Amazon.com Inc. (AMZN) is taking on traditional cable companies in efforts to grab dollars from another segment of U.S. consumers. This time, Amazon will appeal to Ultimate Fighting Championship (UFC) fans as it offers the ability to watch fights on its Amazon Prime Video platform, as reported by Recode on Thursday. (See also: Why Amazon Is Spending $1B on a Doorbell Company.)
The move marks a Amazon's larger initiative to take business from major cable and satellite providers, such as Comcast Corp. (CMSCA) and Dish Network Corp. (DISH), as well as cable channels, such as 21st Century Fox Inc.'s (FOX) Fox Sports 1.
Tech Titan Pushes into Live Sports
Fights can be preordered or purchased up to four hours after they begin, granting viewers the ability to rewind and replay within a 24-hour window. The PPV package is not exclusive to Prime members, but will cost non-Prime account holders $64.99.
While Amazon is just one out of many places to watch UFC fights, the deal marks the company's first move into PPV for live sports and should signal more to come as the online retailer doubles down on its entertainment business. Further, while the fights are available for purchase and streaming on the UFC's website, the new viewing option will be particularly attractive for consumer who already have Prime accounts, barring them from needing to sign up for a new service or download a new streaming app. Convenience on Amazon Prime should lead to more viewers and more purchases.
Amazon as Cable Company
Last year, the Seattle-based company inked a $50 million deal with the NFL to stream "Thursday Night Football" and is currently bidding to win a multiyear contract to stream it again.
The move into PPV makes sense for Amazon, as it already has shaped up to look more and more like a traditional cable company. As Amazon heads off against on-demand streaming platforms such as Netflix Inc. (NFLX), Apple Inc. (AAPL) and Hulu, it has built out its platform of movies and TV shows, which consumers pay a monthly fee for.
While terms of the deal with the UFC have not been disclosed, it's likely that Amazon will get a similar portion of the proceeds that cable providers normally get in these kind of deals, potentially as much as 30% to 40% for high-profile events, as reported by Recode. (See also: Amazon Market Cap May Cross $1 Trillion in a Year.)