April 5, 2023 • 37 mins
On this episode of the StreamTime Podcast, Nick Meacham interviews former DAZN chairman Kevin Mayer. They discuss the future of DAZN, as well as his time at Disney and TikTok, and the future of the sports DTC ecosystem.
Talking points:
Talking points:
- Is bundling the correct approach for sports? - (4:55)
- How are streaming platforms evolving? - (8:28)
- How do DAZN approach international expansion? - (12:04)
- Why DAZN’s fight sports monetization strategy pivoted? - (17:45)
- How DAZN will reach profitability? - (20:57)
- Are there enough sports fans to support a competitive sports streaming ecosystem? - (26:36)
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:11):
Hello everyone. Welcome back to the next edition
of the sports Pro stream Time Podcast.
My name is Kristin on this community lead here at sports or
media joined as always by our CEO.
Nick Meacham now, Nick almost, put my foot in it during our
Ott. USA Summit.
We were joined by Kevin mayor but because the Bangles are
always on my mind. And in, FL is all always on my
mind. I almost went up to him and
(00:33):
called him Michael Mayer. Who is the number one ranked
tight end going into the draft. Who keeps getting rumored to be
a target of the Cincinnati Bengals.
So, in my head, I was like, I don't think his name's Michael
and I remembered and found out that it was Kevin beforehand.
So that would have been quite the blunder.
(00:53):
Yeah, that would have been quitefunny to see if he would have
even reacted on this. Want to see?
Normally how tall is he sick? Foot four and a half, Michael
Mayer. Think the height difference
might have been the, the big giveaway.
But yeah, that that I mean I've put my foot into it several
times many people over the years.
So I'm just calling someone by the wrong.
First names would be a will be alight, get out for something
(01:17):
like someone like me but yeah. Kevin did you have to have a
chat with Kevin off stage? I did not actually get a chance
to speak to Kevin. You kind of know how it is with
events. So usually when those speakers
come off stage there's a long line of people that they want to
speak to Um, so I unfortunately didn't get a chance just running
events. You kind of go Gotta Go from
stage to stage and keep the showon the road but no, but the one
(01:37):
chance I did have I kind of got scared because I definitely
almost want to call them Michael.
Well you never know, he might have been really interested in
the Bengals future and who they're going to draft.
You know he was by is one of thebiggest buyers of NFL sports
rights through his ESPN day. So no doubt has his fingers on
the pulse of the the upcoming draft.
(01:59):
Absolutely might be Fantasy player Dynasty looking for a
rookie tight end coming in, but you kind of touched on a little
bit, we had the opportunity or more even closer.
You had the opportunity to speakwith Kevin, you know, Kevin's
background formerly at Disney, sort of ESP.
N plus launching that platform is also spend some time.
I believe he's the CEO Tick-Tock.
And then now, the chairman of his own someone who has been
(02:21):
right at the heart of all this Nick.
So, maybe just give us a little bit of insight into your
conversation with Kevin. I mean, Kevin's fascinating guy
and you heard He called me out, as you'll hear in the pot that I
said he had 15 years experience.At Disney turns, it was 25,
which is quite a bit different, so that was good.
Good. Bit of research to kick off the
the session with him but no, he was president of
(02:42):
direct-to-consumer in International Falls and when he
would he'd wrap up and he finished up there at about 20,
20 before checking on those roles at Tick-Tock and then and
then does own and is also, Now set up his own media business
which invest a whole bunch of different creators.
But look, he's effectively was the driving force for To take on
the streaming Revolution and thedirected consumer Revolution.
(03:05):
I don't know if you would call me is right at that.
Bob, iger's right-hand, man, or offsider or counterpart, but
they were very watch working together to drive that, that
Revolution forward. So few people have been in a
more important or influential position than Kevin has in
driving through this. This sort of change, we're
seeing across this. The streaming streaming World,
(03:27):
actually quite funny, a child sitting next to him waiting for
our to start and Louis Civil War.
So who is the president? And I think chairman of Warner
Brothers Discovery Sports was onstage and when he was talking
about bundling, basically, Kevinwas up asked me that question
because I have a completely different opinion to what Lewis
(03:48):
has just said, so make sure you ask me that.
So I had to throw their questionin added pretty quickly because
he's question. His answer was, I think was
Basics and to do with Louis talking about the role of sports
playing as a A either complimentto the entertainment space,
where he had a different lens, which you'll hear about it in
the, in the, in the conversation, just shortly.
But look, really, what would youcall?
It? Really direct really intelligent
(04:10):
guy. Not, not afraid to sort of not
share opinions. Obviously his role as chairman
of disown finished up as recently as a week before the
event. So kind of had to throw away.
A lot of my notes not because I wasn't going to talk about the
Zone which we do, but also I so had to shift the focus back to
more of a balanced view around the industry and his experience.
Around Disney, which is actuallykind of what I wanted to do in
(04:32):
the first place. So it kind of worked out pretty
well. All things considered.
Well, I think just the job titles alone, the streaming Wars
and everything. It's there.
This is absolutely an episode, she don't want to listen into.
So I hope everybody enjoys it great to be back.
(04:56):
Onstage already to goes two out of three.
Perks of being a CEO, an event like this.
But Kevin we've got lots to cover and obviously you've been
15 years at Disney, culminating in your role as chairman of
direct to Consumer and international and oversaw.
This t, plus an ESPN pluses development and strategy being
rolled out so as good a person as any I think to be talking
(05:19):
through things. But just tell me before we jump
into it. What's the sea change been like
for you to shift away from that the Disney Juggernaut into the
and tell us what through the different things you been up to
the last Couple of years. Well, I was at Disney freshly 25
years so there you go. It is already.
It was fun to be, there is a bigplatform we are in all sorts of
(05:41):
different businesses Jenner, tainment writ, large Sports
movies streaming channels, themeparks consumer products.
It's great company with a broad remit and people love it.
It's all the brands that really matter in entertainment are kind
of housed at Disney so that was that was a fun, fun ride.
And sometime it tick, tock running Tick, Tock around the
(06:02):
world. That was an interesting
Endeavor, which I'm numbered be may talk a little bit about
today. And now I'm doing a couple
things, but the main thing I'm doing is I've built a new studio
called candle media with Blackstone, private Equity been
doing that. That's been a lot of fun, and I
was chairman of does own until last week for a couple years and
that was great. And that's what the main subject
of what we'll be talking about, obviously.
(06:24):
And I'm also investing in consumer technology.
So it's, it's fun to be outside of a big company.
Any he thought you were busy, hegot Kevin 7 K, 1 up to you
already. So Kevin, let's talk about a few
things, fix it because Louis andC were talking about it.
Then I want to talk about things, I will be looking at the
sports dreaming landscape in sports role in sports.
(06:46):
What are your thoughts on the concept of the bundle?
Because everyone talks about a constantly about that's what
consumers one and we've had themflowed over the last couple of
years. Just what's your take on how
that plays out, you've seen thatfirsthand with both Disney ESPN
and his own be more Sports. So what do you think?
Well, it depends on what you mean by the bundle.
The bundle that you're talking about is the big pay TV bundle
(07:06):
in the u.s. that has entertainment.
It has Sports is a huge price. There's hundreds of channels,
and I think that is on its on a massive declining trajectory.
And there's the reason for that,is that many consumers don't
feel well served by the bundle, if you're a sports fan, and
you're paying a lot of money forthat bundle.
Most sports fans are also entertainment consumers, so
abundant makes a lot of sense for sports fans, you know,
(07:29):
Sports. Being as expensive as they are.
That has prompted as made the price.
Go, go go very high. They're one of the reasons, I
think probably the main reason the bundle is in trouble is
because of sports and many people are not sports fans.
And if you ask everyone to pay ahuge amount of money for sports
are not watching it, I think that they cause us some causes
(07:50):
turn. And I think that's what you've
seen in the US and Europe has been entirely different because
people have paid for sports. Even those not streaming all the
time, even though it's a could, Satellite platform or cable
platform people that sports fans, have paid separately for
sports and entertainment. They've got business model has
worked very well and it's prettystable again as much different
here. And I think, forcing people in a
(08:12):
forced hard bundle to buy sportsthat they don't watch as
expensive as that is. I think has already proven to be
a huge mistake and I think it will not.
I mean, it's not a good idea. Now, to force people that are
buying entertainment services toalso pay for sports.
It's just too expensive. So, looking back at What you set
up a notch over sore at Disney with the Disney plus, an ESPN
(08:34):
plus strategies, pretty much every platform in this industry
has changed or pivoted at or evolved a strategy of the last
few years. What you said up to what it is?
Now, how much is that change? What have you seen from the
outside in? I guess, and there's in the
entertainment platforms. Well, I think streaming has
become the norm. If you're watching entertainment
programming, there's not a wholelot of reason to watch it on a
(08:56):
Time basis. So that, you know, watching a
show Wednesday at 9 p.m. it doesn't make any sense.
