Saturday, February 26, 2022

Will The Risk For DAZN Pay Off?

 Longtime readers know that a recurring theme for this observer has been the overpriced and undervalued model that is pay-per-view and how more often than not it is a model that does not serve in the best interest of Boxing and the fans who support the sport in good times and bad. While Boxing remains one of the few sports that relies heavily on such a structure, often referred to as paywalls, it has been my contention going back decades that something needs to change.


In recent years, readers have seen this observer’s coverage at an extensive pace of the move not just of the sport of Boxing, but one might argue of entertainment and all of sports as a whole away from traditional television distribution including cable/satellite telco providers, and toward over the top (OTT) digital distribution or in more simple terms streaming over the internet. As this gradual push has continued over several years and continues in present day, among those streaming networks that have emerged on the sports end of things that has made a significant impact in the Boxing world is digital subscription streaming network DAZN. A network that launched internationally in 2015, before making its debut here in the United States in 2018, ironically announcing their launch in the weeks that followed the launch of premium cable sports network ESPN launching it’s first direct to consumer streaming network ESPN+ in April of that year.


Much like ESPN+, DAZN would launch with Boxing largely as its centerpiece in America, but unlike it’s counterpart, did so by boldly marketing itself as a pay-per-view alternative even going so far as to produce commercials proclaiming the pay-per-view model to be dead. Although readers know that I have to this point been supportive of this push for the reasons being that the pay-per-view model went from a reasonably priced one many decades ago, to now regularly beginning at an $70 starting price in more recent years. While some have questioned whether or not I have/had a motive for speaking up and being so vocal in my support of subscription-based streaming options as compared to the pay-per-view model, it is important for me once more to state for the record that I do not currently work for or write for any other outlet or network outside of the outlet that yours truly owns and operates The Boxing Truth®.


Although some were quick to question why I would be so vocal in pointing out the benefits of a subscription-based model both for the consumer as well as for the sport of Boxing, the reality is, I have no vested interests or biases in regard to such a model. Like many consumers, I too know what it feels like to feel the financial pinch that occurs from paying an often expensive fee to watch and in my case, cover the sport of Boxing. As such, my stance comes from being able to relate to the consumer as well as seeing how such a model has been hurtful to a sport that I have loved all my life and have subsequently spent most of my life covering. If there is a vested interest for me, it is to see the sport of Boxing grow and for it to be exposed to as many eyes as possible because the fact of the matter is, without grow, any sport becomes stagnant and as we continue to see with dwindling pay-per-view buy figures, something needs to change.


Although my stance has not and will not change based on continuing mounting evidence that the pay-per-view model is not the tried and true revenue generator for those within the sport that rely on it rather than investing in advertising/marketing and promotion of the Boxing events or looking to reasonable subscription options for consumers that they could use to generate revenue, nor is it the valuable commodity for consumers that it once was many years ago, I  was not surprised to see the announcement on Friday, February 25th that Saul “Canelo” Alvarez would be returning to DAZN for a two-fight deal beginning on May 7th when the current Undisputed Super-Middleweight champion will move up once again to the 175lb. Light-Heavyweight division to challenge undefeated WBA world champion Dmitry Bivol. I was unfortunately also not surprised that Alvarez’ return to the network will coincide with the debut of DAZN’s new Pay-Per-View concept, which not surprisingly will accompany an additional fee for current subscribers as well as an increased fee for non-subscribers.


While I do not want to spend a great deal of time rehashing what was announced as readers are more than welcome to read the press release that was made available shortly after it was received by this observer, it is important for me to state clearly, what I will say going forward will not be an attempt by me to bash a network/platform that I feel has done a great deal for the sport since it’s launch here in the United States with Boxing as it’s centerpiece attraction. Nor will this be a rant by someone who claims to be a Boxing writer/journalist, but spends time engaging with fans of the sport on social media in a manner that does little to help the Boxing or themselves as credible sources. 


