Traditionally, sport events have been broadcasted on television channels. Much like for TV shows, whoever was in a position to bid the largest amount would obtain the broadcasting rights. Under this model, many pay-TV channels have acquired a share of the pie which has led to the issue of disaggregation. Different channels and platforms have obtained exclusive rights to different leagues and sports, splitting consumers between many different sources. When associating this with the steep increase in TV rights acquisition costs, French football fans now need 4 different subscriptions to enjoy european football, equating to over 80 euros per month worth of subscriptions.
This trend has turned live football home entertainment into an expensive hobby that only a few can afford. Nonetheless, this left a big part of the low-end market unserved and has given birth to a new offering: OTT’s. Over-the-top media services are less like channels and more like online streaming platforms. OTT technology offers a major advantage to these new platforms as it allows them to bypass broadcast, satellite and cable platforms, which typically control and distribute the content; this also means that over-the-top platforms avoid the heavy costs associated with broadcasting.
The leading OTT sport service is the American platform DAZN. In Germany for instance, Sport fans get most European football as well as many other sports for under 12 euros a month with DAZN. Eleven Sports Network offers a similar subscription; it is only available in five european countries and focuses on acquiring major international sports rights in smaller countries. Although the list of live sport events they offer is exhaustive, these platforms deliver a superior product offering than anything else on the market and therefore satisfy the lower end of the market. These fully digitalised platforms also offer superior customer experience than traditional TV channels do including no pay-per-view, no commercial interruptions, the ability to stream on multiple devices at once and the ability to watch on any device (mobile devices, computers, smart TVs, game consoles or streaming media players).
Resources:
Disrupting established media markets: the DAZN success story
https://www.cnbc.com/2018/08/01/how-streaming-platforms-are-infiltrating-the-ripe-for-disruption-spo.html
https://www.weforum.org/agenda/2018/11/innovation-is-the-key-to-the-pay-tv-industry-s-long-term-growth/
https://www.lequipe.fr/Medias/Actualites/Droits-tv-sur-quelles-chaines-regarder-le-foot-francais-et-europeen-pour-la-saison-2020-2021/1163173
DAZN sports streaming service review: Product, price and features
Hi Basile,
At first, you’re article was very interesting to read and I like your topic!
To answer your question in the title, I think you proved that the industry is already disrupted by these Over The Top Media Services. The innovation can definitely assigned to be ‘disruptive’, since the innovation starts with targeting the lower end of the market and they drive prices down by catching up with the quality standards of the ‘mainstream’ users. Those OTT’s definitely used a smart strategy to disrupt the market.
I think the OTT’s have to be careful for competitors who might get a wake-up call soon. Competitors possibly reacted late because of their eye-flaps and focus on existing consumers. Furthermore, well-established broadcast companies like Netflix could possibly intervene this sports broadcast industry as well.
Very interesting article Basile! I do believe that this innovation has the ability to revolutionize the way the television channel industry. This platform could even leverage on Netflix’s success and also provide a way of providing personalized content, depending on which sports interest you the most! The long-tail phenomenon could help them increase their revenues and customer satisfaction would also increase. An online translation of the comments during the match could also bring some advantage by allowing a wider range of the population to use DAZN. Looking forward to see how this innovation will evolve!