Sports streaming platform DAZN plans new integrated ad model, WSJ reports
- The ad-free sports-streaming platform DAZN is looking to obtain the digital rights to major U.S. sports and introduce new ad models, according to The Wall Street Journal. Instead of the repetitive ads that run on TV broadcasts of sports, DAZN will integrate advertisers into the programming via sponsored content and product placement.
- DAZN, which is led by former ESPN President John Skipper, plans to introduce the ad model in the next few months. Rather than competing with TV networks over rights, the company plans to look for deals where it can be the "exclusive over-the-top-provider," Skipper told the Journal.
- The streaming service debuted in 2016 in Austria, Germany and Switzerland and began offering a $9.99 per month service in the U.S. in September. DAZN shows boxing and mixed martial arts, and next year, will air a daily weekday Major League Baseball show. This month, DAZN unveiled a marketing campaign, created by McGarryBowen, in the U.S. across TV, online and out-of-home to attract new subscribers. The campaign features boxer Canelo Alvarez and boxing announcer Michael Buffer.
DAZN is attempting to tap into sports fans shifting viewing habits and offer advertisers new and unique opportunities for reaching viewers outside of traditional TV ad buys that can feel repetitive and overwhelming to fans watching live games. For example, the CBS broadcast of the Thanksgiving Day Chicago Bears-Detroit Lions NFL game included 122 national commercials, with repeat ads by Apple, Walmart, American Express and others, according to iSpot.tv data cited in the Journal report. The news comes as sports viewing and marketing are undergoing significant flux due to growth in digital options.
Gen Z males aged 13 to 21, an important demographic for marketers, report being frustrated that traditional sports are overloaded with marketing messages, and 55% say they watch highlights to avoid ads compared to 45% who watch full games, according to Whistle Sports research. More than half of Gen Z males, or 52%, also spend more time watching nontraditional sports than traditional sports, like baseball, football and basketball.
Marketers could welcome the opportunity to offer higher-value messaging through product placements and integrated content, as many have worked to adapt to the rise in cord cutting and sports fans more often seeking out sports highlights and other content over watching live broadcasts. The U.S. product placement market is projected to reach $10 billion in 2018, and the value of product placements increased 13.7% to $8.78 billion in 2017, according to research cited by MediaPost. OTT services, like Netflix and Amazon Prime, are the fastest-growing segment.
The OTT market is becoming more competitive when it comes to investing in sports content. The deals are expensive but can attract subscribers and advertisers. For example, Amazon's 2017 deal with the NFL was valued at $50 million, according to the Journal report. DAZN would need 1.5 million U.S. subscribers to break even on the cost of obtaining the MLB rights, estimates from Ampere Analysis cited in the report revealed. The company doesn't break out its subscriber numbers.
The NFL is seeing a viewership boost on digital platforms, since expanding digital access to games this season. Viewership was up by 65% from 2017 as of week four in the season, with the average minute audience of 326,000, according to the league. Amazon has seen a combined viewership of 14.7 million for streaming of seven "Thursday Night Football" NFL games this season, marking a 22% increase over last year. The average minute audience is up 36% to 455,000. Amazon has already extended its NFL deal for streaming rights for "Thursday Night Football" through the 2019 season.
- The Wall Street Journal Streaming Sports Service DAZN Aims to Introduce Ad Model Without All the Repetition
- Marketing Dive Study: Brands seek higher-value product placements as traditional advertising shrinks
- Marketing Dive Study: 52% of Gen Z males prefer nontraditional sports