What I will do however, is ask a simple question, which obviously will not be answered within the context of this column. Will the risk pay off for DAZN? A risk in that they are essentially now at least on what they insist will be a limited basis, venturing into a pay-per-view realm where many of their competition’s events including Alvarez’ last fight, his full unification of the Super-Middleweight division by stopping previously undefeated IBF world champion Caleb Plant, significantly failed to reach expectations.


Now, some might assume that Alvarez’ bouts previous to that encounter with Plant that was produced by Showtime Pay-Per-View here in the United States, in which he fought on cards that were carried by DAZN were not available outside of having a DAZN subscription. This is half true as some cable/satellite providers chose to carry Alvarez’ previous three bouts prior to the Plant fight on a pay-per-view basis at similar price points as the industry standard, but with the addition of trial subscriptions to DAZN’s network with purchase. While this was clearly done as a way to market the network to non-subscribers who have cable/satellite television, the difference now is, current subscribers will also be asked to pay a pay-per-view fee to watch select events beginning with Bivol-Alvarez through the DAZN streaming app.


In the interest of honesty with the reader, who may not be a current DAZN subscriber, the current monthly fee for a DAZN subscription is $19.99, while an annual yearly subscription is currently $99 per year. It is also worth noting that in the same press release announcing Bivol-Alvarez, the network also in addition to announcing it’s implementation of a selective pay-per-view model, also announced that subscription rates will also soon increase to $149.99 for a yearly annual subscription. This is not the first time that DAZN has increased it’s subscription rates here in the U.S., but while some may be voicing outrage and may be expressing their anger through social media and/or making threats to cancel subscriptions in response, I as someone who covers the sport of Boxing had a more curious point of view.


As some may know, the practice of acquiring sports rights here in the United States if you are a television network, whether on traditional platforms or digital streaming can be an expensive pastime. While currently the main selling point of DAZN here in America is it’s Boxing content as well as it’s other international sports, which they hold rights to stream in the U.S., in many international countries in which DAZN is available, there is a wide variety of sports content available with a subscription including, but not limited to Major League Baseball’s (MLB) out of market streaming package, the NHL’s similarly structured streaming package, and finally, the NFL’s popular, but expensive Sunday Ticket offering, which is soon to go on the open market following the expiration of it’s longtime exclusive agreement with satellite TV provider DIRECTV here in the U.S.


Obviously, I am not on the inside along with those who work for DAZN, but it is not far fetched to think that an increase in the annual subscription fee could be a precursor to the network being able to extend their existing agreements for some of the major team sports leagues here in America, if they are available to be covered in the U.S. market. While that is a much wider possibility that goes well beyond Boxing, I will return to my original question. Will the risk payoff?


One should keep in mind that DAZN, like virtually all businesses was impacted by the circumstances of the ongoing global COVID-19 epidemic and even though they have remained strong, they did lose significant finances in the early stages of the epidemic. Although some may view that as merely an excuse, it unfortunately is not and like many businesses, they have had to adapt. What the risk I’m referring to is, is one that essentially does away with their main marketing pitch of “Pay-Per-View quality Boxing without the pain of Pay-Per-View prices.” Even if this is done on a very selective basis, once or twice in a calendar year or once per fiscal quarter, it is a risky move by a network that for all the good it has brought to Boxing, is still relatively new here in America even going on four years of it being available.


One way this could be successful is for the network to reduce the pay-per-view fee significantly for existing subscribers. Currently as of this writing, current subscribers will be asked to pay $59.99 to watch the Bivol-Alvarez card on May 7th. When one factors in that at the current price for an annual subscription, which will change for new subscribers shortly before the scheduled bout, is currently just shy of a $40 difference, it is not hard to envision the idea that some subscribers, particularly those who saw DAZN as the “Pay-Per-View Alternative” as it has been marketed to be, who would otherwise be priced out due to inflated pay-per-view prices, would be turned off by paying a reasonably steep fee on top of paying either a monthly or annual subscription fee for access to just one Boxing event. While keeping in mind once again that I am not on the inside and do not work for the network, perhaps a fee of $25-$30 would be more reasonable for some rather than a price that while slightly reduced for current subscribers, is more in line with inflated fees that one is asked to pay via pay-per-view on an all too frequent basis outside of the subscription-based model.


