DAZN Group’s John Skipper | Full interview | Code Media 2019

you don't normally say this but you had you had less hair the last time you were here I know a lot of people thought I was bald because I shaved my head for several years and I decided to let it grow now I've got the important stuff out of the way welcome thank you Daz n does zone mm-hmm you gotta change that eventually right no one sees Daz n and understands what that is um doesn't matter right if you saw ESPN and didn't know what it is would it matter Touche let's explain to anyone here it doesn't know what does zone is what it is um so the zone is a sports streaming service we're a global company we're in nine countries and four continents including six of the large 12 is six of the largest 12 sports consuming countries in the world we're first mover in doing a pure play net fleet for sports direct-to-consumer streaming the offering changes by territory right each in each of the countries who are in we have a specific offering the u.s. is the most anomalous offering we have so we can get to that because I know it'll come up our hope is not our hope our business plan is to go into countries the first two countries we went into or Germany and Japan we want to have first tier rights because you can't drive subscriptions without them in Germany we have Bundesliga we have Champions League and Japan we have the j-league which is their Soccer League and baseball these are things that used to run on pay TV or broadcast TV and now you have them that's correct and that's incorrect in almost every market win right we're Syria grab Syria which is the Italian Soccer League and in Italy we have the NFL in Canada we're not a believer that over-the-top either starts or finishes or can successfully be built with niche rights or third-tier rights we think they have to be build with top of the pyramid rights so if you were going to be a streaming sports service you have to have the big streaming sports otherwise we think you have to have sports that are essential to people to have and to watch the US mm-hmm I think of you as a fighting stream service boxing mixed martial arts well you think of that because it's accurate we did enter to the US we wanted to be here we wanted to grow the brand we won't have credibility so the next rounds of sports rights we could be at the table and the opportunity was boxing it also was strategic because boxing people are used to paying for 80 bucks for a pay-per-view fight we went out speaking of first-tier we went out and got the most important boxer in the world the best boxer in the world also in SOL Alvarez better known as Canelo and again it's it's approve the theory because we've used three Canelo fights to drive the overwhelming preponderance of the subs we have people are signing up in the US because they want to watch Canelo fight and then do they churn out right away or do you keep them for a year the look in the sports streaming servers you got to think about three things right you know think about what is it that you have that will get people to actually get their credit card and pay you've got to think about what is the content you have that means they'll they'll they'll retain them it won't churn and you got to think about how much RP you drive a month and you got to figure out if you have a strategy to grow that in the US as an anomalous market we have learned the lesson of churn and are trying to address it we've had three Canelo fights and you can kinda see the evolution of our business with those three fights the first fight we did what everybody does on streaming services and we gave it away for a certain period of time free and if you decide to stay you paid nine ninety eight not watch the fight for free normally pay a hundred bucks more play watch this for free and then you're hoping they stick around yet their credit we we got a large volume of people we had to give us our credit card to watch it free right but then we don't hit it for a mom right and you're hoping they stick around and by the way we learned that hope is not a good strategy because they watch the fight for free and they cancel and first orders are irrational we do not want to get billed for this we thank you for the free fight so that was in December of 2018 fast forward to May of 2019 if you want to it's the next Canelo fight it cups you $20 still a great bargain right if you were paying $85 to watch a Canela fight you're now getting it for free for $20 and we had more people sign up for the second fight that may be a result of the fighter who's fighting the marketing we did better awareness of the brand but we signed up more people and more people stayed the second month and more people stay in the third month and we also introduced an annual subscription price we did not have an annual subscription price the third fight we did with Canelo you had to pay $20 you had to give us your credit card we had an annual price and we built a fight season around it so something never been done in boxing before is we announced dozen fights that were going to happen in September October November and December most importantly that fight was on November the second on December 7th Anthony Joshua fights and eerie wheeze and that happens to be more than 30 days after so if you want to watch that fight we're gonna give you a