbers going to be good? What's the what does Amazon know about production? And all these are fine, well-meaning questions.

8:34And I think and even when we used to talk to leagues back then, I think they were skeptical, not just on us, but I don't know if skeptical or nervous to go to streaming for all those reasons. um now you fast forward and the world looks very different you know on thursday night football i think that franchise has never been as strong as it is with us and i think that's partly our investment it's also the nfl and the partnership on the schedule but we're delivering an audience that's seven to eight years younger and every league every business needs to get younger stay younger because that future fan base is what is going to fuel your future and um and then i think The production quality, what we put on air, not just the streaming quality and the back end and the trucks, but the talent, you know, and how we've gone about that with new faces like Ryan Fitzpatrick and Andrew Whitworth that have really resonated with a younger audience, I think.

9:29So when we were discussing the deal with NBA, I feel like, Adam, you know, as opposed to four or five years before, we were looked at as a preferred partner. Because if you're doing an 11-year rights deal, who has large customer reach? Who is going to be able to reach a younger fan base? And who's going to have the balance sheet and willing to invest and innovate on behalf of your league over the next decade plus? And so I think we kind of became the safer choice in what is really a very short amount of time. You could hear that with the panel that was just up here in terms of being the safe for Troy.

10:10It's no longer a cable channel at TNT. We're going out 11 years in the future. Remind me, when did you get the Thursday Night Football? I know I should know this. Well, it was four years. This will be our fourth season. Fourth season. Yeah. Having it exclusive, we did a TriCast where we were streaming it, but it was still on network. Yeah. When that's all you had domestically, you, of course, were international. You had other rights. And you heard from the leagues and you read reports. Did you block out the noise or did you sort of take that in? How do you deal with it? Going into Thursday night?

10:49Yeah. Yeah. Well, I've been at Amazon a long time, like 23 years. So I have a lot of scar tissue, a lot of failures. Um, and I also know, like whenever you do do something new, um, people will criticize it. Um, and sometimes it might be right, but people will criticize it because it's change. Um, and that's never bothered us. You know, I, I worked on, um, I was one of the first four people that worked on Kindle, another reading device. And, um, and trust me, when we first launched, there was some headlines about, um, how dumb that device was and how, you know, maybe you should just pick up a physical book, which is fair enough.

11:35But so I have a lot of scar tissue. Amazon is, the other part of bringing up those quotes from Adam Silver and Hans Schroeder is, you are now part of the U.S. sports media community, essentially. what is your strategy? Can you boil it down into a phrase or is this like a couple of paragraphs? Try to go in between for you. Well, if it's just a phrase, I'd ask a follow-up. Listen, first of all, everything we do is based on Prime. We work back from Prime members. And really, this is true about the company. We sit around saying, how can we make Prime better? We want it to be the best membership program in the world.

12:23So what does that mean? Jeff used to say we want it to be a no-brainer. We want to give so much more value to people in Prime than they're paying for. You know, we don't like breakage. Breakage in a subscription means like someone bought like a gym membership, but you don't use it. We hate that. We want you to use Prime to its fullest. Use Prime video, use shipping, use music. And so sports was a way when we looked at it and said, sports are incredibly valuable, huge fan bases, passionate. If you love the NFL, you can't watch cricket instead. Right. It's non-substitutable. And so we thought, wow, that would add a lot of value to prime members.

13:05They will care about it. And we think we can go innovate and make some things about it better over time. Um, and, um, and so then you, you start, that's where it starts from. Then you go to like, okay, well, what's your strategy? One, one property versus the next. And for us, for a prime size, it needs to be big enough to move the needle. You'll see us do some other things that we believe on growth sports, but for the most part, we want to invest in tier one top properties that can move the needle. Um, and so if you look at what we've done in the U S that's the national football league, That's the NBA.

13:44That's NASCAR. That's Masters, which we recently got, which I'm very excited about. If you go to Europe, you see Champions League and Italy and Germany and the UK. If you go to Canada, we have NHL. So we really want the best tier one sports that are going to move the needle for prime members. What are some of the growth sports? And well, I think really, like if you look at us, women's sports like WNBA, WNBA is just the I mean, the growth in that league is unbelievable. We have NWSL women's soccer as well. So I mean, am I right in saying those aren't quite moving the needle yet? Yeah. You feel like they will.

