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Business lessons from DAZN, a streaming service being called the ‘Netflix of sports’

DAZN is shaking up the sports streaming market by taking on big networks. Here are some rules of survival and success from its story.

August 27, 2021 / 01:25 PM IST
Sir Leonard Blavatnik, the UK's richest man, owns DAZN - a sports streaming service. (Image: Reuters)

Sir Leonard Blavatnik, the UK's richest man, owns DAZN - a sports streaming service. (Image: Reuters)

You must be living under a clunky old TV if you haven’t heard of DAZN.

Pronounced ‘Da Zone’, and launched in 2015, the UK-based streaming service provider has emerged as a force in sports television. It has boldly won the rights for the Serie A over the more experienced Sky, signed up Cristiano Ronaldo as a brand ambassador and has shown no coyness about its ambitions.

Last month, DAZN CEO James Rushton told Deadline that they simply wanted to become the largest and most important sports streaming platform around the world.

Men’s football aside, the company is betting big on boxing, women’s football and Netflix style docu-series on athletes, among other things. In December 2020, it launched its service in over 200 countries, including India, according to some reports.

DAZN’s swaggering market moves caused it to suffer a loss of $1.4 billion in 2019. To keep going, it has had to rely on the deep, silk-lined pockets of its owner, Sir Leonard Blavatnik, the UK’s richest man.

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At the same time, its revenue increased from $497.8 million in 2018 to $878 million in 2019, according to a report by SportBusiness. Rushton told the BBC that profitability was expected “in the near future”.

Apart from Blavatnik’s resources, what has brought the company this far in a cut-throat, big-money business?

A calm head, for one, and the good sense to target one thing at a time. Kevin Mayer, DAZN’s chairman, told Deadline, “You have to play the cards that you are dealt. If you get emotional and frustrated, that’s when you make poor decisions. We’re going to take things one rights auction at a time.”

The other realisation is that content matters above all. Only content can retain viewers. Everything else is gravy.

“We need to put ourselves in a position that would allow us to transcend any turbulence in the business model and technology. And you do that by owning the best content,” Mayer said. “We need to have the wherewithal to own the best rights in meaningful territories.”

It is one of the reasons DAZN went all out on some of its plays. Rushton, in fact, told Deadline that the Serie A deal, for which DAZN reportedly paid $3 billion, would be a case study for MBA students.

“It’s a watershed moment that, in 20 years’ time, MBA textbooks will be talking about as being one of the key indicators of a paradigm shift in consumer habits,” Rushton said.

DAZN intends to cast its net beyond mainstream sports and live telecasts. Gambling, merchandise and gifting are some of the businesses it has its sights on. It also has a boxing show and made a docu-series on the former Brazilian footballer Ronaldo Nazario. Called Ronaldo: El Presidente, it captures the star’s journey from on-field superstar to being the new owner of Spanish club Real Valladolid. Such programming has earned it comparisons with Netflix.

In addition, DAZN paid $8 million for the rights to the women’s Champions League. It is also in talks to buy BT Sport, according to reports. In case its becomes the owner, it would gain access to the men’s Premier League, arguably the most popular football league in the world.

There is clarity in most of DAZN’s goals, which can be another learning for other businesses.

“Big Fights. Great Price. Any Device,” is the simple pitch on its website to boxing fans, for example.

Rushton is also certain that streaming will displace the more traditional linear TV model.

"There are more streaming households, more people paying for streaming services, in most developed markets than there are traditional linear pay-TV homes,” Rushton told the BBC. “So I think that change has happened. It's not for tomorrow. It's not for the future. It's now."
Akshay Sawai
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