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Amazon finally dips its toes into Yankee broadcasts — what’s next?

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A total of 21 games will be streamed regionally by the YES Network part-owner.

Key Speakers At The WSJDLive Global Technology Conference

Since Amazon bought into the YES Network more than a year ago, we’ve speculated about what kind of changes would come to the baseball experience once the country’s most powerful corporation became involved in broadcasting. This week, we got the first real answer, as Amazon will stream 21 Yankee games on the Prime Video platform for regional users this season.

Basically, it works like this: The games are simulcast, so you’ll have the regular YES booth, and if you’re in the archaic “Yankee broadcast region” of New York state, Connecticut, northeast Pennsylvania, and north and central New Jersey, you can access the games for free if you have a Prime membership. The announcement comes on the heels of last week’s report that Amazon had paid more than a billion dollars for the rights to take Thursday Night Football to Prime in 2023.

This all represents Amazon’s baby steps into the last, lucrative pivot to streaming. Premium episodic TV is pretty much gone, with the possible exception of Disney+ staggering The Mandalorian, WandaVision, and The Falcon and the Winter Soldier rather than dumping entire seasons at once. Blockbuster movies are being released to stream and in theatres simultaneously (this may be partially due to the pandemic, but it’s unlikely to go away entirely). Even professional wrestling has emphasized the stream model over the classic television distribution. The lone holdout has been live sports, where the unpredictability and set start times to accommodate in-person crowds remain significant assets for legacy television.

Indeed, despite the flurry of streaming platforms available — every second ad on a podcast seems to be for Paramount+ these days — the only ones with the scope and budgets to take the Big Four North American sports digital are Prime, Disney+, and Netflix. These three platforms dominate the streaming space, and crucially, have the immense cash reserves needed to introduce new programming.

New content is a geometric function, with a huge amount of cash needed initially to hire directors and producers, buy out media rights, and film and edit content, but it scales incredibly well. The cost of adding one additional customer to a platform of 10,000 is low, and the cost to a platform already serving 80 percent of American households is effectively zero. Amazon’s cash reserves and penetration make it the most likely entity to revolutionize sports broadcasting in the next 24-36 months.

The big question mark is Disney+, and what they will choose to do regarding ESPN and their online counterpart, ESPN+. A fully consolidated Walt Disney Company platform, with Disney+, Hulu, and ESPN all accessible on one app, is probably enough to convince sports consumers to move to streaming. A typical family will use the Disney content to access Star Wars and Marvel, while experiencing zero switching costs when the ballgame is on. The more cluttered the Disney offering is to consumers, the weaker the overall offer.

The last factor of consideration is baseball’s regionalism. National baseball broadcasts don’t do well relative to other sports — if you’re not a fan of the Yankees and Red Sox, you might watch the first Sunday Night Baseball broadcast of them a year, but you’re significantly less likely to tune into the second, third, and fourth showing of the season. This is in stark contrast to national NFL or NBA broadcasts.

Regionally, however, baseball is quite popular on television, and that’s reflected in smaller market teams like the Royals earning almost $800 million in TV deals. This is where Amazon’s market penetration really allows them to scale, as the personalization of the e-commerce and existing video streaming allows dynamic experiences for viewers across the country on one platform.

Baseball’s regionalism is also, perhaps, the biggest obstacle to streaming overall. As said above, you can only watch the Yankees on Amazon in 2021 if you’re in the “regional market,” an outdated, early-90s way of thinking about fandom. I’ve lived in three different cities since I started writing for PSA, none of which fell in the Yankee “regional market”. It’s funny that the Yankees of all teams continue to be constrained by an archaic loyalty to geography, as one of the central selling points of Yankee Excellence is the fact it’s a worldwide brand. The Yankees undoubtedly leverage the drawing power of the club on the road in their valuation of the organization, only to fall back on an understanding of fandom that harkens back to the Don Mattingly days.

Amazon probably has more capacity to expand outside of the regional market than any other platform, for the reasons discussed above. They have the cash and existing infrastructure to reach virtually every Yankee fan in Canada and the US. They also own a part of the regional sports network that they might otherwise compete with, which gives them a leg up over other platforms.

However, this becomes more difficult in regions that Amazon doesn’t own an interest in the regional sports network. Certainly, Amazon streaming in Canada is difficult if not impossible to see in the near-future, given the oft-predatory practices of Rogers Sportsnet, who are seemingly determined to never allow Canadians to watch sports without their permission. That hurdle is left to clear, and ironically, despite the advantages that Amazon boasts in tackling this issue of regionalism, entrenched legacy media may be able to hold off in specific instances.

For most Yankee fans, their consumption of the club won’t change much in 2021. I would be curious to revisit this article in October or November and see how regional fans felt about Amazon streams. Make no mistake about it though, this is not Peak Amazon. No company is better prepared or positioned to overturn the sports broadcast landscape, and the Yankees are likely just the litmus test.