14:26Yeah, I think, though, listen, I mean, you know, the sizes they're just smaller. And at the same time, I think women's sports, everyone sees the growth trajectory and they just need to they need continued investment. And you're seeing a lot of investment dollars come in in different ways, right? In teams, et cetera, because everyone sees the opportunity there, I think. So what's unique among the streamers to me is that you have Netflix and they're saying like, OK, we want to how much you hate the word eventize. We want to eventize games. But that to me means. John, we want to eventize this right now.

15:01We're eventizing this final panel of the day. You have Apple, and they're saying, like, we just want to own everything. Amazon, you've gone forward with a strategy that looks and feels to me like a broadcast TV or cable TV strategy. Is that fair or true? I think yes and no. I know why you say that. I think the reality is on big, large tier one sports, for the most part, no one broadcaster is going to be able to own all those rights. It's just not feasible. The league's not going to do it. And so that right there is just not a feasible option. So our point of view is, OK, that's OK. They've been on different networks, multiple networks.

15:52we want to have a meaningful enough package of that tier one sports that prime members are like, wow, that's awesome. And Thursday night football is a perfect example. If you take our NBA deal, you know, we have not only do we have the in-season tournament, but we have all of the play-in games and then we have a third of the playoffs and then we have conference finals every other year. So that is, you know, back five years ago, people used to talk about small little streaming packages. That is not a streaming package, right? That is a major broadcast package. Hey, John Aran here back in the studio.

16:29We're going to take a quick break here. And when we come back, I'm going to ask Jay about the NBA. Amazon, of course, new NBA partners. They just started their deal with the NBA. And I just want him to take us through how he identified the NBA as a league and a property that Amazon wanted to do business with.

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17:55So take us through, when did you first identify the NBA as a property that you wanted? Probably when I was six years old. Big Detroit Pistons fan. That was the rough and tumble the elbows. Bad boys, bad boys. That's the term you're looking for there. Thank you. It's been a long day. No problem. Listen, the NBA is just fantastic, obviously, and one of the top leagues. And they also have a very young fan base. So that's very attractive. It's very attractive for us as we're thinking of the next generation of Prime members. It's very attractive to advertisers. And I also have a lot of faith in the league and the product and Adam.

18:40And, you know, I think the level of talent in the NBA is unmatched. If you go, you know, the guys who can score up and down the bench now. Now, the game's evolved because of that, right? You're seeing more shooting. You're seeing more positionless players. But the strength of the league and our belief in its continued growth. And then you add on, which you'll probably get to this. It wasn't the driver for us, but it is a worldwide sport. And they've done an amazing job growing that. And our rights portfolio is a worldwide NBA deal with them. But in terms of targeting it, did this happen soon after?

19:18Oh, process? Yeah. Well, yeah. So we did a deal. We had a relationship with them before this big deal. We were a broadcast partner in Brazil for a couple of years. We were also a WNBA partner. So we were getting to know each other. We were having conversations. but we couldn't really have the big conversation because they have exclusive windows and those things. But I would say they were learning more about us and we were getting to know them, Bill and Adam. And I think they also, Adam has a very strong belief in innovation and I think really recognize our approach there. And I think that matches the way he thinks about the world as well.

20:02And so, yeah, there was a couple of years of just growing the relationship and talking, but we couldn't really get into the specifics. And yes, we always knew when it comes up, if it becomes available, we would take a very serious look at it. But I can't tell you I knew for sure, like the reality of sports rights. I didn't know what the market would bear. It only takes a couple other players to create the market. and we try to stay very disciplined. So whether our valuation was going to match up with what the market or what the NBA felt they needed, I didn't know until we got into it. So earlier you said Amazon's almost kind of like the safe play somehow.

20:45Three years ago, it certainly wasn't. And you had these small relationships with the NBA. You did have Thursday night football. Did you sense hesitancy at first? like as shit because life has moved fast in three years it's unbelievable how fast it moved you know and and when we would talk to those leagues back then they didn't really want to they wanted to talk to us and they were happy for us to bid because it would scare a lot of other people um but they didn't really they weren't really ready to go to streaming and i think to nfl's credit they leaned in and really did it and the nfl paid attention we helped educate them on what we were doing in Europe with the Premier League, which the Premier League, that's a very high bar if you know the passion of any Premier League fan.