season of stuff and we're gonna give you one thing every month so if you're a fight fan we're going to keep giving you more stuff right so we've learned from the rest of our markets turn is not really a big deal if you have the the Syria and Italy they play from August until June and nobody cancels if you're Juventus fan from August because this is a big concern for everyone getting into this business I love billions on Showtime and David Nevins won't like me saying this but after a billions runs I turn show time off and I'll come back although I heard there's a great Kirsten done show and maybe I should check it out and everyone's going to go through this and the services you've already prepared your answer to him when he calls and says how did you yeah run billion then you said but I said Kirsten Dunst I was a great show but but and what we will almost be immediately like almost this is pretty good that Apple Disney they're all trying to figure out how to get you in for a year basically for free so they don't really have to worry about churn it eventually they're gonna meet up with the same question Netflix faces anybody know faces it and you think you've figured out a way to solve it for sports look for sports I think you know we're not rocket scientist for sports turn will be less of an issue than it is for entertainment right you'll watch three or four or six forever how many years you watching Game of Thrones and if that's the thing that's keeping you on when that goes off you may turn you're not going to turn as long as we have the domestic soccer league in any country in the world outside the United States you won't you won't because there is an off season it's a short off season is it off season is June July so we either do some original content about soccer that keeps them around we have allowed people to pause right you're gonna go away but just go ahead and know that August we're gonna hit your credit card again and you're gonna come back that works quite successfully in in the u.s. boxing is not one of the major sports someone told me the majority your customers are in California is that true no not the majority Cali you the largest plural the largest single state for our our service would be California because Canelo has appeal is very high there do the Mexican American population but he's not a majority now so you can build a healthy business but you want a big business you're going out trying to raise a half billion dollars or more for this company it's owned by London bill fat neck music billionaire apparently wants to not fund it all himself if you get a half billion dollars that's a lot of money but it also doesn't seem like it's enough to buy a major courts do you give me a number got a comment oh so I'm not confirming that I have you write it in Bloomberg and I've been able to confirm it myself so let's let's let's state that as fact okay appreciate that I didn't say it wasn't true I said I wasn't confirming it good and I can't confirm it's not accurate the Lindh blotnick does not want to fund it he's funding it right now he's been extremely supportive of it he will not comment on how much money has in it but there's nobody in this room who could who could replicate the feat I can tell you that I don't think somebody sitting here and I don't not aware of and look this all Lyn did this because of his experience in music right Lyn bought Warner Music and then was the only guy who sort of understood that if you also invested heavily in the music streaming services and he invested in Deezer and Spotify that that would drive subscriptions there and then if you own a music licensing company a third of that money would come back to you in the form of licensing fees he asked Simon dinner who was this who was the founder CEO of his own can we do the same thing in music and that's the derivation of the company so he's committed he understands how this works it's it's been done in music it's being done right now in entertainment that's where the big fight is right now and it will be done in sport Sports is about a third of the sports entertainment business but right now probably because of Netflix everybody's concentrating on entertainment also because the sports rights are tied up for a couple years sports rights are complicated you can't just create the next hit you have to wait for the rights to come up that's exactly right but we have now been engaged in this for a little over three years they've been aggregate able to aggregate a lot of rights and I do think ultimately everybody nobody will disagree that ultimately the majority of the viewing of sports is going to be on a streaming service not on a linear network but I was asking you thank you for that but I was asking you if you raise a half billion dollars or more it seems like that is still not enough to compete with the networks who all want to keep sports because they are in real trouble if they lose it and you know we just had Caroline Buress and I said they're not going to bid but you know we keep waiting for an app or an Amazon to come in and make a major bid on these sports rights occasion money it seems like you guys are still going to be sort of outclassed in terms of dollars if you ask me the following question you wouldn't of course because a self-serving question source but if we started in August