There's no need for it. There's no unlike Sports, which
are obviously watched, when theyoccur entertainment is much
different. So, streaming on-demand,
programming has been the plate. The way to people like to like
to watch that entertainment programming.
Think it makes a ton of sense. I think streaming services are,
(09:20):
you know, they offer high quality and good and good value
for the money. Even the more expensive ones HBO
Max, you know, Louise's from Warner Brothers, Discovery, it's
great value. They have really we premium
programming and even though it's$15 a month, I think it's still
good value. When we launched Disney plus, we
launched it at 699 because we wanted to have a very
democratized experience. People families around the
(09:42):
world, love Disney and Marvel, and Star Wars and Pixar.
And we didn't want people to have to make a choice financial
aid, either take it or not. Take it, you wanted people to
think, how could I not subscribeto Disney plus?
It's such a great deal. Now, there's a lot of pricing
power to be in Disney plus, I going forward and I think
they'll take advantage of that. Um, but you know, the streaming
landscape has gone sort of as, as I expected personally.
(10:05):
Netflix is a juggernaut, I thinkit's unassailable.
The no one's going to beat Netflix said, you know, sort of
the number of subscribers that have around the world and the
number and the revenue and ultimately, the profitability
that they can pull in, I think Disney plus is, always, was
always intended to be a, you know, a just for the fans of
those Brands. So I was not going to be quite
as well, penetrated, as Netflix,and never was intended to be.
(10:26):
I think Warner Brothers, you know, HBO Max is great.
I think, you know, when you get to Amazon Prime and to Apple TV,
plus they're the degree of financial wherewithal, the
companies that are that are backing those, those support
streaming services, really? Really, they're going to be
around for a long time, Amazon and sports, apple and sports to.
I think when you get to the Lester streaming services, I
(10:47):
think you'll see some consolidation happen, but it's
really taking over the world, and I think it's the
appropriate. The appropriate way that you
should watch this programme justquickly on Apple.
Obviously, one of the biggest moves they've made is the Less
deal quite a significant deal and and in terms of the scope of
the being Global, what was your take on seeing that deal?
Was there something that surprised you or move?
(11:08):
They needed to make if they wanted to become a player in the
sports sports world, it's a bit surprising, the pater that they
paid a lot for those rights muchhigher, much, massive increase.
If your Apple you have aspirations to happen to, you
know, improve your brand. I see that the whole streaming
service for Apple both entertainment and Sports is
(11:30):
really about improving the Applebrand and I think you'll see
they'll make moves at a very premium level because that's the
there's a very premium nature tothe Apple brand.
So I think that a lot of that isa marketing expense for them.
A lot of it. I don't think, I don't think
they plan to have a huge contribution directly from the
economics of the streaming services especially in the
context of Apple which is two point four trillion dollar
(11:52):
company. But I do think Sports is a good
brand builder for them. I don't think they'll go crazy
and buy all sorts of sports, butopportunistically, they A niche
that can really bolster their brand, they'll be, they'll be
participating. I think.
So, you just mentioned the design earlier about you
finished up as chairman with them.
After two years with the companyand over seem pretty dramatic
change. Over those two years, you
(12:13):
actually took over from your forthe former colleague, John
Skipper, who was chairman up to that point, talk about that
Journey. What what was it?
That sort of, I guess we're whathave you seen change or want to
have you driven to change that business over the last couple of
years? Because it doesn't, it might
from Ireland's. It looks quite different.
What I did a couple years ago. Well I think we made a fair
amount of changes like I'm John Skipper, former ESPN, chairman
(12:35):
is a great friend of mine, awesome guy.
And he had a vision Ford has owned, mine was a bit different.
I think does own the center of gravity of design is better
served by being in Europe. And in some parts of Asia, Japan
is a pretty big market for them.There was a global nature to the
does own business. When I first came on board,
which I thought was a bit of a bit of a misdirection, because
(12:58):
as we know that there aren't that many Global Sports.
I think has been mentioned on the last panel or I think you
mentioned that actually I did indeed think the NBA is a global
sport. I think EPL football is a truly
Global sport. Most of the other side football
leagues in Europe aren't really that Global.
But EPL has carved out a really substantial position and look at
(13:18):
the NFL we just be it does own just didn't NFL deal to take the
NFL Sunday Ticket package outside the US.
It's not really a global sport. It really is Center to center of
that is definitely the US and Canada is a big fan of southern
Mexico. You In Mexico being a
multi-sport country, which it is.
But I thought I felt that to be a real premium service to get
high are posing of the the revenue per user on a
(13:40):
subscription basis. You really had to have the
sports that matter in the local markets and trying to come to
the u.s. and compete against theESPN and TNT and apple and
Amazon and all those guys that seemed like a very difficult
difficult thing to do. But going into markets, where
there's a traditional media competitor like a sky, or Miles.
(14:00):
We thought that was something that we could actually take a
whole lot of. So we went around it.
We went around the, the countries of Europe and we did a
pretty good job. We had all the Syria rights in
Italy and Syria as a religion inItaly.
And we've done a really good jobthere.
I think we've gotten half the LaLiga rights in Spain.
We've gotten Bundesliga rights and Champions League rights in
(14:22):
Germany. So, those three big countries in
Europe. We actually have I think we're
the premier provider of sports, try to get the EP Well, in in in
the UK I think my friend Louise here, beat me out for that one.
So that was a bit of a disappointment but good on him.
That was a good move for those guys.
And we have some things. A smattering things that we have
(14:42):
around the world boxing and Combat Sports, being the major
one. But also women's football.
We have the champions league forrumors boards globally, and La
Liga, women's soccer globally also.
And I think we're becoming a bitof a home for for women's sports
around the world which I think that's a good position for
design. The NFL game past year, I think
is a really interesting one and maybe doesn't get that much
(15:04):
coverage over in the u.s. So I'm not sure how much it did
because I'm based in the UK, but10-year deal before.
Purported figures are pretty significant.
I think they're jumping around 100 million a year is depending
on who you ask, but I'm just curious, the dynamic there is
completely different. You're talking about taking a
direct-to-consumer OTT platform into and that, and that sort of
(15:25):
relationship, the NFL has, and they're giving over the rights
to that too. Build effectively from what I
understand that the platform effectively within the does own
ecosystem and on that Tech stack.
So it's quite a huge shift for the NFL to do that.
And to take that step away from that direct-to-consumer
relationship, it's not uncommon.We're seeing moves like the WWE
and the peacock deals. An example of people, there's a
(15:48):
price to pay or a willingness toshut up an Ott platform.
If you've if either the economics, make more sense.
But just what's your take on that move, its, it took many by
surprise that make that sort of Commitment.
But equally gives you a huge Runway 24 design to the build
and make a proof of concept thatsupposed to other sports
properties, but I think it's difficult for any single sport
(16:11):
to create his own direct to consumer service.
There's a bear is in sports for sports fans of big value and
aggregation you want to go to one place.
You want to see all the favoritesports that you have really
hard. I think for the WWE's not really
a sport but call it a sport to have its own direct to consumer
services. That's not the critical mass
isn't there. In the NFL outside the outside
the US how many its own direct to consumer service.
(16:33):
Again I think is subscale and doesn't certain is hard to find
you've to Market you to find those NFL fans where they are
and to Market to them and have to build bring in subscribers.
Just to an NFL offering really difficult outside the US, much
easier as part of his own, wherewe can cross, you know, Market
to football fans and they'll soccer fans, we have to
differentiate now, soccer fans versus versus NFL fans and and
(16:56):
we have already have a top of the funnel with sports fans that
we have engaged. We have the As I think it's,
it'll be an easier sell for us than us, than they have been
doing stand alone. So, I think it makes a lot of
sense to have aggregation with in sports, where I have
exceptions, taking the aggregation into Entertainment.
Also, I think that bundle is a tough one.
So look, we my relationship withthe NFL, goes way way back
(17:18):
because of my time at Disney andESPN, it was, I think a good
deal for both of us. I'm back, I can't comment on the
on the details of it because youhave the term correct.
It's 10 years and and I think it'll be A fascinating adventure
for the next 10 years. I think we'll do really well and
I think that the NFL's interest in growing the fandom for their
Sports outside. The US is going to be well
(17:40):
served by being part of design. I think it's important to do a
great job, the fight Sports partof design.
I wanted to take a step back on that one because the big move
there was that fight sport has historically been pay-per-view
is that the economic model behind it does own came in and
said, well we're going to offer it for a subscription Come in
and out. That's that's the model very
(18:02):
simple. You can pee pee in a typical
subscription model and drop at any time last I think year two
years ago maybe pretty quickly. After you've been involved you
change that that economic model just talk us through that that
decision and why it didn't work as just this the Standalone
subscription monthly monthly model.
Sure. The problem is when I launched
(18:24):
ESPN plus really it was just Combat Sports.
