Welcome to What I’m Hearing+, live from Cambridge, where I’m lecturing at MIT’s Sloan School of Management about media and data analytics.
Tonight, I have an analysis of Amazon’s recent Black Friday NFL game. Sure, it was an uneven contest between the playoff-bound Dolphins and the post-Aaron Rodgers fugue state Jets on a gross day in the New Jersey swampland. But it was also a harbinger of the future of sportscasting.

But first…

• Netflix’s Squid Game Revival: Whenever someone wants to make a point about the potential of international content development and the power of global streaming, they gesture at Squid Game. The groundbreaking South Korean series stayed atop Netflix’s Top 10 list for more than 20 weeks (total, not consecutively) and is still the most streamed series on the platform, amassing more than 2.2 billion hours of viewing. Naturally, Netflix sought ways to turn the series into a franchise, and just debuted the newest spinoff—a reality competition with the same contests featured on the show. Minus, y’know, the killing.

  So far, Squid Game: The Challenge has generated more than 85 million hours viewed, landing it atop Netflix’s most recent Top 10 list. This works out to about 20 million completed views, or 1.5 times the completed views the first half of The Crown’s sixth and final season brought in during its first weekend. Most importantly, the series propelled Squid Game’s first season back into the Top 10 for the first time since June 2022.

  This is a big positive for Netflix, but is Squid Game now a full-blown franchise? Not exactly. There’s clearly a curiosity from Netflix subscribers in the original title and a competition show, but it will take a few more years (and seasons) to determine whether that curiosity has become true adoration, celebrated with merchandise in WalMart or global immersive experiences, etcetera.

That much is clear from the initial numbers: Just under 10 million viewers tuned in, according to Sports Media Watch, which is also below the 12 million total viewers that Thursday Night Football has averaged this season. Moreover, the NFL is prevented by regulations from beginning games late enough on Fridays and Saturdays that they might interfere with college football.

The $100 million price tag may have simply come down to Amazon’s unique business model: leveraging filmic content to enhance the overall value of the Prime bundle. For the country’s biggest e-commerce retailer, Black Friday is an even bigger day than Thanksgiving. Americans reportedly spent nearly $10 billion online last Friday, and Amazon accounts for around 38 percent of all online retail sales in the U.S., followed by Walmart at just under 6.5 percent. Put another way, Amazon has more than six times the e-commerce market share of the largest brick-and-mortar retailer in the country, and more and more people are spending their Black Friday dollars on their phones rather than physically fighting over a stack of deeply discounted flatscreens.

Superficially, there are clear synergies for Amazon, which can use that captive, highly engaged, ready-to-spend NFL audience to drive sales. The more profound question is the R.O.I., and what Amazon’s experimentation portends for how other streamers can draw shoppers and advertisers away from the likes of Google and Meta. In short: Was Amazon’s Black Friday game a gimmick, or the future of live sports?

The end goal, which I’ve written about often, is to vastly improve the sophistication of audience targeting on streaming, so that products can seek out their customers. Digital adtech is hyper-targeted these days, to the point of anticipating our needs. (Try Googling something like, say, an NFL game schedule, and watch as every ad space is colonized by DraftKings.) Linear TV advertising, by comparison, is practically in the Stone Age, relying on rough demographic information on the makeup of an audience. But streamers, with their ability to synthesize consumer profiles from dozens of data points, are quickly catching up.

This industrial transformation has been driven in part by the decline of broadcast and cable viewership, which now comprises only 54 percent of the total U.S. television audience, down from 64 percent just two years ago, according to Nielsen. (Cable viewership, itself, is now below 30 percent.) In the same period, streaming jumped from 28 percent to 36.6 percent, making it the top TV viewing platform. But—and this is key—the collection of broadcast networks still reaches more homes in the U.S. than any individual streaming service.

While advertisers are flocking to streamers—Netflix’s ad-supported plan accounted for 25-30 percent of all new signups in the U.S. this year, according to research firm Antenna, while Disney+ is closer to 40 percent—we still don’t have a good sense of their true impact. Advertisers will receive some of this information through their partnerships, but there’s no greater public knowledge and, furthermore, there’s no universal metric to compare audience reach. When a program airs on broadcast, for example, it’s impossible to track the true impact of ads, but the reach is largely clear. This is less so with streaming companies that don’t break out the “ratings” for programs available and streamed within different price tiers.

But while streamers work to increase their reach through sign-ups and engagement, they are also leaning into their superior capabilities, like creating easier shopping opportunities with fewer hurdles to convert audiences into paying customers. This works extremely well for Apple Pay and apps like Instagram. The only problem is that creating large-scale audiences is nearly impossible in 2023. Theatrical attendance is down nearly 20 percent compared to 2019; average viewership for individual TV series has fallen drastically over the past 20 years; and user-generated content platforms, like YouTube, have democratized the definition of programming and celebrity. The flipside of the instant gratification era, when almost everything is at our fingertips, has been the balkanization of content and audiences.

The one exception is sports, and not just the NFL. Audiences are flocking to college football, which is largely unavailable via streaming services, leading networks to see a 15 percent increase in ratings over the 2023-24 season. NHL viewership is also up 22 percent year-over-year, according to ESPN, with a 41 percent increase in the 18-34 demo. NBA viewership is up 9 percent so far this season. Even international auto sports, like Formula 1, are drawing impressive numbers—an average of more than 1 million U.S. viewers tuned into the inaugural Las Vegas Grand Prix between 1 a.m. and 3 a.m. ET earlier this month.

No wonder the streamers want in. Investing in sports rights offers growth opportunities beyond subscriber acquisition and retention. Of course, entertainment and tech companies are always looking to further expand their presence in people’s living rooms—it’s why Google invested so much to ensure its YouTube app worked seamlessly on television sets, where close to 50 percent of all YouTube viewing is now reportedly done. Google, like Amazon (and Apple… and Disney…), understands that owning real estate on your TV screen isn’t just the key to driving subscriptions and selling advertising. It’s also a new front for e-commerce, working in tandem with mobile devices to turn our passive entertainment time into an active shopping opportunity.

It’s no surprise that streamers are embracing interactivity (and yes, their more casino-like qualities) as a way to juice e-commerce. Revenue from sports betting surpassed $7 billion in 2022, a 75 percent increase from 2021, according to the American Gambling Association. That number could multiply to $30 billion by the end of the decade. Crucially, about 40 percent of sports bettors are under the age of 35, and about 45 percent make more than $100,000 a year, according to the research firm Ipsos. ESPN has already moved to capitalize on the market via its partnership with Penn Entertainment, which will operate its sportsbook. But the real opportunity is the feedback loop of higher engagement: Sports have always been best consumed live, but with money on the line, the games literally become must-watch TV. (The pregame analysis and odds-making, too.)

These concepts also extend beyond sports betting. Just as Amazon is experimenting with live flash sales during NFL broadcasts, ESPN+ could easily copy Peacock and sell team merchandise using QR codes or directly through the app. Or Disney might try selling merch or theme park tickets on Disney+. The point is to plan for what viewers may instinctively want to buy, and make that opportunity fun and convenient without feeling tacky. How many times have you or a friend bought something via Instagram simply because Apple Pay made it so easy?

That’s the future that Amazon and Peacock are testing, anyway, and that others will surely experiment with soon. After all, if they’re not reaching the audience scale of linear, streamers have to find more innovative ways to capture attention and convert it without losing viewers to another device or platform. Live sports plus direct-portal shopping is one answer to that conundrum. That way, if a game turns out to be a bust, at least there’s some retail therapy at your fingertips.