of 2016 who has bought more sports rights in the last three years and two months to zone or Apple or Amazon or Facebook or YouTube Google or Twitter the answer is the zone has bought more sports rights than Apple and Amazon and Facebook and YouTube Google and Twitter let's flip that over what it bring rights let's what does it mean that they haven't gone and bought the stuff you've bought look-the we're a maniacally focused company doing one thing we're building a technological platform we're acquiring rights we're selling them to consumers that's what we do we don't have any other things we have to worry about Tuesday and Thursday we worry about this Monday Tuesday Wednesday Thursday and Friday they have complex companies it means it's not their core business and they've been focusing on their core business and do I worry that someday that Apple will look up and decide we need to own sports I think about it and I respect the resources they have but we have a nice first mover advantage we've acquired more rights than anybody with whatever money can acquire next year because as you point out they come up sequentially over years we have a black sunday ticket deal is the one thing that might be available right the I was public and it was self-serving to that we are interested in the NFL because you can build a new platform in this country on the NFL we're in business with the NFL we have their their rights in six of our nine countries and they explored with their current partner AT&T whether or not they would sell a over-the-top package and we were interested in that we told them we were interested we told them we'd be interested in any time it comes up and you I've that solved one way or the other John John wasn't forthcoming about that is that is that deal still available No thank you very much that was the most efficient use of time I've had yet we're doing pretty good we're doing great when you were at ESPN I think you had a peak a hundred and four million subs something like that something in the hundred range we we never had a hundred and four million subs I think there were 104 million subs in the universe and I think he is peeing at its peak at a hundred 101 okay very close to that now down to 82 I think I'm not familiar made so that I'm we're gonna simulate that I'm right for this guy did did you imagine that number would fall back yes yes it's not yes what's the floor well hello can I that'd be inappropriate for me I don't know what it is now cuz I'm not focused on that so I haven't you know done I haven't seen runs I wasn't smart to figure out what the floor would be but yes we had models at the time and the 82 number I don't think would surprise anybody right now and do you think that that's too self-serving for you I'm straight I thought you read me the opportunity to say now I hope it falls yeah there's not as fast as possible there's the time I felt like the the young fellow in Amsterdam putting his fingers in the dike yes this the idea that you're taking on ESPN it's a cheap easy thing for me to say and efficient they are backed by Disney you know that company well they have enormous resources can you really compete head-to-head against them to get people's time and money when they want to watch sports on a recurring basis I mean I'm I would pass a lot of Tector tests if I told you I'm not focused on taking ESPN on head-to-head we're overwhelmingly a global business 90 percent of our businesses outside of the United States and we expect to continue to have a large focus on an international business and again taking on Disney head-to-head would be we're not doing theme parks we're not gonna do broadcast television we're not gonna do licensing so they're different company we're going to compete with them for buying sports rights a couple more compare and contrast you'll get to tired of it but um last time you run the stage there was a lot of should Disney spin ESPN out as a standalone company should Disney allow ESPN to be sold as a direct-to-consumer property you were adamant that those things should not happen when you were working there still haven't happened they have ESPN Plus which is not ESPN it's extra now you are selling a direct-to-consumer streaming service did your thinking change about the appeal of that kind of thing or just you were in one corporate structure and now you're in a new business and those things are different z I'm in a new job and of course my role is to figure out the best way they hired me to take what they're doing and make it work and I believe in what we're doing at Disney I was doing a different job which required a different sort of mindset right so I didn't change my mind and go somewhere to do what I changed my mind to do had a transition and now somewhere different and again I wouldn't go to work for something I didn't believe in so I believe this is going to work I believe we have we're have a focus on how people are gonna be watching sports in the future we don't have the complications that I had to deal with without protecting a cable model correct so I'm happy to agree with that and and once again you were right thank you John skipper there you heard it today this idea that all the stuff is being disaggregated but naturally it's gonna be aggregated again and we're gonna rebuttal the bundle and the stuffs gonna get put back