The Cover Story DAZN

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The Cover Story DAZN The Cover Story DAZN - All right, let's get started. I wanna welcome our first guest, Kevin Mayer, Chairman of DAZN. Kevin, thank you so much for joining us. All right, let's get started. Please join me in welcoming our first guest of the day, Kevin Meyer, Chairman of the DAZN. Kevin, thank you so much for joining us. It's great to have you back. - It's great to be back, and I'm very impressed with your pronunciation of DAZN. Well done, Emily. - I worked on it. - Very well done, indeed. - So let's talk about that. Most people probably know you as the guy who made Disney Plus a monster success, the former CEO of TikTok, but here you are working at this sports streaming giant, DAZN. Talk to us about what it is, what's on it and how big it actually is. - Yeah, well DAZN is a global sports streaming service. It is the center of gravity. It's biggest markets are in Europe and Asia. We have the big soccer rights that matter in Italy. They're called Serie A. We're just taking over the Premier rights in Italy in the next season that starts in August. We tripled our inventory of Bundesliga rights, which are the big rights in Germany. We have great boxing rights around the world. We had the big Canelo fight that was in Dallas just last weekend that performed really well. And we have the baseball rights. Baseball's the biggest sport in Japan, actually. We have the baseball rights that matter in Japan. So we have a big global service. In the US, it's not quite as well known as maybe ESPN is, but we're growing. We're growing rapidly. It's a lot of fun. You know, I also launched ESPN Plus in the US, and so I have a bit of a history with this online sports streaming business. There's a lot of transition happening. We're at a tipping point. And I think that you'll see going forward, more live sports will be consumed over-the-top, outside of pay TV services, than within paid TV services in the not-too-distant future. - Now, because you've worked with so many different kinds of content, talk to us about how sports content is different from all the rest. - Well, I think that there's just a large appetite in the population and audiences around the world for high quality entertainment product, and sports is one of the genres that's a high quality entertaining video product. So it is not that different than the others. Now, a few technical differences, sports are consumed live. And so what you have is one of the most difficult use cases on video delivered over the internet, where you have to encode this event live. If you're looking at on-demand content, let's say on Netflix or Disney Plus or elsewhere, there's a lot of time to compress that signal over and over and over. You can compress those files, so that you can use a lower bit rates to deliver a certain quality of programming. But sports and news is delivered live. So you have one encryption, happens in real time. It's much harder to deliver. Also there's bottlenecks that evolve on the internet, because everyone's watching the same thing at the same time, and that exposes all the most difficult sort of pain points on the internet. So you have to really manage load balancing and some other stuff when you deliver live streaming on the internet. So the live streaming is the most difficult use case, and it is therefore different than entertainment. But I think just from a sort of a commercial perspective, if you deliver in demand programming that people love, whether it be traditional entertainment, scripted or unscripted or sports, there's a big business to be had. And I think there's a long history of the people that connect audiences with high quality entertainment, sports and otherwise, being very profitable. - Now, given the huge shakeup that's happening right now in distribution, in platforms, it's also impacting the competition for sports rights. Disney just announced a new deal with the MLB for fewer games, but the ability to simulcast on ESPN and ESPN Plus. How do you expect the competition for sports rights to evolve? - Well, sports rights are scarce and they are unique. And so there's always a competition for sports rights. And that's fine. That's great. I mean, ESPN flourished over the years because they have a flywheel effect. They had a great cable distribution model, and when they bought more expensive rights that were more valuable they could ask the cable operators to pay them a little bit more in affiliate fees, and that affiliate fee increase allowed them to go buy the next set of great rights. And you can see the resonance between those two things, charging more, buying more, charging more, buying more. And they had this great flywheel, that was the effect of that. And I think that's true in over-the-top delivery too. We at DAZN intend to buy great rights. We then intend to market very heavily, get an extremely robust subscriber base, and then be in a position to pay the most for those rights reasonably and profitably next time around. So yes, there's a competition, but there is a reasonableness test that you have to believe in that people... It's hard to break into that positive feedback loop that I just described. And so getting into that flywheel and then maintaining it is key. - So it seems like the one, you know, the most important thing about sports, that you can watch it live. That's never gonna change. So what do you see as the next level of innovation and engagement when it comes to sports streaming? - Well, there's a lot of great revenue streams that can accrue. There's the basic subscriptions or pay-per- view events, where people pay for the live sporting events themselves. But we've seen sports betting become a very, very substantial business. It's happening in the US, as, you know, more and more states legalize it. In Europe, it's been legal for quite some time. And in Asia, it's also a legal, generally speaking. So I think if you can combine the sports viewing experience with betting... And betting doesn't just have to be who wins and loses the game. There's all sorts of betting moments that happen throughout the course of a game, who's gonna score the next goal? You know, all sorts of different parameters that you can think of that people can bet on live. So having sports betting attached to the live streaming rights on platforms, which are inherently interactive. DAZN has delivered over-the-top on interactive platforms. So you can place bets. You can talk to your friends You can have an ongoing dialogue. "Hey, I'm doing better than you are. And, you know, you can kind of escalate this whole betting process or fantasy sports process around the live streaming. So I think that's an area that not only DAZN, but others are getting into, that will enhance the economics of sports, generally speaking. You can sell merchandise. There really is no shortage of ancillary revenue streams that can go along with the actual, just sports streaming sale, that I think will grow the marketplace pretty dramatically in the coming years. - Now at the same time, you know, obviously live sports are the key, but there's so many different ways to watch content in general. And I suppose sports is a little bit unique in that respect, but do you expect there to be consolidation in the streaming market? I mean, can we go on with this many options? It's wonderful to have choice, but it can also be confusing for consumers. - Well, I think there's a lot of options that would be viable. If you're talking about who's gonna dominate, you know, have a dominant position in a global deployment of their service, like a Netflix or now a Disney Plus, you know, maybe an HBO Max, certainly Amazon Prime and Apple TV Plus, I think there's only a handful of truly global, you know, greater than 100 million subscriber base type of services that can exist, but that doesn't have to define success. Success, you know, both financial and for consumers can happen in a much more niche basis. If you can create a service that has 30, 40, 50 million global subscribers, that can be highly profitable and a great business. And I think there's a multiplicity of those that will exist over time. Some will serve certain audience segments, some will serve certain types of genres of programming, sports or unscripted, or, you know, dramas that are focused on, you know, female audiences, those that are focused on male audiences. I think you'll see a lot of niches survive and thrive, actually. They just won't be 300 million subscribers like Netflix is. - So all the services you just mentioned, you know, do all of those count in what you see as the future of big global services? Or will some of those services not hit that milestone? - Hard to say. Frankly, I think that's going to be..
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