For the most part, you have see both the fight nights and the
paper. Unite's we got we licensed
amateur boxing, top-ranked. Boxing was on there too.
And we had a whole been thousands of other of other
programs, mostly college sports and a few.
Highly few games from the from baseball by and large those that
(18:45):
it was Combat Sports and we did something really stupid.
I did. It was my fault.
We had a really Premier Pacquiaofight on Emmy.
ESPN plus meal. Should be again, a Disney, we
believe in democratization of these things.
So we went in a very low price for Nine a month.
Well, we had and we also had a one, a 30-day trial period back
then. So we had is something like
(19:06):
700,000 people come watch the Pacquiao fight.
Most of them are free to do it for free because we had this,
this trial period. And then, of course, on
subscribe to the never never became paying subscribers and
even those that did pay paid for99 and they left.
So we didn't make the kind of money.
We should have that was a pay-per-view quality event.
And so I kind of regroup and thought about that.
(19:26):
And so that was kind of not a smart move, we left a lot of
money on the table. Table, and we left a lot of
subscribers on the table. So what we did there, we decided
to make these Pay-Per-View fights pay-per-view, quality
fights a little more expensive than their Trisha had been.
We added $20 to them, if you were not an ESPN plus
subscriber, and if you bought that, you become an annual
subscriber to is pain. Plus, if you got and that works
very, very well. So, we had UFC fights me a
(19:47):
top-ranked fights, and when theycame in, we would get hundreds
of thousands of people to pay ifthey were already an ESPN plus
subscriber, they pay a normal actually slightly discounted
Pay-Per-View price. But if they weren't, they became
annual subscribe. And it's great to have annual
subscribers because you'll have the monthly turn and all that
stuff. So we turned it on his head and
instead of making those paper, you B fights financial disaster,
(20:09):
we actually made it really work well, so that that concept
really worked when I got to the Zone, I noted that they were
just doing subscriptions. The same thing.
People would come in by a month and leave so they get a even
though the subscription price isrelatively pricey like $20 a
month, you get people for a month and they get basically a
pay-per-view for $20, and that'sit's worth more than that.
There's it's a giveaway. So, what we decided to do is
(20:32):
update our platforms capabilities, focus on
pay-per-view and we still have subscriptions, but if you have a
pay-per-view quality fight, yet paper, paper paper, you quality
price. And I think that made a lot of
sense for for design and we got in a lot of subscribers because
of that, be gay people, three months of subscription when they
came in for a, for a pay-per-view.
So similarly, did ESPN plus worked really well.
(20:55):
It had to be done so back on design, a little bit further,
the They published their accounts of their finances.
They big numbers and, and broadcast those across the
industry. We cover them quite a bit of
detail. The counts numbers were for the
end of 21. I think, if I remember
correctly, which is just coming out the other side of the
pandemic, so things were changing again.
(21:16):
But to little bit over two billion dollar Revenue, little
bit of a two billion dollar lossfor that those accounts now.
Fast forward to this year or the, the so-called the
commentary or the communication is We are going to be profitable
from 2024 onwards and in fact, the end of this year, they are
going to be becoming profitable for the quarter.
(21:38):
Obviously your what, what how doyou make that?
That move? That's a bit.
How do you get there? How does, how does someone like
design? Get that?
Because that is a big hurdle to overcome and it just doesn't
grow on trees. In the market.
Subscription Market is, is competitive.
How viable do you think that is to be able to be achieved in
such a short window of time? Well, the 2021 it, As a lot of
(22:01):
that 2 over 2 billion dollar loss was because of re
recapitalized some loans that the parent company and made to
it. And a lot of really more like
1.2 1.3 of operating losses and those are tough year 2021, we
bought those new rides. We were just growing our
subscriber base and I was that was the peak loss of year for
Ford has owned, a big loss. I mean, as a peak, even as a
(22:21):
peak loss, it's not nothing to sneeze at.
But this than 2022, we increase prices across the board and the
countries and Italy Spain. In Germany where we had those
Premier Football rides. We had underpriced it for a, for
a the first year of our that we had those rights.
Also my call frankly. I thought that maybe there would
be more polite, price elasticity.
Then there was in Europe and people in Europe, are used to
(22:44):
paying a big premium for sports from Sky.
Whoever else the provider, was in the 30 Euro range and we were
priced at about 15 to 20 euros, thinking that we could expand
this subscriber Universe didn't work, didn't happen.
So we went up for the to the premium price and we didn't lose
money supply. I lost a couple, but it was
really the right, the right moveto increase that price into the
(23:04):
premium realm, so that bumped our revenues dramatically.
So you'll see a much bigger if we did nothing else, the
revenues would move from 2 billion to, you know, closer to
three and a half or four billion, the next year's.
That's it. We're going to see something
like that, this year, but we also had we're taking advantage
of two other really substantial opportunities.
One is advertising. I don't think that people talked
enough about the advertising capabilities in sports.
(23:27):
First of all, it's the last place you can aggregate a really
large audience. Audience in this world.
You know maybe awards ceremony is like we had the Oscars a
couple nights ago from that's right.
I didn't look at the ratings butthose have been declining quite
dramatically, Sports it held up pretty well.
So sports are the places where you can.
You can actually aggravate a bigaudience and the other thing
does own is streamed. So all of our audience have, you
(23:48):
know, accesses our programming on platforms that can support
targeted advertising. You can take, you can
dynamically insert ads that are targeted to different subgroups
of the audience that are watching that Chris has this,
the cost of the advertising building increases the value of
the advertising, and that is something that's happening
across the entertainment ecosystem, these over-the-top
platforms both an entertainment or sports, that offer the
(24:10):
ability to have a very high quality brand and message and
high-quality video environment. But do it on a targeted basis
that's taking over the world. So, linear TV, that does not
have any targeting. Is really collapsing and just
the target ability of these Ott platforms.
That's really big. So advertising is growing quite
substantially and profitably andmost.
Sizing Falls right to the bottomline.
(24:31):
So that's been a big Vector of opportunity and the other one is
betting, obviously are the CEO shy.
Segev of does own was the CEO ofentertain?
The biggest? I think, I think it's the
biggest Excel. Yeah.
Betting operation in Europe and he's bought.
He was brought in for that reason.
So we're launching betting. We've launched it in several
territories. That's going to add into the
(24:52):
profitability. So you think about sports rights
as this fulcrum upon which you can really leverage a few, big
Revenue, stream subscription being the Just but advertising
betting Philly into profitability is when those
things come to fruition. You I think you'll see the Zone
reach, a steady state, robust level of profitability and think
it'll be it'll work really well.So building that flywheel of
(25:13):
Revenue to make the average revenue per user scale.
I'm curious with with design they were going to be talking a
lot about fast channels over thelast.
The next couple of days they obviously launched a couple of
Platforms in that space. Do you when you're talking about
the advertising side of things? Are you relating it to just On
the platform directly or more around the fast channels that's
been launched a little, I think mostly around on the platform,
(25:35):
but also fast channels and we get did an Amazon channels deal
on Amazon channels, Etc. So every place with a very few
exceptions, when you access to Zone Sports Programming is on
interactive platforms that are Dai Dai dynamically inserted ads
capable. So you're going to see, I think
a very substantial advertising opportunity.
(25:57):
You've already is pretty substantial.
I don't think. We talk about the actual
numbers, but it's actually really good and growing strong
double digits. Is it as enmity?
Is the advertising Market though, as immature in Europe as
it is, as I said it was earlier or is it actually a bit more
mature that I've made? I know you had a right.
It's the dynamic and sort of adds in Europe are let are
(26:19):
behind where they're on the US, but it is obviously where
they're going to go. The secular Trend towards high
quality video environments, highquality brand Messages Plus
targeting. Stead of just pure reach.
That's the future is not. The future of advertising is the
president of advertising. That's going to take hold
everywhere around the world question coming in from the
Sports Bar corner. Firm statement castle.
Steve. Hello from the corner.
(26:42):
So if price Cuts can't increase that addressable market, and the
focus is on increasing Revenue, through new Services.
Is there a way that you can increase that market through
other means other than price? So new technologies, new service
that will have an increase in Beyond things like advertising
and additional streams. The sports fan.
(27:06):
Affinity of the group of people are sports fans.
Is relatively stable. I would say there's not a huge
amount of growth there and I'm not sure I ever wants to hear
that, but that's what I found tobe true.
So we tried to grow in Europe, with pricing changes, it did not
work. It was very, very stubborn, that
the number of people that are willing to pay so people have
will pay a reasonable price for sports.
I don't think that's, that's, that's a group that's not going
(27:27):
to, you know, I don't think you can see a huge change in In that
in that group and the USA haven't even uncovered yet
because you still have the bundle and there's a lot of
people paying for sports that I'll watch it still in the u.s.
so that that truth has not yet been revealed but it will be you
know what the who the true sports fans are in the US that's
coming. I don't think there's much.