together do you believe that's the case you believe you're gonna pick a couple things you want to pay for and the rest you're not gonna bother bundling I think that III don't think people want to subscribe to 14 things right it's always been the case it's funny no matter what how many channels you had most people watch between 8 and 17 channels that's all they ever watched I was in the magazine business for a long time and people who would say I love magazines I subscribed to so many magazines and the answer was they subscribed to about 6 to 12 I think the same thing is gonna be true here then there's gonna be a three or four big ones which are gonna be some aggregation then there's gonna be a few special interest things which everybody has some different magazines I mean some different things they like right it's the same you know time had you know X millions of subscribers and there were never more than 700,000 subscribers and special interest magazines it's gonna be a little bit like that here I do think there will be a reallocation I do think people want a few things right think newse they won't sports they won't kids they won't family they won't you think that's what consumer wants you think that's what the people who make and pay for and distribute this stuff want them I don't think I do more think of OG I want to get an aggregated bundle of stuff I won't they just know that there's a bunch of stuff they won't and just practically speaking they're not going to look at a menu don't you go to a restaurant I go to a restaurant and I see like a nine-page menu I'm like I would rather see a one-page menu that has four six appetizers and seven entrees and three desserts then I would rather see a menu right but then you pick the dessert you want and then right where you want and I guess well no one's gonna say look you're getting all three appetizers isn't that great for you right that's a buffet yeah and some people like a buffet right people like above it strikes me a mr. X we did a lot of people and not just savvy people in this room but a lot of people who can figure out by the way how to pave 20 bucks for your fight and then turnout are gonna be much more active about sort of creating their own menu at any given time because they know how to cancel stuff and they by the way they care about money so they'll be thinking about what what's the thing I want to I think that's accurate and it's gonna be a more tumultuous right people are going to move in and out of services as things they like move in and out it's too easy too it's easy to cancel the okay but the cable television bundle was a tacular business model and whether or not that can be exactly replicated and that's course what the great big companies are going through right I got twenty nine channels gee I've been getting X amount of dollars for those channels I don't have to build them if their service doesn't work I don't have to take care of them when you're in direct-to-consumer you've got to figure out how to get them how to keep them how to build them how to get more money every month I do believe if you had to pick where you wanted to be that was the most stable where your hits you buy and they're gonna be hits for let's see I guess in the in England the English Premier League has been a hit for 140 years or something I think it'll be a hit for 20 more I'm not having a capability of thinking about more than 20 years or the necessity and III think sports is the best place to be in this business you mentioned churn others what's what's the what else have you had to figure that surprised you that you learn going direct to consumer that you didn't see while you were in the cable bundle and we're wholesaling I don't I learned part of this well still Disney is we sort of bought BAM tech but I think until you think powering Disney Plus yes I think till I didn't have to understand that very well I just sort of knew and we had the resources to buy it now we have to build it and we have a technology platform the complexity of trying to think about all the permutations you're delivering to particularly internationally you're delivering into different broadband infrastructure on dozens of different kinds of screens made by manufacturers that are old that are new that have a robust broadband connection or a mediocre connection or has somebody who's living in a location and they've taken a wire and and put it in their neighbor's broadband and they're getting it there you say have an unbelievable complexity of trying to deliver this it's much harder than coaxial cable satellite dishes and the technology of this is very dramatic we do I believe have one of the two technological platforms that can deliver to those various permutations concurrent live streams of a piece of content that you are creating at the same moment you're delivering it right it's not a show that you can put in on a head end and and everybody comes in and gets it this you've got to create get it somewhere get distributed somewhere dramatically complex and it is by the way one reason that I think that our first mover advantage matters and while I worry about Apple and Amazon the the barriers of this are harder than people think one more question I want to open up to you guys and if you don't come home we'll just keep asking John more questions another back in