Sports Streamer DAZN to Introduce Less Annoying Ad Model

DAZN, thus far an ad-free sports-streaming service, plans to introduce advertising, but in a format that will prevent the annoyance of frequently repeating ads. This format — called “ad frequency” — can replay the same ad six times within a three-hour game, said DAZN Group executive chairman John Skipper, a former ESPN president. His new model, which will debut in the next six to eight months, will focus on sponsored content and product placement. DAZN targets sports deals to be the “exclusive over-the-top provider.”

The Wall Street Journal reports that ad frequency is common in sports, noting that, according to iSpot.tv, “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.”

DAZN first debuted its streaming service in 2015, in Austria, Germany and Switzerland. Now available in seven markets, it “began offering a $9.99-a-month streaming service in the U.S. in September.” The U.S. strategy is to target combat sports, whose fans “are used to shelling out for pay-per-view events.” It has inked deals with Matchroom Boxing and Golden Boy Promotions, and also mixed martial arts outlets Bellator MMA and Combate Americas. In 2019, DAZN will also stream a weekday Major League Baseball show with “live cut-ins of key moments in games across the league.”

This month, DAZN launched “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 December 15.” To break even on the cost of its rights before the MLB deal, said Ampere Analysis, “DAZN would need to hit around 1.5 million subscribers in the U.S.”

Ampere’s study showed that, “around 6 percent of consumers in the U.S. say they enjoy boxing or martial arts, with between 30 percent to 50 percent of those consumers — around 2.7 million to 3 million people — indicating they would be willing to pay for access.” Ampere research director Richard Broughton noted that the target is “certainly not a crazy number to be hitting.”

But DAZN does have a lot of competition in the streaming arena, and Broughton also reported that Netflix “spends between $100 and $140 on every net new subscriber in acquisition costs.” DAZN came out of the Perform Group, a U.K. sports media business that rebranded itself as the DAZN Group in September. Its major shareholder is billionaire Leonard Blavatnik. Last month, DAZN Group said 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.”