There’s been plenty of buzz about DAZN, a new sports streaming service that’s launching in Canada. DAZN will be the exclusive Canadian home of NFL Game Pass, offering all NFL games for $20 per month (or $150 per year), with no blackouts, even if games are offered on TV. The NFL is the only league on the Canadian menu so far, but DAZN promises more content in the future. While landing NFL digital rights in Canada is a big win for DAZN, I suspect expanding into the other North American pro sports leagues such as the NHL, NBA, MLB, and MLS and becoming a true “Netflix of sports” in Canada will prove difficult.
Key Business Challenge: Bell and Rogers
For starters, it’s important to note that the NFL doesn’t have a Canadian team. Despite the NFL being popular with Canadians, no team means less competition and complications when it comes to obtaining digital media rights. The NHL, NBA, MLB, and MLS all have Canadian teams. And not only are Bell or Rogers the media partner for many of those teams, in some cases they own the teams. They both control the Toronto Maple Leafs, Raptors, and FC, and Rogers owns the Blue Jays. Considering both companies rely on premium live sports content to curb cord-cutters and generate ad revenue, obtaining digital media rights for teams they own is not happening. And the NHL is also a no-go in terms of digital content in Canada for the next decade due to its 12-year, $5.2 billion agreement with Rogers. That leaves limited options for DAZN.
Where DAZN can make in-roads with leagues like the NBA and MLB is being able to stream out-of-market games and producing exclusive content. Twitter Canada is doing a nice job of this with their many sports content deals, including a weekly live stream of MLB games. The audience numbers pale in comparison to a Raptors or Blue Jays game, but the added content would get DAZN in on the action and offer subscribers more value. Furthermore, striking streaming deals with emerging leagues looking for national exposure, like NBL Canada and the new Canadian Premier League, is another opportunity for Canadian content.
Although DAZN offers Canadians a new alternative to cable for sports content and helps put some pressure on the Bells and Rogers of the world, I believe that without the NHL you can’t be a true “Netflix of sports” in Canada. Price is also an issue. For $5 more at $24.99 per month, Sportsnet Now packs more punch, offering Blue Jays, NHL, NBA, and EPL games. For me, the bigger threat to cable companies in this space, both here and in other countries, is major tech players like Amazon, Google, and Facebook. They are global brands, have massive audiences, piles of cash, and like what we’re seeing with Twitter, are aggressively expanding their video capabilities and content. So, while DAZN is a first mover, I think the real sports streaming content disruptors have yet to arrive.