You can do about that. So the so what you have to do is
optimize pricing to gain sure that those who are subscribing,
(27:50):
are paying a fair price for a premium product, you can put,
you can do some freemium things,you can put some things in front
of the pay wall, maybe some of your lesser Sports.
Maybe once in a while, a big sport just to grow the Describe
the awareness of it. I think you'll be hearing from
Tick-Tock today from hurry. She worked with me for, when I
was the CEO. I think Tick Tock is a really
interesting platform. One thing, I did want to thing,
(28:10):
I did when I was a Disney with Disney plus hot star, hot stars
stars, the biggest media companyin India.
They had all the all the cricketright, secluding IPL and BCCI
and ICC and India. Cricket is the religion and it's
like Siri on Italy, everyone watches cricket and it was being
it was there was a platform called hot.
Our, which was the over-the-top app.
(28:31):
And it was always free and was an supported.
Well, we decided to put it behind a pay wall just before I
left his knee and a Disney plus do it.
So behind the paywall, we were able to get, I don't know, 60
million subscribers. Now is five dollars.
A year is not a huge amount of money but it's a huge volume to
subscribe to Cricket. Essentially is what we did.
So there you took a massive audience, put a tiny price in
(28:55):
front of it, and have high volumes and low prices.
You still get a decent. Moderate moderately.
Good. Revenue story.
So maybe around the world, ThereAre Places there things you can
do to titrate the model a littlebit this way.
And that way, but by and large, I think you have sports fans,
you have am out there willing topay and that's what you got.
So we've got a couple of minutesleft.
If you have any questions, throwthem on slow on.
I will go to them in just a second.
(29:17):
You segue beautifully there. Kevin to talk about Tick-Tock
just talk to us through what that what that experience was
like you joined, I think beginning 20 and mid-2020s,
tic-tacs amazing. It's It's one of the most
dynamic platforms I've ever beeninvolved with, and I launched
Disney place and all that. Those are great platforms.
But in terms of hyper personalization, one of the, one
(29:38):
of the things you're talking about in the conference, there's
nothing more hyper personalized than tick, tock tick tocks
algorithm for delivering, the exact video from a choice of
just all user-generated content is not the most high-quality
content, some of its great, someof its not, but it is delivered
in such a fashion through artificial intelligence through
AI engine. That it's just highly
(29:59):
interesting. Those who watch it.
So my for you feed would be muchdifferent than yours within a
few minutes of using the app andit's an incredibly Dynamic
experience. And one where if you're used to
other Western social media, youryour feet is determined by who
affirmatively decide to follow. I follow this.
I like this. These are very strong signals
(30:20):
that you yourself provide to theplatform and it feeds it back to
you Tik. Toks, totally different Tick.
Tock is just sort of measure. Is how you used it senses, how
you use the app, you don't declare anything.
If you follow someone to like something doesn't really matter,
The Tick-Tock algorithm doesn't really depend on that all
depends on these very weak signals, these usage, paradigms
(30:41):
that you have to give you the incredible for you a
personalized feed. I think it's Unique in that
capability. I don't think anyone else around
the world has AI. That is that capable?
And I do think and also the fourth Factor was different full
vertical Screen Video obviously,very immersive, obviously pulls
people in and I think it's It's it's the future of social
(31:01):
entertainments, not really social media as you know,
connecting friends is really, this is really entertaining.
I think, I think that's what it is, but I think there's a future
for Sports on Tick-Tock in a waythey could definitely appeal to
gen Z. I think I just talked about
about with hot star and Disney plus pretty similar.
The, I don't use any reason you couldn't put a stream of a game
(31:22):
at least partial part of it ontoTick-Tock, then maybe put it
behind a paywall, you know, after a fans have seen a bit of
it. I think it's a Way to draw, the
younger people in his way to increase the top of the funnel
massively. I think it's a pretty
interesting concept to use Tick-Tock to get to draw people
in the way we did at Disney withhot star.
When you join Tick-Tock of a wasa pretty, pretty big moment for
(31:44):
the industrial of people took note, obviously with your
background to move to that sort of business people.
We like, okay he comes. It may be some scripture
platforms, so forth, but you obviously time was was less than
12 months there. Can you give us a sense of why I
decided to move on from there? Well, those summer peeps.
You might remember what the heatwe were under from the US, you
know, with the Trump Administration.
It was, it was ugly, it got veryugly and it just was something
(32:08):
that didn't seem right for for me at the time.
So I love the platform, I love the team.
It's just, it's a great group ofpeople and a great technology
and a great business. It's just how it was hard for me
to do it at the time. And by the way, that was same
Dynamics are heating up again, don't know, I don't know what's
going to happen. I hope that I very much hope
that Tick Tock and navigate through this because I think
(32:28):
it's a great platform but I justdon't know what's gonna happen.
So let's go to slide out and seewhat questions have come in from
the audience. We've only got a couple minutes
of all. We will be hard and fast here,
right? Doesn't have an issue with qoe.
Is that quite sure? I should know that term when
streaming Syria is Italy. How did that affection?
How was it fixed? Obviously, there was a lot of
coverage in the European media about that, even got the gut
(32:51):
even politicians started, getting involved in.
Trying to put their words into it.
So, how did that turn out? Well, ideally a couple times.
I mean, with the politicians It to calm the waters.
Look, it's a it's hard. I mean the sports dreaming is
people in the room. I'm sure.
Now is the very most difficult use case in streaming.
Why is that? When Netflix has a show or
(33:12):
movie, but our TV show, they cantake it and run it through a
compression algorithm, 20, 30 40times.
So that the quality per bit rateis really high on Netflix
because the amount of times theycan or Disney plus, I need any
of these non real-time streamingservices, you just get to
compress better for Art's you tocompress one time, you can't get
a huge delay by compressing and compressing you put it.
(33:34):
You run it through a compressionalgorithm once.
Then you put it on the online and everyone's watching the same
thing at the same time. So it exposes all these
bottlenecks on the internet. So you need higher bandwidth for
the for the video quality because you can't compress it as
well. And everyone's watching
simultaneously. It's really hard.
And if you've never done it before in a territory like
Italy, it exposes a whole bunch of of network issues that maybe
(33:56):
people didn't realize before nowthey fixed it and we were, we
Partnered with Telecom Italia and they did a good job of
Disney plus again because it's non real-time and highly
impressed, they did a not as good.
A job with with sports and does own, because it's much more
difficult and it exposed some problems with the network.
It took us a while to with them to fix it.
We've done. So and I think now, you know,
(34:18):
once in a while you get some some small problems, but the big
problems are a whole game was offline for for a good period
time those days are over but we own and am going to quickly
throw to Quick questions that you saw make them fast.
We saw our efforts are notably with it.
Fubo about the watching BET concept and that failed, as
quickly as it came. What's your forecast for this
Tech from here for? I'm sorry for watch to watch him
(34:41):
bet. Sort of format, obviously talked
about the zone and bedding but fibo had their watching back
concept they developed and then shut down within it within a few
months. What's your thoughts on that
model? Look, the concept is good in
Europe. We know that it works.
I think that you have to be fully committed to it.
I think that if you have the streaming rights and you have
the In capability, there are some advantages built-in.
(35:02):
You can't take too much advantage of it because of
certain regulations. But if you have your own one
device and you having this dreamand you're having a betting
capability and you can promote to the extent, you can I think
there's a I think there's a win there.
I can't speak to what food Bo did.
I like David Candler? Quite a bit.
He's a really impressive CEO. I'm sure he did.
What he could and assured made the right call to shut it down.
(35:22):
But all I know is what we did, and I think we're going to do.
I think it's going to work really well.
A design. He's Mystic, I'll call him is to
come for this. Port stay for the entertainment.
He's that line and many times with us when we spoke to me
before final question for you very quickly you know we've
heard comments and there's been reports about your future
shortlisted with Disney and so for what's it what's the future
look like for Kevin Future's bright I'm doing this things I
(35:45):
love to do, I have a new studio that we've created.
For those of you have small kids, you may know Koko melon
and blippi and all the things upabout with moonbug.
Reese Witherspoon's company, whohad some great creative
successors of late and about tencompanies there with Stones help
and I love the future of candle media, which is that that is
called, I love consumer Tech investing and as you know Disney
(36:07):
we'll see what happens. Big thank you to Kevin for
joining us today. Thank you very much Kevin before
you go myself and Nick would just like to thank you for
tuning into this episode of stream time.
If you found the episode insightful, please make sure you
like And subscribe on whichever platform you listen to as a
growing podcast we'd greatly appreciate your support and
sharing or writing a review. Ultimately, what this podcast to
(36:28):
not only entertain you, But also, hopefully help you
navigate the digital Sports landscape.
If you have any feedback on previous episodes or any topics
and speakers you'd like to hear from in the future, please don't
hesitate to reach out. You can find myself and Nick
meet you on LinkedIn or on Twitter.
My Twitter handle is at sports /.
