Sky and DAZN pursuing digital tie-ups where there's a business case
By Simon Ward
Partnerships with technology and social media giants are now a crucial means of distributing content and attracting new audiences, but have to be approached in a strategic way that delivers value, according to Sky and DAZN, two leading, if differing, international subscription sports platforms.
While the likes of Amazon, Facebook and Twitter have themselves entered the sports rights market in recent years, broadcasters have sought to work with them to connect with younger fans less inclined than their elders to commit to traditional pay-television subscriptions.
This can take the form of news updates, clips or even live content, in part to encourage the consumer to sign up for a digital product.
Speaking at the Leaders Meet: Innovation conference in London on Thursday, David Gibbs (pictured, right), director of digital media at Sky Sports, the UK’s leading sports broadcaster, claimed it engages with social media to maximise the reach of its coveted rights deals with the likes of the Premier League, Formula 1 and the England and Wales Cricket Board, but also newer acquisitions.
He said: “We invest in those [established] partnerships and we see them as long term, and we’ve worked with those partners to try to innovate and drive the reach and give value back to our customers.
“We turned the NBA rights on this season and one of our objectives is how do we bring the NBA to new and different audiences. So we’ve been working with Facebook, YouTube and Twitter, and streaming some of those games live on Saturday evenings, and that’s been working particularly well for us. Other sports that we’ve worked hard with [in that area] are UK netball, pushing its profile to our audiences.”
Parent company Sky, which is now owned by US media giant Comcast, does co-operate with leading digital players such as DAZN, notably in Italy where Serie A coverage is now shared with the OTT subscription service, and in Germany where Champions League rights are divided between the two platforms.
Gibbs said: “We work with DAZN in Italy and Germany, and Netflix is now integrated into the [premium] Sky Q box. There’s an acknowledgement that we’re not the exclusive provider, with all the rights, so we’ll work with partners in specific markets where it drives value for our business.”
Although Sky launched its online TV service, now known as Sky Go, back in 2006, and rolled out its sports channels on Now TV, an OTT service that enables viewers to watch premium content without a pay-TV contract, in 2013, Gibbs stressed that, as far as Sky Sports is concerned, “a majority of the consumption is on the main TV screen,” and that there needs to be a strategic approach to digital partnerships to ensure a return on the often large initial investment in rights.
Gibbs said: “The customer is clearly deciding to consume lots and lots of sports content in lots and lots of different ways on lots and lots of different platforms. We have to accept that. There is no one single destination for all of this. The challenge for us is how do we make sure that all these different touchpoints that exist, be it Facebook, Instagram, Snapchat, YouTube, Twitter, Roku, [deliver] for our business.
“We can’t just chuck all of the content out there and see what happens. We have to have a clear audience development strategy. Are we looking for conversion? Are we looking for tune-in? Are we looking to try and engage with a new audience? Is it about widening reach? Is it about ad revenue? And that’s quite tricky because the value changes all the time and the algorithm changes all the time. It’s part of how you manage this new sports ecosystem.”
Finally, he acknowledged that digital players need to continue to work together to tackle piracy as “none of us are benefiting from that” and addressing the issue “is a big, big job on an industrial scale and doesn’t stop.”
'If content is king, distribution is queen' Whereas Sky has a 30-year heritage and has been able to rely on traditional linear television to build up a subscriber base of more than 23 million across Europe, DAZN, as a digital-focused business that only launched, via digital sports content and media group Perform, in 2016, has had to seek partnerships with other technology platforms to drive uptake.
It is now available in seven markets (Japan, Germany, Austria, Switzerland, Canada, USA and Italy) and is expanding to two more (Spain and Brazil) in 2019, with a target of 20 in 2020.
Ben Lavender (centre), chief product officer at DAZN, said: “For DAZN partnerships have been critical for us pretty much since day one. When we launched in Japan we did a major partnership with Docomo, which was the incumbent telco in the region. You can walk into any one of 30,000 Docomo stores and sign up for DAZN.”
