As part of an earnings call with investors Thursday, Amazon announced an increase in the yearly and monthly rates for a Prime membership, citing its exclusive NFL Thursday Night Football deal as a major factor in that price hike.
In addition, Amazon revealed the advertising revenue that it generated in 2021, information that the company had not disclosed before. And as you might expect, the amount was significant.
According to its fourth-quarter earnings report, Amazon generated $31.2 billion in revenue and sales during the quarter increased by 32 percent. As some observers pointed out, that’s as much revenue as the entire global newspaper industry generates. Axios’ Sara Fischer points out that the figure is more than Microsoft, Snapchat, and Twitter created in ad revenue combined.
Amazon Web Services, which football fans see plenty of advertising for during NFL telecasts, earned $18.5 billion in operating income.
So when Amazon says it’s raising prices for Prime memberships and points to spending $1 billion per season for the next 11 years on Thursday Night Football as one reason for the price increase, how much credence should customers put into that?
During the fourth quarter, Amazon’s ad revenues totaled $9.7 billion.
Sure, there are operating costs such as the rising wages and transportation costs Amazon also cited in its earnings report. Bankrolling original content like Coming 2 America, Tom Clancy’s Jack Ryan, and the upcoming Lord of the Rings series also plays a major role. What about music? Gaming? Services like Amazon Pharmacy? Prime free shipping?
It’s easy to blame a flashy deal like the Thursday Night Football agreement for Prime memberships becoming more expensive. That certainly makes for catchy headlines. But NFL football also gives Amazon the opportunity for even more advertising revenue with ads during game telecasts, along with the banners on webpages and search results that already bring in tens of billions of dollars.
Such a narrative should be downed before it has a chance to advance.
Ian Casselberry is a sports media columnist for BSM. He has previously written and edited for Awful Announcing, The Comeback, Sports Illustrated, Yahoo Sports, MLive, Bleacher Report, and SB Nation. You can find him on Twitter @iancass or reach him by email at iancass@gmail.com.