Chris one, Nick can be found at sports pro, Nick.
Of course, if you want to stay fully up-to-date on the sports
(36:50):
business news cycle, please makesure to visit the sports Pro
media website or sign up to one of our several newsletters to
make sure you don't miss anything.
Once again, thank you. And we look forward to you
joining. Join us next week on the stream
Time podcast.
Hello everyone. Welcome back to the next edition
of the sports Pro stream Time Podcast.
My name is Kristin on this community lead here at sports or
media joined as always by our CEO.
Nick Meacham now, Nick almost, put my foot in it during our
Ott. USA Summit.
We were joined by Kevin mayor but because the Bangles are
always on my mind. And in, FL is all always on my
mind. I almost went up to him and
(00:33):
called him Michael Mayer. Who is the number one ranked
tight end going into the draft. Who keeps getting rumored to be
a target of the Cincinnati Bengals.
So, in my head, I was like, I don't think his name's Michael
and I remembered and found out that it was Kevin beforehand.
So that would have been quite the blunder.
(00:53):
Yeah, that would have been quitefunny to see if he would have
even reacted on this. Want to see?
Normally how tall is he sick? Foot four and a half, Michael
Mayer. Think the height difference
might have been the, the big giveaway.
But yeah, that that I mean I've put my foot into it several
times many people over the years.
So I'm just calling someone by the wrong.
First names would be a will be alight, get out for something
(01:17):
like someone like me but yeah. Kevin did you have to have a
chat with Kevin off stage? I did not actually get a chance
to speak to Kevin. You kind of know how it is with
events. So usually when those speakers
come off stage there's a long line of people that they want to
speak to Um, so I unfortunately didn't get a chance just running
events. You kind of go Gotta Go from
stage to stage and keep the showon the road but no, but the one
(01:37):
chance I did have I kind of got scared because I definitely
almost want to call them Michael.
Well you never know, he might have been really interested in
the Bengals future and who they're going to draft.
You know he was by is one of thebiggest buyers of NFL sports
rights through his ESPN day. So no doubt has his fingers on
the pulse of the the upcoming draft.
(01:59):
Absolutely might be Fantasy player Dynasty looking for a
rookie tight end coming in, but you kind of touched on a little
bit, we had the opportunity or more even closer.
You had the opportunity to speakwith Kevin, you know, Kevin's
background formerly at Disney, sort of ESP.
N plus launching that platform is also spend some time.
I believe he's the CEO Tick-Tock.
And then now, the chairman of his own someone who has been
(02:21):
right at the heart of all this Nick.
So, maybe just give us a little bit of insight into your
conversation with Kevin. I mean, Kevin's fascinating guy
and you heard He called me out, as you'll hear in the pot that I
said he had 15 years experience.At Disney turns, it was 25,
which is quite a bit different, so that was good.
Good. Bit of research to kick off the
the session with him but no, he was president of
(02:42):
direct-to-consumer in International Falls and when he
would he'd wrap up and he finished up there at about 20,
20 before checking on those roles at Tick-Tock and then and
then does own and is also, Now set up his own media business
which invest a whole bunch of different creators.
But look, he's effectively was the driving force for To take on
the streaming Revolution and thedirected consumer Revolution.
(03:05):
I don't know if you would call me is right at that.
Bob, iger's right-hand, man, or offsider or counterpart, but
they were very watch working together to drive that, that
Revolution forward. So few people have been in a
more important or influential position than Kevin has in
driving through this. This sort of change, we're
seeing across this. The streaming streaming World,
(03:27):
actually quite funny, a child sitting next to him waiting for
our to start and Louis Civil War.
So who is the president? And I think chairman of Warner
Brothers Discovery Sports was onstage and when he was talking
about bundling, basically, Kevinwas up asked me that question
because I have a completely different opinion to what Lewis
(03:48):
has just said, so make sure you ask me that.
So I had to throw their questionin added pretty quickly because
he's question. His answer was, I think was
Basics and to do with Louis talking about the role of sports
playing as a A either complimentto the entertainment space,
where he had a different lens, which you'll hear about it in
the, in the, in the conversation, just shortly.
But look, really, what would youcall?
It? Really direct really intelligent
(04:10):
guy. Not, not afraid to sort of not
share opinions. Obviously his role as chairman
of disown finished up as recently as a week before the
event. So kind of had to throw away.
A lot of my notes not because I wasn't going to talk about the
Zone which we do, but also I so had to shift the focus back to
more of a balanced view around the industry and his experience.
Around Disney, which is actuallykind of what I wanted to do in
(04:32):
the first place. So it kind of worked out pretty
well. All things considered.
Well, I think just the job titles alone, the streaming Wars
and everything. It's there.
This is absolutely an episode, she don't want to listen into.
So I hope everybody enjoys it great to be back.
(04:56):
Onstage already to goes two out of three.
Perks of being a CEO, an event like this.
But Kevin we've got lots to cover and obviously you've been
15 years at Disney, culminating in your role as chairman of
direct to Consumer and international and oversaw.
This t, plus an ESPN pluses development and strategy being
rolled out so as good a person as any I think to be talking
(05:19):
through things. But just tell me before we jump
into it. What's the sea change been like
for you to shift away from that the Disney Juggernaut into the
and tell us what through the different things you been up to
the last Couple of years. Well, I was at Disney freshly 25
years so there you go. It is already.
It was fun to be, there is a bigplatform we are in all sorts of
(05:41):
different businesses Jenner, tainment writ, large Sports
movies streaming channels, themeparks consumer products.
It's great company with a broad remit and people love it.
It's all the brands that really matter in entertainment are kind
of housed at Disney so that was that was a fun, fun ride.
And sometime it tick, tock running Tick, Tock around the
(06:02):
world. That was an interesting
Endeavor, which I'm numbered be may talk a little bit about
today. And now I'm doing a couple
things, but the main thing I'm doing is I've built a new studio
called candle media with Blackstone, private Equity been
doing that. That's been a lot of fun, and I
was chairman of does own until last week for a couple years and
that was great. And that's what the main subject
of what we'll be talking about, obviously.
(06:24):
And I'm also investing in consumer technology.
So it's, it's fun to be outside of a big company.
Any he thought you were busy, hegot Kevin 7 K, 1 up to you
already. So Kevin, let's talk about a few
things, fix it because Louis andC were talking about it.
Then I want to talk about things, I will be looking at the
sports dreaming landscape in sports role in sports.
(06:46):
What are your thoughts on the concept of the bundle?
Because everyone talks about a constantly about that's what
consumers one and we've had themflowed over the last couple of
years. Just what's your take on how
that plays out, you've seen thatfirsthand with both Disney ESPN
and his own be more Sports. So what do you think?
Well, it depends on what you mean by the bundle.
The bundle that you're talking about is the big pay TV bundle
(07:06):
in the u.s. that has entertainment.
It has Sports is a huge price. There's hundreds of channels,
and I think that is on its on a massive declining trajectory.
And there's the reason for that,is that many consumers don't
feel well served by the bundle, if you're a sports fan, and
you're paying a lot of money forthat bundle.
Most sports fans are also entertainment consumers, so
abundant makes a lot of sense for sports fans, you know,
(07:29):
Sports. Being as expensive as they are.
That has prompted as made the price.
Go, go go very high. They're one of the reasons, I
think probably the main reason the bundle is in trouble is
because of sports and many people are not sports fans.
And if you ask everyone to pay ahuge amount of money for sports
are not watching it, I think that they cause us some causes
(07:50):
turn. And I think that's what you've
seen in the US and Europe has been entirely different because
people have paid for sports. Even those not streaming all the
time, even though it's a could, Satellite platform or cable
platform people that sports fans, have paid separately for
sports and entertainment. They've got business model has
worked very well and it's prettystable again as much different
here. And I think, forcing people in a
(08:12):
forced hard bundle to buy sportsthat they don't watch as
expensive as that is. I think has already proven to be
a huge mistake and I think it will not.
I mean, it's not a good idea. Now, to force people that are
buying entertainment services toalso pay for sports.
It's just too expensive. So, looking back at What you set
up a notch over sore at Disney with the Disney plus, an ESPN
(08:34):
plus strategies, pretty much every platform in this industry
has changed or pivoted at or evolved a strategy of the last
few years. What you said up to what it is?
Now, how much is that change? What have you seen from the
outside in? I guess, and there's in the
entertainment platforms. Well, I think streaming has
become the norm. If you're watching entertainment
programming, there's not a wholelot of reason to watch it on a
(08:56):
Time basis. So that, you know, watching a
show Wednesday at 9 p.m. it doesn't make any sense.
There's no need for it. There's no unlike Sports, which
are obviously watched, when theyoccur entertainment is much
different. So, streaming on-demand,
programming has been the plate. The way to people like to like
to watch that entertainment programming.