He added: “In terms of the relationship we’ve got with Apple, we’re app of the day on Apple stores every few weeks and in 2017 they named us one of the apps of the year. We’re also working very closely with Google, through Google Play. It’s incredibly important to have these relationships because a lot of our subscribers come through Apple and Google, and also Amazon.”
The importance placed on these platforms would appear to be reinforced by the recent appointment of Ben King from Apple as DAZN’s senior vice-president global distribution and business development.
DAZN has built its business on the back of premium sports rights, notably a 10-year deal with soccer’s J-League in Japan plus top European soccer leagues and competitions, North America’s major leagues and boxing across various markets, but the development of an effective distribution network has been just as crucial.
Lavender said: “For DAZN if content is king, distribution is queen. DAZN is incredibly data-driven in that we analyse every aspect of the customer’s journey from offsite to onsite, where subscribers go and what non-subscribers watch, and even before we go into a market look at the available content and broadband [accessibility].
"We aim to have a really wide variety of sport, and certainly in Japan we are sport. Other than sumo we have everything, and in Germany we have a very comprehensive service with football, handball and other sport."
He added: “In order to get fans access to that, and Netflix has set the bar in that people expect to consume content online, we’re very much focused on [partnerships]... We’ve got great rights, we’ve got to make sure it [the content] is easy to consume.
"Soon after we launched in Italy , we launched on Sky Q which is now our number one device in Italy, and we’re also on Sky Q in Germany. Every consumer device you can think of within the home we’re on it, and if we’re not, chances are we’re working on it.”
In terms of delivery, DAZN’s priority is ensuring a smooth product, with no buffering and limited latency (ideally less than 30 seconds behind the action), which has entailed a significant investment in technology.
Lavender said: “We’ve had some challenges along the way. We’re a pure over-the-top streaming service so in the likes of Germany, Austria. Switzerland, US and Japan it’s big fat pipes, whereas in Italy broadband is less mature. In order to give fans [there] access to the sport that they needed, we’ve had to spend a lot more time on the technical infrastructure to improve the video quality.”
However, he added that DAZN is always looking at enhancements, and, after showing last month’s J-League final in ultra high definition, or 4K, is promising similar offerings this year, while also exploring augmented reality and virtual reality.
DAZN does not yet have a dedicated OTT service in the UK where there are two strong pay-TV sports broadcasters in Sky and BT Sport, and where Premier Sports is increasingly buying up rights and OTT rival Eleven Sports has struggled to establish itself.
However, DAZN is headquartered in London, and announced today that it is opening a new media centre in Leeds in the north of England, where it already has a presence, on 28 January.
The premises at the White Rose Office Park will occupy 40,000 square feet and accommodate DAZN's editorial, product and design teams, with scope for further expansion.
Last September, Perform was rebranded as DAZN Group, which houses two distinct brands, in the consumer-facing DAZN and the business-to-business focused Perform Content.
Social media strategies DAZN claims that social media has played a key role in bolstering its brand awareness and driving subscription growth, with figures this week showing that it registered close to 200 million video views across platforms such as Facebook, Twitter and YouTube last year.
Almost 700 million people were reached with the social video content in 2018, according to Grabyo, attracting fans looking for “relevant, real-time video clips across a variety of social platforms, as well as live streams of shoulder content and match footage.”
Asked how he expects the relationship with social media to develop, Lavender said he had taken interest in Amazon’s experiments with Twitch, the interactive video portal that specialises in eSports, but also streamed live NFL games in 2018, and that DAZN could look to integrate more data from Opta, the sports data company housed by Perform Content.
He added: “DAZN is very much about getting fans to watch the sport that they love. It’s not really about stats, but about using data to tell stories and to drive interest in the games.”
Sky is also looking at how best to harness the social media opportunities in real-time, with Gibbs saying: “There’s clearly a lot of activity going around the sports event. Capturing that and making it work for us rather than tapping in to WhatsApp groups, Twitter or Facebook is part of the challenge.
“The ideas are around, particularly a younger audience, engaging with platforms like Twitch, and their expectations around that type of experience. They want to participate and they want to hear different voices and different influencers and different streamers. They want to be rewarded for their actions. They want to be part of a community. There’s clearly something in that and we’re beginning to see some people invest in those type of things.”