Sports Streamer DAZN to Switch on in 200 Countries

Publication date: 10 Mar 2020 Author: Tim Westcott Director, Research and Analysis, Programming

Sports streamer DAZN to switch on in 200 countries

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DAZN, the online video sports provider, is going global, expanding to more than 200 countries and territories from May 2020. DAZN will be offered around the world as an English-language subscription video service focused on boxing as a first phase of its global expansion. DAZN holds international rights to many of the world’s top fight promoters including Golden Boy Promotions, Matchroom Boxing USA and GGG Promotions. To date, DAZN has been available in nine countries – Austria, Brazil, Canada, Germany, Italy, Japan, Spain, Switzerland and the United States, offering a range of sports content dependent on rights available in each territory. According to Omdia research, DAZN reached 6.5 million paying subscription at the end of 2019, 137% growth from 2.7 million in 2018. Our analysis

DAZN's global switch-on is a bold move which evokes Netflix's worldwide launch in January 2016. As with Netflix, it is a strategy enabled by a robust technology platform and a portfolio of available content. Fight sports and boxing have global appeal and are the kind of events for which fans expect to pay a premium. Being available globally does not mean DAZN will have to have the same portfolio of events, and as with Netlfix, the amount of local content will vary depending on the customer base it is able to attract in each country and the contracts that become available. DAZN owns its technology platform set up a development centre in Amsterdam in 2018, planning to hire 300 staff by 2023 in R&D, customer acquisitions and retention, and third party integration teams. DAZN is already operating across four continents and its legacy as Perform saw it operating other types of streaming services, including the ad-funded website goal.com, low bandwidth streams for betting shops and white label on demand services. So it already has know-how and contacts across the world. So far, DAZN has generally launched where it has been able to secure attractive local sports properties. In Japan, it signed a 10-year deal with the J-League, snatching the rights from Sky PerfectTV. In Italy, DAZN acquired a package of Serie A rights when Mediaset decided to withdraw from pay TV sport. In Spain, DAZN was able to wrest rights to Moto GP and Euroleague basketball from Telefonica as the telco hesitated over renewing its contract. DAZN is looking to add more rights not just in boxing and it is well positioned to do so granted its extensive experience in dealing with major sports rights holders. However, for now, going with a limited selection of sports puts DAZN in the specialised video provider category for international viewers. WWE Network, a streaming service specialising in wrestling, managed to attract 1.4 million paying subscriptions at the end of 2019, down 9% from a peak at the end of 2019. Over 70% of those subscriptions are in the US, with the rest of the world accounting for less than 400,000 subscriptions. DAZN has rights to football leagues in several markets but the cost of acquiring worldwide rights to the top- tier leagues will be prohibitively expensive. But expecting DAZN to bid for rights to the NFL in the US or the Premier League in the UK, for example, is probably missing the point and likely something DAZN has no

intention of doing (unless an unexpected opportunity arises). Instead DAZN could cut the rights trading middlemen out of the process by acquiring all rights outside the home territory (the French league, for example, has sold all its rights outside France to BeIn Media, and Italy’s Serie A to Endeavor), or offer a global platform for rights holders to second tier leagues or niche sports. Another possibility would be non- exclusive deals or split deals where other rights holders cherry-pick a selection of content allowing DAZN to offer full coverage. When Netflix launched internationally at the beginning of 2016, its content library was limited, and for the first year the majority of the growth came from more developed markets in Western Europe. But as it continued to expand its library, rolling out localisation of titles and UI, the growth shifted to other regions. Partnerships with local pay TV operators and telcos have been the other important factors in Netflix’s international growth. DAZN has also increasingly relied on partnership deals with local pay TV and telco operators to boost its distribution: . In Japan, an agreement with the leading mobile operator, DoCoMo, kicked off at the start of the 2017 J-League season. DAZN is now bundled in with various different packages for DoCoMo, which has not only had a beneficial effect on subscriber numbers, but an additional upside in terms of marketing and branding. . DAZN’s agreement with US cable operator Comcast, announced in September, will make the service available to Comcast customers equipped with an Xfinity X1 set-top box or its Xfinity Flex streaming device. The DAZN app will be pre-installed on new set-tops. . In Italy, DAZN negotiated a deal with Sky which started following its launch in August 2018 under which a DAZN subscription was bundled in with Sky’s online service. This season the agreement has developed further with the launch of a linear channel on the Sky satellite platform in Italy which will include 12 hours of DAZN programming. Sky customers of more than three years standing will get a DAZN subscription for no extra cost.

DAZN also has deals with Hikari TV and JCom in Japan, Swisscom TV in Switzerland, and Sky in Germany. No doubt DAZN will continue to pursue this avenue of distribution, one that is particularly important in less developed markets with a low propensity to pay for legal content. The international price has not been announced yet, and it will remain a crucial factor in uptake decisions, together with the interest in the slate of content offered in each market. The main imponderable about DAZN's bold move is the heavy investment it is making in acquiring rights, which is certain to have to increase. Will its backers continue to fund its operations to break even, and are they in it for the long term, or are they looking for an opportunity to sell? And, in the short term, how will the Covid-19 virus impact its business, with sports events (including Serie A) being called off, starving services like DAZN of fresh content? We will continue to monitor developments closely over the coming weeks. Citation policy Request external citation and usage of Omdia research and data via [email protected]. Omdia consulting

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