Think it makes a ton of sense. I think streaming services are,
(09:20):
you know, they offer high quality and good and good value
for the money. Even the more expensive ones HBO
Max, you know, Louise's from Warner Brothers, Discovery, it's
great value. They have really we premium
programming and even though it's$15 a month, I think it's still
good value. When we launched Disney plus, we
launched it at 699 because we wanted to have a very
democratized experience. People families around the
(09:42):
world, love Disney and Marvel, and Star Wars and Pixar.
And we didn't want people to have to make a choice financial
aid, either take it or not. Take it, you wanted people to
think, how could I not subscribeto Disney plus?
It's such a great deal. Now, there's a lot of pricing
power to be in Disney plus, I going forward and I think
they'll take advantage of that. Um, but you know, the streaming
landscape has gone sort of as, as I expected personally.
(10:05):
Netflix is a juggernaut, I thinkit's unassailable.
The no one's going to beat Netflix said, you know, sort of
the number of subscribers that have around the world and the
number and the revenue and ultimately, the profitability
that they can pull in, I think Disney plus is, always, was
always intended to be a, you know, a just for the fans of
those Brands. So I was not going to be quite
as well, penetrated, as Netflix,and never was intended to be.
(10:26):
I think Warner Brothers, you know, HBO Max is great.
I think, you know, when you get to Amazon Prime and to Apple TV,
plus they're the degree of financial wherewithal, the
companies that are that are backing those, those support
streaming services, really? Really, they're going to be
around for a long time, Amazon and sports, apple and sports to.
I think when you get to the Lester streaming services, I
(10:47):
think you'll see some consolidation happen, but it's
really taking over the world, and I think it's the
appropriate. The appropriate way that you
should watch this programme justquickly on Apple.
Obviously, one of the biggest moves they've made is the Less
deal quite a significant deal and and in terms of the scope of
the being Global, what was your take on seeing that deal?
Was there something that surprised you or move?
(11:08):
They needed to make if they wanted to become a player in the
sports sports world, it's a bit surprising, the pater that they
paid a lot for those rights muchhigher, much, massive increase.
If your Apple you have aspirations to happen to, you
know, improve your brand. I see that the whole streaming
service for Apple both entertainment and Sports is
(11:30):
really about improving the Applebrand and I think you'll see
they'll make moves at a very premium level because that's the
there's a very premium nature tothe Apple brand.
So I think that a lot of that isa marketing expense for them.
A lot of it. I don't think, I don't think
they plan to have a huge contribution directly from the
economics of the streaming services especially in the
context of Apple which is two point four trillion dollar
(11:52):
company. But I do think Sports is a good
brand builder for them. I don't think they'll go crazy
and buy all sorts of sports, butopportunistically, they A niche
that can really bolster their brand, they'll be, they'll be
participating. I think.
So, you just mentioned the design earlier about you
finished up as chairman with them.
After two years with the companyand over seem pretty dramatic
change. Over those two years, you
(12:13):
actually took over from your forthe former colleague, John
Skipper, who was chairman up to that point, talk about that
Journey. What what was it?
That sort of, I guess we're whathave you seen change or want to
have you driven to change that business over the last couple of
years? Because it doesn't, it might
from Ireland's. It looks quite different.
What I did a couple years ago. Well I think we made a fair
amount of changes like I'm John Skipper, former ESPN, chairman
(12:35):
is a great friend of mine, awesome guy.
And he had a vision Ford has owned, mine was a bit different.
I think does own the center of gravity of design is better
served by being in Europe. And in some parts of Asia, Japan
is a pretty big market for them.There was a global nature to the
does own business. When I first came on board,
which I thought was a bit of a bit of a misdirection, because
(12:58):
as we know that there aren't that many Global Sports.
I think has been mentioned on the last panel or I think you
mentioned that actually I did indeed think the NBA is a global
sport. I think EPL football is a truly
Global sport. Most of the other side football
leagues in Europe aren't really that Global.
But EPL has carved out a really substantial position and look at
(13:18):
the NFL we just be it does own just didn't NFL deal to take the
NFL Sunday Ticket package outside the US.
It's not really a global sport. It really is Center to center of
that is definitely the US and Canada is a big fan of southern
Mexico. You In Mexico being a
multi-sport country, which it is.
But I thought I felt that to be a real premium service to get
high are posing of the the revenue per user on a
(13:40):
subscription basis. You really had to have the
sports that matter in the local markets and trying to come to
the u.s. and compete against theESPN and TNT and apple and
Amazon and all those guys that seemed like a very difficult
difficult thing to do. But going into markets, where
there's a traditional media competitor like a sky, or Miles.
(14:00):
We thought that was something that we could actually take a
whole lot of. So we went around it.
We went around the, the countries of Europe and we did a
pretty good job. We had all the Syria rights in
Italy and Syria as a religion inItaly.
And we've done a really good jobthere.
I think we've gotten half the LaLiga rights in Spain.
We've gotten Bundesliga rights and Champions League rights in
(14:22):
Germany. So, those three big countries in
Europe. We actually have I think we're
the premier provider of sports, try to get the EP Well, in in in
the UK I think my friend Louise here, beat me out for that one.
So that was a bit of a disappointment but good on him.
That was a good move for those guys.
And we have some things. A smattering things that we have
(14:42):
around the world boxing and Combat Sports, being the major
one. But also women's football.
We have the champions league forrumors boards globally, and La
Liga, women's soccer globally also.
And I think we're becoming a bitof a home for for women's sports
around the world which I think that's a good position for
design. The NFL game past year, I think
is a really interesting one and maybe doesn't get that much
(15:04):
coverage over in the u.s. So I'm not sure how much it did
because I'm based in the UK, but10-year deal before.
Purported figures are pretty significant.
I think they're jumping around 100 million a year is depending
on who you ask, but I'm just curious, the dynamic there is
completely different. You're talking about taking a
direct-to-consumer OTT platform into and that, and that sort of
(15:25):
relationship, the NFL has, and they're giving over the rights
to that too. Build effectively from what I
understand that the platform effectively within the does own
ecosystem and on that Tech stack.
So it's quite a huge shift for the NFL to do that.
And to take that step away from that direct-to-consumer
relationship, it's not uncommon.We're seeing moves like the WWE
and the peacock deals. An example of people, there's a
(15:48):
price to pay or a willingness toshut up an Ott platform.
If you've if either the economics, make more sense.
But just what's your take on that move, its, it took many by
surprise that make that sort of Commitment.
But equally gives you a huge Runway 24 design to the build
and make a proof of concept thatsupposed to other sports
properties, but I think it's difficult for any single sport
(16:11):
to create his own direct to consumer service.
There's a bear is in sports for sports fans of big value and
aggregation you want to go to one place.
You want to see all the favoritesports that you have really
hard. I think for the WWE's not really
a sport but call it a sport to have its own direct to consumer
services. That's not the critical mass
isn't there. In the NFL outside the outside
the US how many its own direct to consumer service.
(16:33):
Again I think is subscale and doesn't certain is hard to find
you've to Market you to find those NFL fans where they are
and to Market to them and have to build bring in subscribers.
Just to an NFL offering really difficult outside the US, much
easier as part of his own, wherewe can cross, you know, Market
to football fans and they'll soccer fans, we have to
differentiate now, soccer fans versus versus NFL fans and and
(16:56):
we have already have a top of the funnel with sports fans that
we have engaged. We have the As I think it's,
it'll be an easier sell for us than us, than they have been
doing stand alone. So, I think it makes a lot of
sense to have aggregation with in sports, where I have
exceptions, taking the aggregation into Entertainment.
Also, I think that bundle is a tough one.
So look, we my relationship withthe NFL, goes way way back
(17:18):
because of my time at Disney andESPN, it was, I think a good
deal for both of us. I'm back, I can't comment on the
on the details of it because youhave the term correct.
It's 10 years and and I think it'll be A fascinating adventure
for the next 10 years. I think we'll do really well and
I think that the NFL's interest in growing the fandom for their
Sports outside. The US is going to be well
(17:40):
served by being part of design. I think it's important to do a
great job, the fight Sports partof design.
I wanted to take a step back on that one because the big move
there was that fight sport has historically been pay-per-view
is that the economic model behind it does own came in and
said, well we're going to offer it for a subscription Come in
and out. That's that's the model very
(18:02):
simple. You can pee pee in a typical
subscription model and drop at any time last I think year two
years ago maybe pretty quickly. After you've been involved you
change that that economic model just talk us through that that
decision and why it didn't work as just this the Standalone
subscription monthly monthly model.
Sure. The problem is when I launched
(18:24):
ESPN plus really it was just Combat Sports.
For the most part, you have see both the fight nights and the
paper. Unite's we got we licensed
amateur boxing, top-ranked. Boxing was on there too.
And we had a whole been thousands of other of other
programs, mostly college sports and a few.
Highly few games from the from baseball by and large those that
(18:45):
it was Combat Sports and we did something really stupid.
I did. It was my fault.