the day question Disney looked at Twitter you were part of the group I think that thought that was a good idea the way Bob Iger tells it in his book was we were going to buy it and then we discovered it was a cesspool full of Nazis and then I had to call up Jack Dorsey who's on the board and tell him sorry we're not going to do it it's hard to take that at face value that you'd get far enough ahead in the in the deal and not realized we're buying a cesspool full of Nazis is there a different chronology there I believed that Disney would be a good owner of Twitter and I believe that Twitter needed to not be quite so diffuse right I thought you as a sports fan you I had to follow up different people they can't really help you sort of do that they don't do much curation they expect it I felt Disney could go in frankly and favor ESPN sports content so if you wanted to get sports country and get from ESPN the everything you said is accurate I'm not going to comment on the chronology of it but the overwhelming barrier to Disney owning Twitter was the inability to get comfortable that the Walt Disney Company could live with all of what was tweeted eBird actually is Warner Brothers I may be in the wrong business because I could have told them that for a lot less than whatever they're having a guys they're advised you would make a great media game people figure it out questions for them from the audience here I am Jason Rapp I negotiate M&A for a living and you've you've negotiated some of the biggest deals fifteen billion dollars paying to the NFL selling billions of dollars worth of of cable subscriptions can you tell us a little bit about either some of your most interesting or difficult negotiations and then tell us some of what you would say the keys the success of a the large-scale negotiation would be I've always believed that the key to any negotiation large or small is knowing exactly what you want and being clear on what you want and then trying to get to a win-win I do not believe there is a necessarily a winner and a loser in a negotiation and I also don't believe in over negotiating which is why I did number one I always said here's what we need and if we get what we need it doesn't matter what the other party gets I doesn't matter what it costs but to get what we need at a price that we can afford and I always tried to be completely and utterly transparent I've never believed in the you know posturing in the will tell them ten they tell us to we'll say eight they'll so for and over time created credibility when I would go in and tell people here's what we need here's what we won't if you'll do that tell me what you want by the way the first thing I ever always said in any negotiation was what do you need out of this deal because I was gonna give them stuff anyway and everything they said here's what I need I could say you told me you needed this the answer is yes so we in the NFL says 15 billion and you've got 10 in your head the NFL has been by the way I say all this and I'm completely aware that that is all much easier to do at a company with the resources and the leverage that ESPN had right I got that but it works at this company too and the the NFL had the most equal leverage with ESPN of any entity we negotiate with in fact they had greater leverage than we did okay thank you Jason hey John thanks for doing this Mike Green my question is about you're talking about the complexity of delivery in all these different environments I was gonna ask you about the risk of piracy with these high stakes events like the canal fight how do you feel about people just posting these streams on reddit and everyone else who's interested in I feel very bad about it I feel very hostile about that yeah if I was in a negotiation with them I don't care what they want the it's a problem right and it irritates me it hurts our business Anthony Joshua is British of Nigerian heritage the number of people who watch that fight in Nigeria on a pirated stream is huge and I've got to figure out that problem if I want to try to make money which I could make a lot of money out of that fight in Nigeria I do not find most of the technology companies to be particularly admirable nor helpful here the old gee you tell us there's a problem we'll take it down to me puts the burden only party that is aggrieved and relieves them of problem they create and we need their help here I hope in some ways they get into the sports business they would there would be their own contribute interest in copyright be a renewed interest in intellectual property this country's but a lot of the business of this country that is founded on intellectual property and the disregard for that I think is fairly fairly problematic Thanks how would how would a SPN have covered speaking of intellectual property in other countries how would ESPN have covered the the china NBA story differently under you I just don't believe there's any elegant way for me to comment on a company I'm no longer employed at as to how I would have done we're gonna go out on that one yes sir okay deal thank you John preciate you [Applause]

Channel: Recode

Views: 4,856

Rating: 4.7931032 out of 5

Keywords: Recode, Tech, Media, Code Media, ESPN, Sports, Kara Swisher, Peter Kafka

Id: bJFucIusxgk

Length: 27min 40sec (1660 seconds)

Published: Mon Nov 18 2019