Perhaps the key here will be what DAZN means by utilizing pay-per-view on a selective basis. Will this be used for the legitimate “Big Fights?” The type of fights where everyone from the hardcore enthusiast to the most casual of fans will want to see and talk about? Or, will this be a vehicle to entice fighters who have been conditioned to believe that the pay-per-view model is where they will be able to make significant money beyond whatever their purse might be for a given fight? After all, prior to his initial agreement with DAZN in 2018, Saul Alvarez was Boxing’s top pay-per-view draw. While if one is truly objective, that fact cannot be ignored, Alvarez’ brief venture back into pay-per-view under the Showtime banner, while more successful compared to many pay-per-view events before and since, still did not perform up to expectations, despite Alvarez’ standing as the top marquee draw in the sport.


Although some might have a very narrow view that Boxing has somehow lost it’s appeal and is on a decline, this observer feels it is a two-tier issue. One the price points of pay-per-view are no longer a value to the consumer as more often than not, for a fee that usually begins between $60-$80, a consumer will only see anywhere between three to five fights on a full card of between eight or ten bouts in some cases. The second part of the problem is the mere frequency of pay-per-view events within a narrow period of time, which can be more and more expensive for a Boxing enthusiast to watch every card that is available via pay-per-view.


It is indeed true unfortunately that the days where marquee Boxing events were sold on an affordable basis on pay-per-view for fees under $30 are gone here in the United States. Unfortunately, even as an epidemic continues as well as an economic recession as a result has occurred, we as a sport are no closer to solving the pay-per-view conundrum that has done little to benefit Boxing.


While some are likely expecting me as someone who has called for either the end of the pay-per-view model or a significant revamp to be more economically reasonable for consumers to publicly bash DAZN and even ESPN who have occasionally used ESPN+ to sell pay-per-view Boxing events with underwhelming results. I will not do that because quite frankly, I think this could be a way for the network to test the waters to ensure that the strategy they have had up to this point is indeed effective.



A friendly warning to those who work for DAZN from someone who truly has Boxing’s best interest at heart. With now three pay-per-view events being scheduled between April 16th and ending with the May 7th Bivol-Alvarez event, with the latter being the most affordable of the three (At least if you are a current DAZN subscriber), maybe those at the network should consider when and where to place these “Special Events” on a calendar to ensure the best returns possible, even if it is for them a once or twice a year option as they have claimed. The challenge for the network now is to distinguish what makes these events more “Special” as compared to what has been offered to DAZN subscribers up to now, which has been a great value. If however, those at the network think the solution will be to eventually decrease the value of Boxing cards that are available as part of a DAZN subscription in the thinking that it will increase buy figures for pay-per-view cards in a market where pay-per-view has been failing at a consistent pace, they might be in for a not so pleasant surprise in the form of subscribers that may well revolt regardless of who might be at the top of the card for their “Special Big Fight Events.” Unfortunately, once the concept of value is removed, regardless of the reasoning, it is not necessarily easy for any subscription-based business to maintain their subscriber base.


For now, as I often have in recent times, I am taking the “Wait And See” approach, but it is my hope that if the numbers are not significantly successful, that unlike other networks that have continued relying on the pay-per-view model, despite returns not being favorable to even reach the break even point, that those in positions to make decisions for DAZN will stick with what has worked for them rather than to risk alienating their existing subscriber base. Unfortunately, no matter what a Boxing promoter might claim as a “Bigger Picture” and what they see as “Beneficial To The Fans of Boxing” or at least that might be how they will try to sell things, or how a network executive may choose to try and spin things, the only “Big Picture” that will mean anything at the end of the day for DAZN will be an eroding subscriber base. For a network that has been a credit to the sport of Boxing, that would be a true shame.


“And That’s The Boxing Truth.”


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