Cannes Lions Day 5 Tackles Why Sports Rights in Streaming

CANNES — It was described as a port, but resembled a Saudi palace. And once you walked inside, it was like an adventure from “Alice in Wonderland.”

Welcome to the sprawling Amazon pavilion at The 2024 Cannes Lions, as the five-day advertising and creativity festival wraps Friday night.

Gifted seashell bracelets to promote the Prime Video show “The Summer I Turned Pretty.” Quiz-style entertainment on stage from hostesses in vintage frocks. An “Amazon Live” broadcast with young presenters filming center stage. Tablets to order products. Cafes. Cakes. And, at one point, Gwyneth Paltrow for a panel. Amazon had it all.  

Not only did they steal the show when it came to statement-making digs, but the company let the ad world know at its biggest annual festival that it is a serious partner. Prime Video notably added commercials earlier this year and attended the upfronts for the first time in May. 

Industry estimates are that if it sold all advertising spots across its platforms, Amazon could take in $6 billion annually, roughly a third of the tally taken by traditional networks at the upfronts each year. 

“It’s exciting. They invented retail media and kicked it up a notch, true media style with ads as the base tier for Prime Video,” former Amazon Prime Channels chief Soumya Sriraman told TheWrap, fresh from speaking on multiple festival panels. 

As streamers are taking a bigger slice of the advertising pie, they are also showing up in force to meet advertisers in France. (Netflix added advertising to its streaming service in 2022, for example.)

“It is only in the last few years that we’ve seen the streamers coming here,” Simon Cook, Lions managing director, told TheWrap. “Mostly, the presence is activation-based, but we’re also seeing them submit work for awards for the first time. Netflix has entered quite a few projects and a few others as well, so we might even see them going up on the stage, which would be an interesting shift.”

For Cannes Lions, Netflix constructed a rooftop sports bar at the JW Marriott, alongside mini sets from a number of its current shows to welcome clients. The sports bar speaks to another trend here, as sports has become a major topic because it’s the most prized form of programming amongst advertisers. 

Streamers like Netflix, Apple and Amazon bought up an increasing number of sports rights in recent months. The programming is sought after because it captures the largest number of live eyeballs and engaged viewers, which are considered more valuable to brands. Plus, breaks in play, particularly in Americna football, allows for more commercial breaks for advertisers.

Sports stars even showed up in droves to help the businesses grow, while FIFA had its own beach.  

“Amazon’s Alan Moss touting TNF and FIFA with its own stand are signs of what’s to come,” Sriraman noted. “The direction of where growth in advertising innovation and spend will be is clear CTV growth; and within CTV, linear; and within linear, sports.”

The Stagwell Sports Beach attracted giant crowds and hosted major stars. Online news company Axios and marketing firm Deep Blue Sports + Entertainment hosted a “Women’s Sports House” at a luxurious villa. Guest speakers at the Empower Lounge included England women’s team goalie Mary Earps.

Like many sports stars, Earps is a brand in her own right making the trek down to connect with advertisers and partners, considering women’s sports is a fast-growing business. The sky is currently the limit when it comes to the money involved, hence the buzz. CJ Branagh, partner at PwC, told TheWrap.

“It’s a chicken-and-egg situation. Why are so many people willing to pay so much for sports? Because they know that fans are highly engaged audiences and that they will connect with sports live or real-time, which is highly valuable to advertisers,” she explained. “That means that advertisers and brand agencies have to pay more for sports. It just keeps growing and growing because now the streamers also need something compelling to retain an audience, to be able to grow their subscriber base and their ad revenue base. There aren’t a tremendous amount of sports and some are more valuable than others, as denoted by the ad dollars and the consumer audience size. So, it’s wild.”

Branagh added that “there has to be a point where there’s a ceiling, hypothetically” to the growth. “But a ceiling has not yet been reached because of the dynamics and the way that they play off each other to expand.”

One executive in attendance at Cannes broke down the streaming sports wars as such: “Amazon is keen on sports. It is well known it wants to have more going forward. Netflix at the upfronts announced they would exclusively show NFL football on Christmas Day. It is a new thing. Apple has MLS soccer globally. Speculation is that they would like to have more sports, too. The presence of these companies that are relatively new to the marketplace are massive in size and potential.”

Soon to come, there is speculation that rights will continue to increase with the NBA, which is the next big league to go through a rights deal in the U.S. But besides sports, the streamers are still streamlining their overall activities. This was another frequent topic at The Lions.

“12.3% of pay TV subscribers disappeared in the first quarter. This is the highest quarterly drop in their tracking and this even includes 150,000 estimated canceled subscribers on YouTube TV. Streaming TV continues to be a magnet for consumers’ viewing time and budgets. There will be an equilibrium for linear and streaming TV, but we aren’t there yet,” Sriraman added. “Dynamic, live, biddable advertising isn’t here at scale and needs to be for the TV advertising industry to thrive.”

Consultant Nathalie Lethbridge of Atonik Digital agreed: “The challenge for streamers is building and converting premium value and CPM’s in a programmatic streaming ad ecosystem to match the ad rates currently commanded by the networks. Without a doubt, audience reach and data return path is now firmly with the streamers, and audiences for networks and cable are dropping fast in the U.S.”

There were also some streamer power meetings held behind closed doors. 

“We brought together all of the traditional media companies, as well as Netflix and Amazon,” one executive with knowledge of the situation told TheWrap. “Plus some of the agency leaders and some of the technology players too. The big finding was that in the first quarter, if you looked at new streaming setups, the majority of them are ad supported.”

Despite all the business talk, the heart of the festival remains creativity. 

“Creativity sits at the core of this event and we should never forget that,” Cook noted. “But what’s happened over the years is that more advertising money has been brought to the festival. We know a lot of CMOs and marketers are now coming to Cannes because they recognize the value of creativity. But then, more recently, we’ve seen more business players coming to the festival than ever before. So this year, we have lots of creatives coming, for example, but also entertainment people and media.”

He concluded: “I think it’s created a lot of opportunities. People are coming to see the best work in the world — that sits at the heart of the festival — but also to network and to do business.”