The boss of sports streaming service DAZN has told the BBC that the platform will expand to introduce “things like wagering, betting, fantasy and commerce”.
James Rushton, chief executive of the company, says that it will be “a sport destination platform” in the coming 12 months. He also claims that the company’s loss-making business will soon become profitable.
Subscribers could be boosted by new services.
Analysts are speculative about how the company can recoup billions it spent on global sports rights.
According to BBC, approximately 15 million people have subscribed to this internet service. This is a move that aims to change the television sports industry.
Important: Local rights
It recently struck a major deal to show boxing in the UK and is an established presence in Japan, where it shows local J-League football and baseball, and in Germany, where its rights include Bundesliga and Champions League football.
Other countries have different rights. While a majority of rights held by “Netflix” is for less-popular sports, the premium rights for local sports are crucial to attracting viewers.
Alistair Taylor of the Sports Consultancy says that diversifying across revenue streams will make your offering stronger. According to Taylor, DAZN is increasingly seen as an alternative and creditable option by rights owners.
He adds that the new services will “really resonate with younger people, and sport’s greatest problem is cracking this younger demographic like Gen Z.”
DAZN is a private company and doesn’t release user numbers. However, it will likely have seen an increase in traffic to Italy where it made big bets as it expands its European reach.
It is the only company that has the rights to broadcast all matches of football’s big-money Serie A.
This has resulted in a tripled subscription price to EUR29.99 per month (PS25.50), to pay for a deal which is said to cost EUR840m per season.
You have too many subscriptions
DAZN is looking to acquire more premium rights all over the globe, so similar price hikes could be in the future. Rushton thinks customers will pay.
He says that the price has risen as the “quality and exclusivity of our rights portfolio increase”.
“But, again – this is very important. It goes to our beliefs as a company – the cost is still cheaper and more accessible than ever.”
In the UK, DAZN is reportedly in talks to buy BT Sport, a move that would give it access to live events including Premier League football, Premiership Rugby and Moto GP.
Rushton believes that subscription fatigue will not be an issue as viewers have to pay more to access all of the content.
A passionate sports fan will want to watch his favorite star play. He says that this is why the sport world is what we love and why we work in it.
Because the rights to broadcast sports are so costly, many companies tried unsuccessfully.
But by offering its service to customers primarily over the internet rather than via satellite or cable, Mr Rushton believes DAZN, which is owned by the UK’s richest man Sir Leonard Blavatnik, has an advantage over previous disruptors to sports broadcasting.
We are more efficient and effective than traditional TV broadcasters. He says that the internet allows us to maintain quality and broadcast over the Internet.
He says that cost effectiveness means you can spend more on content and rights, but still have a good margin.
In most countries, there are more streaming households and more paying customers for streaming services than traditional pay-TV houses. That’s why I believe that this is the change that has occurred. Tomorrow is not the end of it. It is not for tomorrow. It is now.
Streaming is a better alternative to traditional TV
Francois Goddard is a media analyst with Enders Analysis. He believes these savings are very limited. Francois Goddard, a media analyst at Enders Analysis points out that DAZN content in Spain is also accessible via traditional linear channels.
He says, “Look at satellite channel prices today. It’s not a big savings. Online video is costly because there are servers everywhere.”
Sport is particularly affected by this because they are live and everyone is watching simultaneously. This increases the need for servers to transmit the live images into homes.
Rushton said that people are used to online viewing and technological advancements have made it possible for anyone to get a high-quality HD signal even with a low internet connection.
We put a lot of effort, time and money into making our platform as stable and as reliable as linear TV.
DAZN has many rights to sports that are tied in long-term agreements. DAZN wants to grow user numbers and create audiences.
It recently paid approximately $8m per year (PS5.75m) for worldwide rights to the women’s UEFA Champions League.
DAZN, despite the expense, is offering the games for free by sharing them on YouTube for the first two-years of the five-year contract.
Rushton admits that the goal is to attract fans so they will pay. We need to provide Lucy Bronze, a star from Manchester City, more exposure than any other pay-TV channel can.
This is a rare instance of the kind of deal DAZN wants to make more frequently. Analyst Mr Goddard says that “where they are now is] that they have in fact created a network with local services across a variety of countries”, rather than an “globally integrated” service like Netflix.
He says that there are limited savings for global broadcasters of sports because the rights are geographically sold.
DAZN had to stop rights payments last year due to the coronavirus epidemic. The Access Industries of Sir Leonard Blavatnik, who had suffered a loss of $1.8 billion in 2019, also provided more than $1bn to DAZN.
Goddard states that the current situation is not sustainable and DAZN will sell or buy a competitor in the coming years.
James Rushton, however, is optimistic about the future of a sports streaming platform that’s pure and plays only. He says “a lot high-growth companies obviously lose during their early years.”
We are near the point of maturity when it comes profitability. DAZN’s success will ultimately be due to its dedication and focus on providing premium sports rights with greater value and stability.
Watch James Rushton’s complete interview with Aaron Heslehurst on BBC World News, at 07:30 GMT and 16/30 GMT Monday through Tuesday. You can also watch the full interview on Talking Business on BBC World News on Thursday at 12:30 GMT Wednesday.
Publiated Mon, 16 August 2021 at 08:39.16 +0000