Amazon's NFL Streams May Eventually Swamp Traditional Advertising

Did you catch that NFL game last week between the Bears and Packers? The Pack won, 35-14, and Aaron Rodgers looked great. Personally, I'm more of a college football guy myself, but I did "tune in" for a while, watching it on Amazon Prime, on my iPad, over the Internet.It was Amazon's first Netcast (webcast? streamcast? digitalmediacast?), the first of 11 Thursday night matchups the company will provide to Prime subscribers for free this year.The Netcast looked like...a football game. Like what I might otherwise see on a big-screen TV (I actually had one of ESPN's college games playing on a TV at the same time). There wasn't much difference between the two experiences for me as a viewer.Yes, Amazon's stream had some initial glitches, but it caught a bit of a break when bad weather delayed the game and allowed it to iron out problems. Once the game started, the Netcast attracted 2.1 million unique viewers for at least 3 seconds, and the average viewer stuck around 2.5 times longer than they did for last year's Twitter game streams.It was only.a tiny fraction (2.5 percent) of the audience tuning in to the game on traditional TV. That ain't much, especially given that Amazon put up $50 million to stream what has been the NFL's crappiest night of matchups.But it's important to note this is just the first step in what could be a huge shift in advertising around sports. That shift represents a much bigger problem not just for traditional networks, but also for the companies that advertise on those networks, and the companies that help those companies advertise on networks.At a Los Angeles conference earlier this week, BTIG analyst Rich Greenfield suggested that the quickest way for Netflix and Amazon to disrupt the pay-TV business would be to secure more sports rights. He's right. Along with awards shows such as the Oscars, live sports (and their unscripted cousin, reality-TV competitions such as "The Voice") remain one of the few reasons to tune in to a specific channel at a specific time.Now Twitter, Amazon and Facebook are all providing some package of live and highlight content from various sports leagues including the NFL, Major League Baseball, the NBA, pro Lacrosse and others.Amazon's live game stream ran commercials that largely looked like the typical ones  on traditional networks each week. But what happens as this evolves?After all, Amazon doesn't really need advertisers on its Netcasts. It's using the games as yet another value add to persuade people to pay $99 a year to lock into Prime, where it knows you'll end up buying lots of things for the rest of the year.While it's conceivable people viewing NFL game ads on Amazon might then click through to buy those products on the site, a simplified process to perform that function isn't yet enabled. And in fact, Amazon doesn't or legally can't (yet) sell many  products typically advertised on NFL games, including beer, pickup trucks and prescription erectile-dysfunction pills.So what happens when Amazon begins substituting its own ads for those not-for-sale products? And what happens when those substitute ads get an interactive component, so you can one-click and buy? Boom!Admittedly, I'm a little tired of Gold Box deals of the day for flashlights, screw extractors, bed sheets and cast-iron skillets. I have my full quota of all of those products, but still they end up in the feed.But a live game 'cast with customized, auto-generated video ads for products it does sell, that I may actually want, tied to time-dependent deep discounts and free shipping? I'm thinking that'll be a lot better than another Bud Light or Ford F-150 commercial.Those ads, informed by Amazon's deep knowledge of my personally buying history and inclinations, and powered by AWS, almost certainly will become reality.And that's a big problem just ahead for the ad industry and conceivably for many of  those traditional brand advertisers.  As well, the networks and pay-TV operators will have yet another issue compounding their cord-cutting problem if they continue to lose TV rights to well-financed tech companies. They depend on those advertisers. Amazon doesn't.The only question, to my mind, is what they all will do to adjust to a different world? Because I would bet a lot on Jeff Bezos' shiny pate that it's already in the works.