DAZN to Introduce Ad Model

Interesting article for those interested in how DAZN plans to stay afloat. https://www.wsj.com/articles/streaming-sports-service-dazn-aims-to-introduce-ad-model-without-all-the-repetition-1542998439?redirect=amp#click=https://t.co/qWTfOsMy0U DAZN, the ad-free sports-streaming service led by former ESPN President John Skipper, aims to score digital rights to major U.S. sports in the coming years and to introduce ad models much sooner to help pay for it. But it doesn’t want to reproduce the ad repetition that sports fans have come to expect on TV. “They are tired of seeing the same damn ad in a three-hour game six times,” said Mr. Skipper, executive chairman at DAZN Group. “And they see it the next time they watch a game six more times, and it just drives them crazy.” DAZN (pronounced “da zone”) instead will look to integrate advertisers into programming through means such as sponsored content and product placement. “What we will not do is irritate people,” Mr. Skipper added. The company will introduce its ad model in the next six to eight months, Mr. Skipper said. Live sports continue to deliver large audiences to TV networks otherwise suffering steady ratings erosion. They also give viewers a heavy dose of what’s called “ad frequency.” CBS’s telecast of the Chicago Bears-Detroit Lions NFL game on Thanksgiving Day, for example, included 122 national commercials, including repeats by marketers such as*Apple*,*Walmart*,American Express*,*Chantix and*Garmin*,according to ad-tracking firm iSpot.tv. State Farm ran one ad twice and another spot three times. DAZN won’t go head-to-head with TV networks like ESPN for the most expensive sports rights. Instead, much like Amazon has a partnership with the NFL to live stream “Thursday Night Football” games carried by Fox Broadcasting during the 2018 and 2019 seasons, DAZN will look to pursue deals where it is the “exclusive over-the-top provider,” Mr. Skipper said. Fox*paid $3.3 billion*for its most recent five-year NFL television rights deal, while Amazon’s 2017 season deal was valued at $50 million, The Wall Street Journal reported. Beyond Amazon, other deep-pocketed tech giants including*Facebook*and YouTube have picked up small sets of sports rights in recent years. First introduced in Austria, Germany and Switzerland in 2016, DAZN is now available in seven markets. It began offering a $9.99-a-month streaming service in the U.S. in September. In the U.S., DAZN is initially looking to appeal to fans of combat sports who are used to shelling out for pay-per-view events. Sports available on the U.S. service include boxing through partnerships with Matchroom Boxing—part of an eight-year deal that DAZN valued at $1 billion—and Golden Boy Promotions. It carries mixed martial arts from Bellator MMA and Combate Americas MMA. And beginning next year, DAZN will offer a daily weekday Major League Baseball show featuring live cut-ins of key moments in games across the league. Earlier this month, DAZN began a U.S. marketing campaign across TV, online and out-of-home that aims to draw in new subscribers in the buildup to the WBA super middleweight championship fight between Canelo Alvarez, a popular Golden Boy boxer, and Rocky Fielding on Dec. 15. Dubbed “No Extra Charge,” the campaign was created by ad agency McGarryBowen and features Mr. Alvarez and boxing announcer Michael Buffer. Market-research firm Ampere Analysis estimates DAZN would need to hit around 1.5 million subscribers in the U.S. to break even on cost of its rights before the MLB deal. Around 6% of consumers in the U.S. say they enjoy boxing or martial arts, with between 30% to 50% of those consumers—around 2.7 million to 3 million people—indicating they would be willing to pay for access, according to an Ampere survey. DAZN doesn’t break out its U.S. or total subscriber numbers. “It’s certainly not a crazy number to be hitting,” despite a crowded market overall for streaming services in the U.S., said Richard Broughton, research director at Ampere Analysis. The cost to acquire consumers is high in this space.*Netflix*spends between $100 and $140 on every net new subscriber in acquisition costs, according to Mr. Broughton. DAZN is part of what used to be known as the Perform Group, a U.K. sports media business that in September rebranded as DAZN Group, putting its consumer brand front and center. In October, DAZN Group confirmed it was reviewing a potential spinoff of its business-to-business division, Perform Content, which offers services such as data and video services to betting companies and broadcasters. Billionaire Leonard Blavatnik’s holding company Access Industries is DAZN Group’s major shareholder. Mr. Skipper resigned from ESPN in December over substance-abuse issues. Mr. Skipper said in an interview with the Hollywood Reporter in March that he had since gotten therapy and spent time in a rehabilitation facility. Write to*Lara O’Reilly at*lara.o'reilly@wsj.com

Comments (3)

Should've played OTT Provider for ALL BOXING PROMOTERS instead of trying to use Eddie Hearn to get guys to sign with him so that they can fight exclusively DAZN. Roll Out/Introduction to DAZN could've...should've been done BETTER but the APP is not bad at all they have a great vision for boxing just need ALL OF BOXING on board for it to work instead of trying to depend on Eddie to deliver fighters HE CAN'T DELIVER! But if they was to be more of a OTT Provider for BIG FIGHTS and Big Sporting Events for all Sports then yeah that could work for sure! Very good post. I think DAZN realized that Eddie isn't going to get too many in the U.S. to subscribe. He simply does not have that good of a stable. Instead of depending on Eddie, DAZN went straight to Canelo themselves, and threw in some money for ODLH also.

7y ago

Bardamu

I just don't see DAZN getting large numbers of U.S. customers if all they have is half of boxing. I will subscribe to it, but how many people are going to pay for boxing, Bellator, and a baseball show? Maybe those that would buy ppv's for Canelo will instead just subscribe to DAZN for a year. That would cost less than the two ppv's per year from Canelo we expected. As a fan of boxing, I just want either A) PBC all sign with DAZN or B) Matchroom and GB sign with Showtime/Fox. I want all boxing on one app.

7y ago

sicko

DAZN won’t go head-to-head with TV networks like ESPN for the most expensive sports rights. Instead, much like Amazon has a partnership with the NFL to live stream “Thursday Night Football” games carried by Fox Broadcasting during the 2018 and 2019 seasons, DAZN will look to pursue deals where it is the “exclusive over-the-top provider,” Mr. Skipper said. Should've played OTT Provider for ALL BOXING PROMOTERS instead of trying to use Eddie Hearn to get guys to sign with him so that they can fight exclusively DAZN. Roll Out/Introduction to DAZN could've...should've been done BETTER but the APP is not bad at all they have a great vision for boxing just need ALL OF BOXING on board for it to work instead of trying to depend on Eddie to deliver fighters HE CAN'T DELIVER! But if they was to be more of a OTT Provider for BIG FIGHTS and Big Sporting Events for all Sports then yeah that could work for sure!

7y ago