We had a really Premier Pacquiaofight on Emmy.
ESPN plus meal. Should be again, a Disney, we
believe in democratization of these things.
So we went in a very low price for Nine a month.
Well, we had and we also had a one, a 30-day trial period back
then. So we had is something like
(19:06):
700,000 people come watch the Pacquiao fight.
Most of them are free to do it for free because we had this,
this trial period. And then, of course, on
subscribe to the never never became paying subscribers and
even those that did pay paid for99 and they left.
So we didn't make the kind of money.
We should have that was a pay-per-view quality event.
And so I kind of regroup and thought about that.
(19:26):
And so that was kind of not a smart move, we left a lot of
money on the table. Table, and we left a lot of
subscribers on the table. So what we did there, we decided
to make these Pay-Per-View fights pay-per-view, quality
fights a little more expensive than their Trisha had been.
We added $20 to them, if you were not an ESPN plus
subscriber, and if you bought that, you become an annual
subscriber to is pain. Plus, if you got and that works
very, very well. So, we had UFC fights me a
(19:47):
top-ranked fights, and when theycame in, we would get hundreds
of thousands of people to pay ifthey were already an ESPN plus
subscriber, they pay a normal actually slightly discounted
Pay-Per-View price. But if they weren't, they became
annual subscribe. And it's great to have annual
subscribers because you'll have the monthly turn and all that
stuff. So we turned it on his head and
instead of making those paper, you B fights financial disaster,
(20:09):
we actually made it really work well, so that that concept
really worked when I got to the Zone, I noted that they were
just doing subscriptions. The same thing.
People would come in by a month and leave so they get a even
though the subscription price isrelatively pricey like $20 a
month, you get people for a month and they get basically a
pay-per-view for $20, and that'sit's worth more than that.
There's it's a giveaway. So, what we decided to do is
(20:32):
update our platforms capabilities, focus on
pay-per-view and we still have subscriptions, but if you have a
pay-per-view quality fight, yet paper, paper paper, you quality
price. And I think that made a lot of
sense for for design and we got in a lot of subscribers because
of that, be gay people, three months of subscription when they
came in for a, for a pay-per-view.
So similarly, did ESPN plus worked really well.
(20:55):
It had to be done so back on design, a little bit further,
the They published their accounts of their finances.
They big numbers and, and broadcast those across the
industry. We cover them quite a bit of
detail. The counts numbers were for the
end of 21. I think, if I remember
correctly, which is just coming out the other side of the
pandemic, so things were changing again.
(21:16):
But to little bit over two billion dollar Revenue, little
bit of a two billion dollar lossfor that those accounts now.
Fast forward to this year or the, the so-called the
commentary or the communication is We are going to be profitable
from 2024 onwards and in fact, the end of this year, they are
going to be becoming profitable for the quarter.
(21:38):
Obviously your what, what how doyou make that?
That move? That's a bit.
How do you get there? How does, how does someone like
design? Get that?
Because that is a big hurdle to overcome and it just doesn't
grow on trees. In the market.
Subscription Market is, is competitive.
How viable do you think that is to be able to be achieved in
such a short window of time? Well, the 2021 it, As a lot of
(22:01):
that 2 over 2 billion dollar loss was because of re
recapitalized some loans that the parent company and made to
it. And a lot of really more like
1.2 1.3 of operating losses and those are tough year 2021, we
bought those new rides. We were just growing our
subscriber base and I was that was the peak loss of year for
Ford has owned, a big loss. I mean, as a peak, even as a
(22:21):
peak loss, it's not nothing to sneeze at.
But this than 2022, we increase prices across the board and the
countries and Italy Spain. In Germany where we had those
Premier Football rides. We had underpriced it for a, for
a the first year of our that we had those rights.
Also my call frankly. I thought that maybe there would
be more polite, price elasticity.
Then there was in Europe and people in Europe, are used to
(22:44):
paying a big premium for sports from Sky.
Whoever else the provider, was in the 30 Euro range and we were
priced at about 15 to 20 euros, thinking that we could expand
this subscriber Universe didn't work, didn't happen.
So we went up for the to the premium price and we didn't lose
money supply. I lost a couple, but it was
really the right, the right moveto increase that price into the
(23:04):
premium realm, so that bumped our revenues dramatically.
So you'll see a much bigger if we did nothing else, the
revenues would move from 2 billion to, you know, closer to
three and a half or four billion, the next year's.
That's it. We're going to see something
like that, this year, but we also had we're taking advantage
of two other really substantial opportunities.
One is advertising. I don't think that people talked
enough about the advertising capabilities in sports.
(23:27):
First of all, it's the last place you can aggregate a really
large audience. Audience in this world.
You know maybe awards ceremony is like we had the Oscars a
couple nights ago from that's right.
I didn't look at the ratings butthose have been declining quite
dramatically, Sports it held up pretty well.
So sports are the places where you can.
You can actually aggravate a bigaudience and the other thing
does own is streamed. So all of our audience have, you
(23:48):
know, accesses our programming on platforms that can support
targeted advertising. You can take, you can
dynamically insert ads that are targeted to different subgroups
of the audience that are watching that Chris has this,
the cost of the advertising building increases the value of
the advertising, and that is something that's happening
across the entertainment ecosystem, these over-the-top
platforms both an entertainment or sports, that offer the
(24:10):
ability to have a very high quality brand and message and
high-quality video environment. But do it on a targeted basis
that's taking over the world. So, linear TV, that does not
have any targeting. Is really collapsing and just
the target ability of these Ott platforms.
That's really big. So advertising is growing quite
substantially and profitably andmost.
Sizing Falls right to the bottomline.
(24:31):
So that's been a big Vector of opportunity and the other one is
betting, obviously are the CEO shy.
Segev of does own was the CEO ofentertain?
The biggest? I think, I think it's the
biggest Excel. Yeah.
Betting operation in Europe and he's bought.
He was brought in for that reason.
So we're launching betting. We've launched it in several
territories. That's going to add into the
(24:52):
profitability. So you think about sports rights
as this fulcrum upon which you can really leverage a few, big
Revenue, stream subscription being the Just but advertising
betting Philly into profitability is when those
things come to fruition. You I think you'll see the Zone
reach, a steady state, robust level of profitability and think
it'll be it'll work really well.So building that flywheel of
(25:13):
Revenue to make the average revenue per user scale.
I'm curious with with design they were going to be talking a
lot about fast channels over thelast.
The next couple of days they obviously launched a couple of
Platforms in that space. Do you when you're talking about
the advertising side of things? Are you relating it to just On
the platform directly or more around the fast channels that's
been launched a little, I think mostly around on the platform,
(25:35):
but also fast channels and we get did an Amazon channels deal
on Amazon channels, Etc. So every place with a very few
exceptions, when you access to Zone Sports Programming is on
interactive platforms that are Dai Dai dynamically inserted ads
capable. So you're going to see, I think
a very substantial advertising opportunity.
(25:57):
You've already is pretty substantial.
I don't think. We talk about the actual
numbers, but it's actually really good and growing strong
double digits. Is it as enmity?
Is the advertising Market though, as immature in Europe as
it is, as I said it was earlier or is it actually a bit more
mature that I've made? I know you had a right.
It's the dynamic and sort of adds in Europe are let are
(26:19):
behind where they're on the US, but it is obviously where
they're going to go. The secular Trend towards high
quality video environments, highquality brand Messages Plus
targeting. Stead of just pure reach.
That's the future is not. The future of advertising is the
president of advertising. That's going to take hold
everywhere around the world question coming in from the
Sports Bar corner. Firm statement castle.
Steve. Hello from the corner.
(26:42):
So if price Cuts can't increase that addressable market, and the
focus is on increasing Revenue, through new Services.
Is there a way that you can increase that market through
other means other than price? So new technologies, new service
that will have an increase in Beyond things like advertising
and additional streams. The sports fan.
(27:06):
Affinity of the group of people are sports fans.
Is relatively stable. I would say there's not a huge
amount of growth there and I'm not sure I ever wants to hear
that, but that's what I found tobe true.
So we tried to grow in Europe, with pricing changes, it did not
work. It was very, very stubborn, that
the number of people that are willing to pay so people have
will pay a reasonable price for sports.
I don't think that's, that's, that's a group that's not going
(27:27):
to, you know, I don't think you can see a huge change in In that
in that group and the USA haven't even uncovered yet
because you still have the bundle and there's a lot of
people paying for sports that I'll watch it still in the u.s.
so that that truth has not yet been revealed but it will be you
know what the who the true sports fans are in the US that's
coming. I don't think there's much.
You can do about that. So the so what you have to do is
optimize pricing to gain sure that those who are subscribing,
(27:50):
are paying a fair price for a premium product, you can put,
you can do some freemium things,you can put some things in front
of the pay wall, maybe some of your lesser Sports.
