John Skipper was interviewed by Jemele Hill at the Web Summit in Lisbon on Tuesday, and as much fun as it would’ve been if they broke down their exits from ESPN from the last year and got super candid about it, the talk essentially focused on the global streaming entity DAZN that Skipper is trying to build.
They touched on the mega-deal Skipper just closed with Canelo Alvarez amongst other topics. Three sections I thought were interesting were when Skipper talked about ratings, live rights procurement, and ad deliveries.
We have some advantages. We have the advantage of focus. This is the only thing we’re focused on. We buy rights. We put them on the streaming platform. We focus on customer experience and we can do that’s advantageous because we know what people are watching. When I was at ESPN, we don’t know anything about you.
If you’re watching on cable or broadcast television, it is so anachronistic that it still relies upon Nielsen ratings, which are done on a sampling technology so that it infers that X number of people watched. They don’t really know how many people watched, and they don’t have any idea who in the house is watching. They have no idea, really. They know when the television set was cut on. They know when it was cut off. And maybe someone’s watching, or maybe they’re in the back yard gardening while the TV set is on. We know when someone’s engaged. We can then do things to make that experience better.
On live rights procurement:
There’s relationships and there’s decision-making and there’s a desire to participate in the future, but the most important thing is the writing of the check. Which is: Leagues will give you their rights when you pull out your checkbook and you make a deal and you decide that you’re going to pay them. Ultimately that’s what this is about. It’s a superior technology. We have an ability to drive revenue by getting retention of subscribers, getting the money directly.
We can do marketing within the service. Not 30-second ads, which drive everybody crazy. We will have to create a better business model so we can write a bigger check. That’s all you need to know. If anyone in the audience has a bigger checkbook than I do, they will sell you their games.
On ad delivery:
We do not have advertising in our subscription service right now, but we will. And what we will do is just as we will disrupt the way that we acquire the ability to watch sports through an app, we will disrupt the way that advertising works. We really will follow the Facebook/Google model — we will understand things about you that will allow us to target ads.
We will not run 30-second ads in pods of 5-6 of those so they see the same car ad 14 times in a 3-hour game. We will not interrupt games in a way that are unnatural, the way they do on television. I know this because I negotiated it: We had the rights to run 78 commercials during the average American football game. That is a lot of commercials to watch. What we will do is figure out a way to integrate content into the production.
Whether or not DAZN ultimately works in America and/or worldwide, it will be very interesting to see them make a go at writing these 9- and 10-figure checks in the hopes of disruption.
A lot of people would say that Skipper overpaid for live rights at ESPN; I would dispute that belief when it comes to the NBA deal (ESPN and Turner had to pay up big to keep FOX out of the package), because the back-end of which projects to look fantastic for ESPN in my opinion.
Nevertheless, there are going to be a lot of deals in the next few years where DAZN as a new bidder is going to push the rights fees way up for legacy television institutions if they want to keep what they’ve got.