The Bundle Bulletin: What (and who) next for Netflix, DAZN, Disney, News Corp, YouTube and Apple
The homework notes from the sports media podcast, curated by Murray Barnett and Yannick Ramcke
READ ME FIRST: We’re evolving The Bundle newsletter - see previous note on our plans to build the Unofficial Second Brain.
It’s a work in progress (aren’t we all?).
The aim is to get the best of both worlds: a second brain that combines the deep subject and real world expertise knowledge of Murray Barnett and Yannick Ramcke, with the many and varied benefits of AI - but with the inputs carefully curated by Unofficial Partner and their trusted collaborators.
The starting point is a private reservoir of high quality sports media analysis derived from our own sources - transcripts and audio files of every Bundle podcast, going back to 2019, for example, along with every Bundle Bulletin newsletter, and some carefully chosen links to trusted sources.
So no random shit; fewer six fingered hallucinations.
It’s early days but already we can see a direction of travel, particularly in the job of knowledge gathering and podcast preparation.
Below is a start point. We’re always thinking of how to develop interesting editorial outcomes that will be valuable to you, the audience.
Thoughts welcome etc.
The Bundle Predictions for 2025
NFL will create a special package of 17/18 games available globally
MLS and Apple will renegotiate their media rights deal (possibly not until 2026)
Netflix will:
buy US (and some other markets) F1 rights
do a global deal for Kings League (may be too early)
launch a daily sports news show
Buzzer 2.0 - Netflix or Amazon (probably Amazon) will launch a ‘discoverability’ service a la Buzzer to alert subscribers to upcoming live sport
DAZN will:
Acquire/partner with another traditional sports broadcaster in a key market.
Receive investment from the Middle East
YouTube sports viewing will have the largest rises in viewership in 2025 – whilst YouTube is important for viewership, it is still a challenge for rights owners to monetise
China will be back as a global sports media buyer
More retailers and brands will buy significant rights. Not a la Amazon but perhaps more like:
Genius Steals: Four stories upon which you should really have an opinion
1. What that Netflix FIFA Women’s World Cup deal tell us about their strategy for sport?
What happened?
Netflix and FIFA have struck an exclusive media rights deal in the United States, the Women’s World Cup in both 2027 and 2031. Every game will be streamed on the platform in both English and Spanish language.
2027 - Brazil (First in LatAm)
2031 not yet awarded but likely US
Incumbents were Fox Sports and Telemundo
First time Women’s WC has been sold independently
Comes of the back of NFL Christmas Day games (globally) and WWE (multiple major territories)
Why it matters
Netflix now has significant presence in sport
Largely focussed on US Market tastes (their largest market)
Coincides with the launch of their ad tier in the US.
Gianni Infantino, president of FIFA, “This agreement sends a strong message about the real value of the FIFA Women’s World Cup and the global women’s game. FIFA and Netflix partnering together makes this a truly historic day for broadcasting and for women’s football.”
Had previously complained about ‘allocated values’ for WWC when FIFA sold them bundled with Men’s. Worth noting, the 2023 tournament was in a terrible time zone (Aus/NZ)
Where it’s going
Ted Sarandos (in 2022) - Netflix is “not anti-sports, we are just pro-profit”
The proposed offering suggests there is no difference between a Netflix presentation and a ‘traditional sports broadcaster’ presentation
Carlo De Marchis - Integration with existing sports documentary portfolio creates entry points for new fans, while upcoming documentaries maintain engagement between major tournaments. This, combined with live events, creates a virtuous cycle of engagement.
Documentaries (they have already featured US nation steam and Spanish national team)
Wrap around studio shows
Multi-language coverage
4 reasons why this is a good move from Netflix:
Likely 2 tournaments in a US friendly time zone – rating will be high
Continued growth in popularity of Women’s football in the US
Advertiser friendly product for adsales tier – (Netflix should be able to sell better/targeted than sports broadcasters)
Halo effect on other non-sport content
What this could do for Women’s soccer -
The digital experience (recommendation algorithms & content discovery) could expose a whole new audience to the sport
“This agreement says more about FIFA than Netflix: In contrast to commercial and sponsorship rights which have distinct audiences, unbundling women’s football media rights from the men’s game in the world’s most valuable sports rights market has always been a risky move. After initially (and reportedly) facing lukewarm interest from traditional broadcasters, the partnership with Netflix ticks a couple of boxes for FIFA: Reach, with Netflix becoming the post-COVID cable TV and channel surfing. Narrative, with Netflix’s core competence being storytelling. But not on revenue, with Netflix probably living by its profitable-growth strategy.
Netflix, for its part, might not had pinned this RFP on top of its calendars but continues its strategically opportunistic approach as the sports rights marketplace evolves: FIFA Women’s World Cups fit its customer engagement and advertising strategy — and also caters to the company’s core competency: the business of storytelling. It’s unlikely to drive incremental new audience acquisition in its most-saturated market, but Netflix growth in the U.S. will need to be driven by ARPU expansion (advertising) and lifetime extension (engagement) anyway.”
2. HOW WAS THE NETFLIX NFL CHRISTMAS?
What happened
This is the first year of Netflix Xmas day games package
Why it matters
The most streamed NFL games in US history (figures include local CBS stations)
Chiefs v Steelers averaged 24.1 million. Ravens-Texans achieved 24.3 million, peaking at 27 million for Beyonce’s half-time show.