Maybe once in a while, a big sport just to grow the Describe
the awareness of it. I think you'll be hearing from
Tick-Tock today from hurry. She worked with me for, when I
was the CEO. I think Tick Tock is a really
interesting platform. One thing, I did want to thing,
(28:10):
I did when I was a Disney with Disney plus hot star, hot stars
stars, the biggest media companyin India.
They had all the all the cricketright, secluding IPL and BCCI
and ICC and India. Cricket is the religion and it's
like Siri on Italy, everyone watches cricket and it was being
it was there was a platform called hot.
Our, which was the over-the-top app.
(28:31):
And it was always free and was an supported.
Well, we decided to put it behind a pay wall just before I
left his knee and a Disney plus do it.
So behind the paywall, we were able to get, I don't know, 60
million subscribers. Now is five dollars.
A year is not a huge amount of money but it's a huge volume to
subscribe to Cricket. Essentially is what we did.
So there you took a massive audience, put a tiny price in
(28:55):
front of it, and have high volumes and low prices.
You still get a decent. Moderate moderately.
Good. Revenue story.
So maybe around the world, ThereAre Places there things you can
do to titrate the model a littlebit this way.
And that way, but by and large, I think you have sports fans,
you have am out there willing topay and that's what you got.
So we've got a couple of minutesleft.
If you have any questions, throwthem on slow on.
I will go to them in just a second.
(29:17):
You segue beautifully there. Kevin to talk about Tick-Tock
just talk to us through what that what that experience was
like you joined, I think beginning 20 and mid-2020s,
tic-tacs amazing. It's It's one of the most
dynamic platforms I've ever beeninvolved with, and I launched
Disney place and all that. Those are great platforms.
But in terms of hyper personalization, one of the, one
(29:38):
of the things you're talking about in the conference, there's
nothing more hyper personalized than tick, tock tick tocks
algorithm for delivering, the exact video from a choice of
just all user-generated content is not the most high-quality
content, some of its great, someof its not, but it is delivered
in such a fashion through artificial intelligence through
AI engine. That it's just highly
(29:59):
interesting. Those who watch it.
So my for you feed would be muchdifferent than yours within a
few minutes of using the app andit's an incredibly Dynamic
experience. And one where if you're used to
other Western social media, youryour feet is determined by who
affirmatively decide to follow. I follow this.
I like this. These are very strong signals
(30:20):
that you yourself provide to theplatform and it feeds it back to
you Tik. Toks, totally different Tick.
Tock is just sort of measure. Is how you used it senses, how
you use the app, you don't declare anything.
If you follow someone to like something doesn't really matter,
The Tick-Tock algorithm doesn't really depend on that all
depends on these very weak signals, these usage, paradigms
(30:41):
that you have to give you the incredible for you a
personalized feed. I think it's Unique in that
capability. I don't think anyone else around
the world has AI. That is that capable?
And I do think and also the fourth Factor was different full
vertical Screen Video obviously,very immersive, obviously pulls
people in and I think it's It's it's the future of social
(31:01):
entertainments, not really social media as you know,
connecting friends is really, this is really entertaining.
I think, I think that's what it is, but I think there's a future
for Sports on Tick-Tock in a waythey could definitely appeal to
gen Z. I think I just talked about
about with hot star and Disney plus pretty similar.
The, I don't use any reason you couldn't put a stream of a game
(31:22):
at least partial part of it ontoTick-Tock, then maybe put it
behind a paywall, you know, after a fans have seen a bit of
it. I think it's a Way to draw, the
younger people in his way to increase the top of the funnel
massively. I think it's a pretty
interesting concept to use Tick-Tock to get to draw people
in the way we did at Disney withhot star.
When you join Tick-Tock of a wasa pretty, pretty big moment for
(31:44):
the industrial of people took note, obviously with your
background to move to that sort of business people.
We like, okay he comes. It may be some scripture
platforms, so forth, but you obviously time was was less than
12 months there. Can you give us a sense of why I
decided to move on from there? Well, those summer peeps.
You might remember what the heatwe were under from the US, you
know, with the Trump Administration.
It was, it was ugly, it got veryugly and it just was something
(32:08):
that didn't seem right for for me at the time.
So I love the platform, I love the team.
It's just, it's a great group ofpeople and a great technology
and a great business. It's just how it was hard for me
to do it at the time. And by the way, that was same
Dynamics are heating up again, don't know, I don't know what's
going to happen. I hope that I very much hope
that Tick Tock and navigate through this because I think
(32:28):
it's a great platform but I justdon't know what's gonna happen.
So let's go to slide out and seewhat questions have come in from
the audience. We've only got a couple minutes
of all. We will be hard and fast here,
right? Doesn't have an issue with qoe.
Is that quite sure? I should know that term when
streaming Syria is Italy. How did that affection?
How was it fixed? Obviously, there was a lot of
coverage in the European media about that, even got the gut
(32:51):
even politicians started, getting involved in.
Trying to put their words into it.
So, how did that turn out? Well, ideally a couple times.
I mean, with the politicians It to calm the waters.
Look, it's a it's hard. I mean the sports dreaming is
people in the room. I'm sure.
Now is the very most difficult use case in streaming.
Why is that? When Netflix has a show or
(33:12):
movie, but our TV show, they cantake it and run it through a
compression algorithm, 20, 30 40times.
So that the quality per bit rateis really high on Netflix
because the amount of times theycan or Disney plus, I need any
of these non real-time streamingservices, you just get to
compress better for Art's you tocompress one time, you can't get
a huge delay by compressing and compressing you put it.
(33:34):
You run it through a compressionalgorithm once.
Then you put it on the online and everyone's watching the same
thing at the same time. So it exposes all these
bottlenecks on the internet. So you need higher bandwidth for
the for the video quality because you can't compress it as
well. And everyone's watching
simultaneously. It's really hard.
And if you've never done it before in a territory like
Italy, it exposes a whole bunch of of network issues that maybe
(33:56):
people didn't realize before nowthey fixed it and we were, we
Partnered with Telecom Italia and they did a good job of
Disney plus again because it's non real-time and highly
impressed, they did a not as good.
A job with with sports and does own, because it's much more
difficult and it exposed some problems with the network.
It took us a while to with them to fix it.
We've done. So and I think now, you know,
(34:18):
once in a while you get some some small problems, but the big
problems are a whole game was offline for for a good period
time those days are over but we own and am going to quickly
throw to Quick questions that you saw make them fast.
We saw our efforts are notably with it.
Fubo about the watching BET concept and that failed, as
quickly as it came. What's your forecast for this
Tech from here for? I'm sorry for watch to watch him
(34:41):
bet. Sort of format, obviously talked
about the zone and bedding but fibo had their watching back
concept they developed and then shut down within it within a few
months. What's your thoughts on that
model? Look, the concept is good in
Europe. We know that it works.
I think that you have to be fully committed to it.
I think that if you have the streaming rights and you have
the In capability, there are some advantages built-in.
(35:02):
You can't take too much advantage of it because of
certain regulations. But if you have your own one
device and you having this dreamand you're having a betting
capability and you can promote to the extent, you can I think
there's a I think there's a win there.
I can't speak to what food Bo did.
I like David Candler? Quite a bit.
He's a really impressive CEO. I'm sure he did.
What he could and assured made the right call to shut it down.
(35:22):
But all I know is what we did, and I think we're going to do.
I think it's going to work really well.
A design. He's Mystic, I'll call him is to
come for this. Port stay for the entertainment.
He's that line and many times with us when we spoke to me
before final question for you very quickly you know we've
heard comments and there's been reports about your future
shortlisted with Disney and so for what's it what's the future
look like for Kevin Future's bright I'm doing this things I
(35:45):
love to do, I have a new studio that we've created.
For those of you have small kids, you may know Koko melon
and blippi and all the things upabout with moonbug.
Reese Witherspoon's company, whohad some great creative
successors of late and about tencompanies there with Stones help
and I love the future of candle media, which is that that is
called, I love consumer Tech investing and as you know Disney
(36:07):
we'll see what happens. Big thank you to Kevin for
joining us today. Thank you very much Kevin before
you go myself and Nick would just like to thank you for
tuning into this episode of stream time.
If you found the episode insightful, please make sure you
like And subscribe on whichever platform you listen to as a
growing podcast we'd greatly appreciate your support and
sharing or writing a review. Ultimately, what this podcast to
(36:28):
not only entertain you, But also, hopefully help you
navigate the digital Sports landscape.
If you have any feedback on previous episodes or any topics
and speakers you'd like to hear from in the future, please don't
hesitate to reach out. You can find myself and Nick
meet you on LinkedIn or on Twitter.
My Twitter handle is at sports /.
Chris one, Nick can be found at sports pro, Nick.
Of course, if you want to stay fully up-to-date on the sports
(36:50):
business news cycle, please makesure to visit the sports Pro
media website or sign up to one of our several newsletters to
make sure you don't miss anything.
Once again, thank you. And we look forward to you
joining. Join us next week on the stream
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