DAZN dives into Canadian market with exclusive NFL streaming rights
DAZN CEO James Rushton was admittedly exhausted when he met with the media in Toronto last week to celebrate his company's foray into the Canadian digital sports market.
You would be, too, if you were as busy as Rushton.
DAZN made a stunning splash earlier in the summer, announcing it had secured exclusive rights to stream every live NFL game this coming season. That package includes NFL Game Pass, NFL RedZone, and the entirety of the old NFL Sunday Ticket, which provided out-of-market games to Canadians who had purchased the package through their cable provider.
DAZN is available in Canada on the majority of network-connected devices, including smart TVs, smartphones, tablets, and game consoles like Xbox One and PlayStation 4.
Rushton believes his product - which is already thriving in Germany, Austria, Switzerland, and Japan - offers an alternative to cable programming that will appeal to most football fans.
"As we started to develop our ability to deliver live content around the world, about two, two-and-a-half years ago, we really started getting serious," Rushton told theScore. "We took a step back and said, 'If you're buying your home broadband, would you accept a 24-month contract with a penalty to get out of it? Of course you wouldn't. Would you accept paying 100 dollars for access to relatively vanilla sports content? No.'
"So we said, 'We can do this. We can create a better deal.' So then it was, how do we do it? And what market do we do it in? And how do we try and position ourselves? And we came to the realization that it had to be non-linear. There's no need to create linear outputs anymore. Buy all the content, put it out there, and let the fans choose."
The move is a significant shakeup to the NFL broadcast environment in Canada. Customers for both Rogers and Bell will no longer be able to order pay-TV NFL packages, though Rogers has countered by offering its Super Sports Pak subscribers a time-shifting package that will give them access to NFL games on channels they might normally not be able to watch.
"We know our customers want to experience sports on a big screen in HD or 4K from the comfort of their living rooms, and we'll continue to offer all the best weekly NFL matchups through customers' regular cable subscriptions," a Rogers spokesperson told theScore on Thursday.
Rogers estimates that customers will be able to watch up to half of the games on Sunday afternoon, and 60 percent of all NFL games in a given week. NFL Sunday Ticket will still be available to commercial customers.
Bell did not respond to a request for comment.
As for DAZN, diving headlong into a new market is one thing - but doing so with one of the world's most valuable sports properties marks an incredibly aggressive approach to expansion. Rushton wouldn't have it any other way.
"You need a big data set to learn - and the only way you get a big data set in sports is buying premium rights that people are interested in," Rushton explained. "And premium rights, unfortunately, create big-ticket price tags around them. And so you have to be aggressive.
"Would we have made this play in Canada if we had had an indifferent start to our life in Germany, Austria, Switzerland, and Japan? No. Of course not. You look at what we're doing in those markets, we've invested and invested. We're making a big bet, but it's a bet based on a year's worth of empirical data and a load of research on what Canadian sports fans like and how they feel about multiple sports, not just hockey."
Rushton admitted that the NFL package wasn't cheap. In his eyes, though, cost was far from the only consideration.
"Was it a tense project? Was there a strong negotiation? Yes, sure," Rushton said. "The NFL is very good at commercializing their rights. Was it fair? Yeah, of course it was. They're very fair owners and operators. Was it a process where it was all about the dollars? No, it wasn't.
"Obviously we had to put an amount of money that the NFL is comfortable with, but there are other factors at play. It's an interesting play for them to see how a pure streaming service can work with their rights. And we share a plethora of data, way more than a traditional pay-TV operator would."
The NFL content will resonate most with the majority of Canadian sports fans, but that's far from the only property DAZN offers. Earlier in August, it finalized a distribution partnership with beIN SPORTS, allowing the streaming service to provide coverage to Canadian subscribers of La Liga, Ligue 1, Serie A, and the Champions League, among other properties.
Fans can purchase a monthly subscription for $20, or they can opt instead for a limited-time offer of $150 for an annual subscription. Canada's the only place where the annual package is offered - and Rushton is open to the possibility of even more varied subscription options in the future.
"We've talked in the past about whether we want to do smaller bite-sized payment models," Rushton admitted. "It's something we continue to think about. We're a business that likes to make decisions based on our user feedback - especially big decisions.
"We have a pretty big beta user group, a pretty active base of testers. In the next six months, sure, we'll start to think about whether there are different ways we could look to commercialize the service. But we won't do anything without reaching out to Canadian sports fans."
DAZN is also ad-free, at least for now - one of the key benefits of being part of Perform Group, one of the world's largest digital sports content and media organizations.
"We're purely a subscription business," Rushton said. "We don't have any advertising at all. We don't do any interstitials. That's not to say we don't work with brands. We'll work with brands on promotions where, if you interact with a brand or buy something, you get a discount on DAZN. But we're not really interested in having 30-second spots across our business."
Yet, despite making waves with its NFL rights acquisition and multi-platform availability, DAZN still faces the oldest and most significant issue relating to streaming live sports: The delay between the actual game action, and when that action shows up on users' connected devices.
"(Delay) is an inherent industry challenge with internet protocol-based delivery," Rushton said. "It's something we take pretty seriously as you can imagine - and we're always looking at the trade-off between quality and latency. One of the things we've really focused on the last six months is trying to deliver the best 1080p HD signal from the lowest possible bandwidth. And we've seen a 100 percent improvement from where we were six months ago.
"I would love to say there's a sort of silver bullet whereby, with the flick (of) a switch, a piece of code will be released that would change that. But it doesn't exist. And it's one of the challenges that live sports have. It's something we're aware of and continuing to look to improve, but it's not something that is unique to DAZN in any way. It's something I do think will improve over time."
The migration of DAZN to Canada seems like a precursor to an eventual move to the U.S., where the market is 10 times bigger - and sports fans are equally ravenous for content. The competition for eyeballs is sure to be fierce; one major player in the market has already made a move. Turner secured rights to European soccer Wednesday with designs on creating its own subscription streaming service next year.
Though Rushton is aware of what's happening - and will continue to happen - in the U.S., for the moment, his focus is north of the border.
"We're launching in Canada because we think Canada is an amazing opportunity for us," Rushton said. "We aren't launching in Canada because we're trying to step into the U.S. In terms of markets, in order for our business to be as successful as it can be, we need to be in big markets that have huge connected populations, huge disposable incomes, and are interested in sports. The U.S. kind of ticks a lot of those boxes.
"But the challenge is that you have to write some big checks to play in those markets. Are we interested in launching in the U.S.? Yes we are. Does that mean we're definitely launching in the U.S.? No, of course it doesn't. It's on the list. But we're in Canada because we love the passion Canadian sports fans have, and we believe our proposition - fans first - resonates really well against our competitors in the market and resonates really well with fans."
(Photos courtesy: Action Images)