DAZN’s big Canadian deal: Digital space is a natural fit for soccer By Steven Sandor Posted on May 25, 2018 1 0 664 Share on Facebook Share on Twitter On Thursday, media upstart DAZN announced that not only had it secured the Canadian digital rights to broadcast the entirety of the Champions and Europa Leagues over the next three seasons, it had acquired blanket rights to the tournaments. DAZN said it isn’t interested in sub-licensing those rights; so, unless the digital broadcaster has a change of heart, that means Saturday’s CL final between Liverpool and Real Madrid will be the last time you’ll see soccer at that level on cable TV for a while. Maybe a long, long while. For those who are already cord-cutting and streaming as a daily practise, this is not exceptionally noteworthy. DAZN charges $20/month, about the price of a nice lunch. It’s not what you would call expensive. (What could be expensive is, if, down the road, the various soccer leagues end up on different digital platforms, each charging their nominal fees, which then add up to a significant bill.) But, for those who are still cable- or satellite-first viewers, there will be much gnashing of teeth. Count this as a certainty; that in August, during the first CL broadcasts of the new season, Twitter will be filled with complaints — as viewers will question TSN and Sportsnet about why the hell they’re not carrying the games. This, for the neutral, could make for more entertaining viewing than Canadian soccer fans complaining about curling running long, or having to share soccer stadiums with football teams. More seriously, though, is that the DAZN deal simply reflects the reality — that, in Canada, soccer is a sport better suited for digital streams than for traditional broadcasters. In the traditional media, no matter if it’s print, magazine or broadcast, we are searching for ways to supplant ad revenues. With the rise of online shopping, many brick-and-mortar retailers are struggling to keep up — and it’s those brick-and-mortar shops who are cutting back their ad budgets or going out of business altogether. So, that’s put further pressure on an already fractured ad market. As well, some major sponsors have put cash into naming stadiums or putting their logos on jerseys. While this is great for the clubs and leagues, it’s a double-edged sword for traditional broadcasters. Not only do these sponsors get what amounts to free commercial space on TV, they have borrowed from their traditional ad budgets to make these stadium and shirt deals. Broadcasters (and other media, too) lose out twice. Traditional TV broadcasters need ad revenue. They also need space in which to sell it. They need lots of commercial breaks in prime time. Champions League soccer offers neither. Games are, save for the final, midweek, early-afternoon programming in Canada. And, with no stops in games save for halftime, there isn’t a lot of inventory to sell. It’s ironic; as ad revenues fall, broadcaster are under pressure to sell more, more, more. They are squeezing blood from stones. Because they aren’t as flexible as digital broadcasters, their solution is to scramble and try to find more stones. Really, the only way to make it work is to monetize the audience. Subscriptions. Memberships. As well, the advertisers who are left in the game absolutely LOVE paid memberships. They show them that there is a captive audience, with disposable income to burn. If they spend $20 to watch Champions League, they’re more likely to buy shoes than the person watching a broadcast for free. The digital space offers a simple proposition; pay a monthly or annual fee — and stream what you’d like. Games are archived so you can catch up later or watch that great sequence over and over again. Soccer has long been a loss-leader audience builder for traditional broadcasters in Canada. The ratings, save for a World Cup or a CL final or that magical 2016 MLS Eastern Conference Final between TFC and Montreal, are a fraction of what hockey or the Blue Jays or the CFL or curling pulls in. The trade-off was that soccer brings in a younger audience with disposable income to burn. But, in the case of CL, those weekday afternoon kick offs put a ceiling on how much you could build said audience. With rights costs being what they are — and a ceiling on what traditional broadcasters can do with the property — the digital world was the most natural fit. In uncertain times, media has traditionally reverted to the tried and true, rather than take chances on loss leaders. So, as revenues dwindle, the natural choices for traditional broadcasters are to double down on the larger draws — hockey, anyone? It is worth noting that British broadcasters paid the Premier League close to 4.5 billion pounds to carry matches from 2019-2022. It was a whopping sum, for sure, but less than the more than 5 billion domestic carriers paid for rights from 2016-19. To be fair, that might not be due to waning interest in the Premier League, but the fact that more broadcast money is being tossed at other leagues. For example, Sky and Eurosport paid 4.6 billion euros in 2016 for the rights to carry the Bundesliga for four seasons. That was nearly double what Bundesliga rights had been worth in the previous contract cycle. So, with that much money on offer, broadcasters have to find bangs for their bucks. And, that means you have to find new ways to monetize your audience. Ad revenues just don’t cut it anymore. So, you find ways to turn your free viewers into paid subscribers. You find new ways for sponsors to make their brands visible to the public. You create membership. And, right now, digital broadcasting is that space, unless Sportsnet and TSN figure out ways to charge people per game that they watch.