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How DAZN Monetizes Premium Live Sports Streams

Even as a leading global disruptor in premium sports rights acquisition and content delivery, DAZN must contend with the practical realities of serving customers in a broader sports streaming marketplace, and advertising and monetization strategy is inevitably more complicated than youi might expect, says DAZN Global CRO and President USA Walker Jacobs. Customization, fanbase-building, and more factor into the monetization equation, as Jacobs tells Reality Software’s Nadine Krefetz in their candid fireside chat from Streaming Media NYC 2024.

Ad Format Innovation and Market Realities

Krefetz asks if most of DAZN's ad revenue comes from the traditional sources--15- and 30-second ads--and how much more non-traditional or innovative ad formats come into play with premium sports streaming in 2024.

"The practical reality is, we are one participant in a broader marketplace, and that is the currency that the marketplace trades in," Jacobs says. "And so the name of the game, if you're a digital disruptor, there's a really significant pot of money over here that's traded in the form of 30s, and the marketplace wants to equivalize the marketplace in order to shift budgets. I don't know if that's necessarily what it will look like in 10 years, but that's the starting point right now because that's the marketplace reality. So we can sit here and talk about, 'Oh my gosh, we should be doing more branded integrations and we should be doing nontraditional, and we should be thinking of innovative new currencies and new measurements and all that stuff.' But at the end of the day, we're providing a service to customers, and customers are defining how they want to invest, and we're here to serve that."

The other key factor besides audience expectations, Walker explains, is the structural rigidity of live sports broadcasts, which depends largely on the flow of the match that DAZN is delivering. 

"Most of the rights we're buying are pre-formatted," Walker says. "It's a live game. There's natural commercial breaks it. The consumer isn't like, 'Oh my God, I'm missing the game, because you're showing commercials.' The game stops. And so what we're bidding on when we buy the rights is a pre-formatted game designed for 30s. For that to change, it's not just our desire to change it; the entire marketplace, including the rights holder and how they're selling their rights and what they're allowing their broadcast partners to do, and how marketers want to invest. All of those things would have to change for us to get away from just trading in 30s."

Fans in the Zone

All that said, Jacobs says, DAZN does find ways to vary the fan experience and bring them closer the game than traditional linear broadcasts typically allow. And that means offering new opportunities to brands as well.

"There's a lot of innovation around new formats, new viewership," he explains. "We have a product called FanZone that is not dissimilar from Twitch in that it's a fan-based community with live chat and integrations and polling and contest. It's really fun way to watch live sports."

In Germany and some other countries where regulations allow, Jacobs continues, DAZN offers product called DAZN Bet, which gives fans in-game opportunities "to wager on what's going to happen next in the game. It's excellent for engagement and consumers that like that type of experience."

Tiers for Casual Fans and Superfans

Regarding more basic levels of access, and how fans can opt in to see the sports they want to watch in an increasingly fragmented and labyrinthine sports viewing environment, Krefetz asks, "Is this a subscription service? A free service? How do people get it?"

"In the U.S., it's a subscription service," Jacobs replies. "It's $29.99 a month, the first month free. The price varies depending on the country." (As of late 2022, DAZN was broadcasting in 225 countries.)

"But more and more and more of our programming is windowed in front of the paywall," he continues. "So what we're trying to do is understand that different cohorts of consumers have a different threshold. For example, we've been really aggressive in Germany. We have some of the best rights in the German marketplace, including UEFA Champions League, including Bundes, Liga. Every single match day for the entire season, at least one match is in front of the paywall. So there's always action you can come watch on DAZN. Now, if you you're a superfan that wants to watch every FC Bayern Munich game, that has a different pricing threshold. But it's still more economical to subscribe to our service than it is to be buying tickets and going to games."

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