21:31And so it really started to change, not even after we did the Thursday night football deal. It only really started to change after we had success with Thursday night football and people saw the product on air. And trust me, the NBA paid a lot of attention to Thursday Night Football. What defines success? Well, I think from another league looking at it, it's they saw the production quality. They saw the innovation. They saw the streaming experience and the quality of the picture. And then finally, they saw the audience delivery, which has continued to grow. Year three over year one was up 38 percent.

22:11And they see a younger audience delivery. So all of those things match up with what leagues are looking for, you know, and you got to remember four years ago, like we were saying, people didn't know if it was even going to work. They're like, is it going to crash? Which is fair question, right? And now, or will people find it? You don't hear anyone talking about that anymore. So, so, and I - They were legit questions at the time. They're totally legit questions. And I give my team so much credit. You know, we, people worked unbelievably hard to get the scale right and the redundancy and deliver production quality.

22:47And like I said, all the learnings from Europe helped us there as well. I'm a big fan of Jared Stacey, who oversees the production. Me too. He's great. And so I think the studio shows, the pregame show, the postgame show, halftime, all look like, you know, really high quality broadcast shows. as you were, like, you have a blank canvas now, you have the NBA coming. Yeah. Like, how do you approach that? Do you have, like, a philosophy of, well, we have a younger audience, or, like, what is your... Yeah. Yeah. Well, one, it's fun. Like, you know, it's very daunting doing these lines. There's so much to do, and you're starting from a blank piece of paper.

23:31And that was definitely true with Thursday Night Football. But at the same time, it lets you reinvent and think about what you want to stand for in your approach. And so our production approach, which you can see from Thursday Night Football, you see it in NASCAR, and now you'll see it with NBA, was a couple things. One is you see who we put on air. So in the booth in the NFL, we have Kirk Herbstreit and a guy named Al Michaels, you might know him, and who's been fantastic. They've both been, and the idea that we get to have Al Michaels introduce America and us into their homes on Thursday night.

24:09It's just fantastic. And then you look at our pregame postgame show. And what we really wanted to do was get some fresh faces off the field who were maybe more relevant to the younger watcher. And, you know, they hadn't done a lot of TV, in many cases, no TV. So Ryan Fitzpatrick, Andrew Whitworth, Richard Sherman. I mean, the types of people that take their shirt off on live TV. Yeah, I mean, you should see the after parties. But I'm like, Ryan, keep it to the shirt. Oh, come on. Has he tried to chest bump you? All the time, all the time. We're going to have to put it in like an HR memo too. But anyways, to your point, that crew has so much fun.

24:56and before we did Thursday Night Football, you know, some other execs had told me, oh, I heard you guys are going to take the show on the road. Like, you're going to, yeah, we've all tried that. It's not worth it. You're going to, you know, it's too much cost and all of that. And I've had the opposite experience. We said, okay, we're going to try. Like, I love it because you get the sense of the crowd. You get the sense of being there. And then the other part, which I didn't appreciate was because all of that talent is traveling every week together, they've become so close and that shows up on air, right?

25:32All the great shows have that chemistry that it's hard to predict. And so maybe we got a little lucky, but also they all do like each other and traveling together and having that many hours and nights together has really come across on air. And then I'd say the last thing, you know, that Jared and I talk a lot about is we want to, and we talked to talent about this, take the work seriously, but not take ourselves too seriously. And so I think what you see is we have a love of the game and that comes across on air, a joy, and also no one takes themselves too seriously. And so we're also having fun.

26:12And to me, that's what you want. You want as a fan, you want to be educated. And at the same time, you want to be like, yeah, I want to watch a game with those guys. What's going to be new and different and unique about watching an NBA game on Amazon that I have never done before? Yeah. Well, you know, again, I think talent wise, I feel great about our lineup there. You know, in studio, we're going to have Taylor Rooks who comes over from Thursday night football. We have Blake Griffin, who I don't know if people know Blake like does standup comedy on the side. Oh, he's hilarious. He is funny. I mean, it'd be funnier if he wasn't and did standup comedy, but, um, but he actually, he really is.

26:54Uh, we have Dirk Davinsky again, faces people haven't seen on TV much. Um, Steve Nash, um, Udonis has them. So like that crew, so excited about that crew. And then, and then our, our broadcast booth, Kevin Harlan and Ian Eagle. You're not going to get better than that. Those guys are legends, as well as Stan Van Gundy and Joyne Wade. So really like the people we have. And I love, you know, we've had a couple of production seminars now and watching them all interact with each other. I feel very good about that. And then on the watching of it, what you're going to see is we really believe in AI.