Lower than previous network broadcasts but arguably worse match ups
Comparison - NBA’s 5 Xmas day games on ABC and ESPN averaged 5.25m
Conclusion
Successful for Netflix because:
The technology stood up
NFL a great subscriber retention tool
NFL a key to generating ad-revenue as the market for sign-ups becomes saturated
Successful for NFL because:
No technology issues
Emboldens opportunity to create new global package and/or open up existing US TV agreements in 2 years
Netflix demographic skewed younger for the games
“Netflix obviously had arrived in the sports rights arena before its technical and commercial success around its NFL Christmas Game which included an official, Nielsen-metered U.S. streaming audience record. Glass-half-empty perspective would be it averaged less than any recent NFL Christmas games on linear broadcast TV of up to 30M viewers, as even the most-distributed streaming service means compromising on reach (minus 10-20% compared to linear broadcast TV). Glass-half-full perspective: Total de-duplicated reach (65M) speaks for the enormous accessibility of Netflix as a distribution vehicle — and might be just a better, more exciting game away from the 30-million mark next season.”
3. NEWS CORP SELLS AUSTRALIAN PAY-TV GROUP FOXTEL TO STREAMER DAZN
What happened
News Corp is selling Australian cable group Foxtel (Fox Sports, Kayo, etc) to UK-based sports streaming service DAZN in a A$3.4bn (US$2.1bn) deal, as Rupert Murdoch’s media conglomerate narrows its focus to news, property and publishing.
News Corp (65%), will hold a minority equity stake of 6 % in DAZN and have a seat on DAZN’s board of directors.
Telstra (35%) will have 3% stake in DAZN.
Enterprise value represents more than 7x Fiscal 2024 Foxtel EBITDA, including repayment of shareholder loans amounting to A$706 million and minority equity interest of approximately 9% in DAZN
Deal expected to close early 2025
Why it matters
Murdoch has often been ahead of the curve – he has many reasons to sell but perhaps one of them is an acknowledgement the traditional business model for sports TV doesn’t work
Not the first time DAZN has looked at acquiring a traditional ‘traditional’ sport broadcaster (rumoured to have looked closely at BT Sport and Premier Sport in the UK
DAZN gets presence in Australian sports.
Inherits (v important) AFL and Cricket Australia agreements for next decade
Also has NRL rights for a number of season (3?)
Where it’s going
Fox wanted to sell - News Corp chief executive Robert Thomson said the sale would free up the media conglomerate to focus on its fastest-growing businesses, including Dow Jones, the publisher of the Wall Street Journal; online property listings; and book publishing.
Also faced increased competition in the entertainment sector – DAZN may look to sell -off entertainment
Long term rights agreements give DAZN revenue (subscriber) certainty
4.7m Foxtel subs
Foxtel cable/Foxtel now – 1.4m
Binge (entertainment) – 1.6m
Kayo (sports) – 1.5m
Strategically valuable to have News Corp on DAZN board
Potentially good marriage of product (Fox) with technology (DAZN)
Australia a sport mad country but restricted due to anti-siphoning rules (could make it a challenge although FTA’s are not as strong as they used to be)
Fox Sports only substantial Pay sports broadcaster– little competition
Shay Segev - “incredibly exciting opportunity for DAZN to enter a key market, marking another step in our long-term strategy to become the global home of sport.”
Shay Segev said DAZN was “committed to using our global reach to export Australia’s most popular sports to new markets around the world, just as we have done with the NFL”.
Global NRL/AFL streaming – Foxtel offers Watch AFL/NRL in dark markets already
DAZN - Cricket aping NFL GamePass model?
Broadband TV News - Foxtel has come under pressure from streaming businesses that are able to operate under low margins. The acquisition of Foxtel marks a noteworthy strategic move by DAZN as it enters the classic pay-TV market for the first time. Legacy pay-TV operators in other countries will undoubtedly follow the development with great interest. With News Corp and Telstra as shareholders, DAZN could embark on a larger acquisition spree.
“It’s been a trialed and proven market entry strategy for DAZN (see: ELEVEN in Portugal and Italy). The pure-sports streamer is now in the process of scaling what’s been proven locally and selectively: making new markets ‘profitable’ within 3-5 years as they mature. It’s easy to say that new markets entrants, including ‘Big-Tech,’ can simply wait until rights expire and are up for bidding again, which can be a long process with uncertain outcomes. Here, DAZN instantly acquires market-leading sports/entertainment content, consumer brands, subscriber bases, and production expertise in a strong consumer and advertising marketplace. DAZN’s model is build for scale (technically and commercially), which requires organic or inorganic growth fast. One caveat though: Sports remains local and tribal, and doesn’t travel automatically — something to consider when aiming for becoming the ‘Global Home of Sports.’”
4. Fubo and Disney settle Venu antitrust lawsuit and merge virtual MVPDS
Venu became more of a liability (with known and unknown risks) than an asset for Disney. While it was supposed to smoothen Disney’s linear-to-streaming transition, it was never expected to fully solved it. The sports programming market is rapidly evolving and Venu’s value and utility to help managing that transition may went away for ever during the injunction and delayed launch. The settlement with Fubo probably never aimed at unblocking its launch, other plaintiffs’ such as competitors and state legislatures would have not gone away easily. It was about unblocking the company’s broader, long-term DTC strategy instead: Unifying and cross-pollinating its streaming services within the DTC segment, both technically (e.g. ESPN+ and Hulu on Disney+) and commercially (e.g. Disney bundle with 40%+ discount on monthly a-la-cart prices), as well as the OTT launch of ESPN flagship.
See you next time.
"First time Women’s WC has been sold independently" - not true...
First time for the US market only, but worldwide starting WWC-2023