DAZN Doubles Down…On Its Prices

By Paul Magno on March 21, 2019
DAZN Doubles Down…On Its Prices
So where does the “I want some stability, stop jacking the prices around” group fit in?

Could that DAZN “significant research project” be something as simple as a look at the company ledger and the tally of upcoming expenditures?

Less than a week ago—in a pretty widely ignored piece I wrote for this site—I talked about streaming service DAZN’s poor business model and the financial strains that may be already popping up in the wannabe Netflix of sports.

Now, we get a bit of news that plays directly into this observation.

On Thursday, DAZN announced that it would be reworking its pricing structure. The current $9.99 per month price will be done away with, in favor of a flat yearly rate of $99. Those who want to pay on a month-by-month basis will now have to pay $19.99—double the current subscription fee. Current subscribers, however, will be able to keep their current $9.99 plan until March, 2020, when they will have to decide to either re-up for a full year or pay double.

Kevin Iole of Yahoo Sports, in an aggressively apologetic piece with a title pretty much taken directly from DAZN North America executive vice president Joe Markowski’s talking points (“DAZN tweaks pricing structure to create plans for different types of fans”), talks about the changes and the reasons for the changes.

Well, not really. He more or less talks about why this thing is a good thing, a very good thing.

Lance Pugmire of the Los Angeles Times wrote basically the same story, but opted to not re-word corporate talking points into the body of the piece.

Per Pugmire:

“The pricing, Markowski said, emerged as a result of company research of its undisclosed current subscriber base, which he classified into two groups.

“Those called ‘value seekers’ are primarily motivated by the feeling they are getting a bargain from their purchase, and those labeled ‘flexibility seekers’ aren’t as concerned with cost as they are with accessing DAZN’s programming on an as-needed basis.

“‘In recognition of both, we wanted to propose a model that serves both optimally,’ Markowski said.”

Ok, then. So where does the “I want some stability, stop jacking the prices around” group fit in?

Markowski, per Pugmire, believes consumers will be understanding when it comes to the price shiv.

“‘Do I expect initial blowback from the U.S. boxing fan base?’ he asked. ‘Yes, sure. It’s the nature of the 21st century. We are making this change after a significant research project. In the end, I believe they will be understanding and recognize the continued value, but I’ve got my tin hat over the abuse I’m expecting from social media. I will say we wouldn’t make any change without this analytic.’”

Could that DAZN “significant research project” be something as simple as a look at the company ledger and the tally of upcoming expenditures?

With their boxing payroll costs alone—including $365 million over five years for Saul Alvarez, $100 million over three years to Gennady Golovkin, an undisclosed big bundle to Anthony Joshua, and a quickly-expending roster of high-end fighters—not only will subscriber numbers have to grow rapidly, but a full year of loyalty from those subscribers will be a must.

Hence, the current move to focus on year-long commitments and the push to get double the money from a one-month sign-up.

The DAZN brain trust might be just figuring out the sad reality that there just aren’t that many boxing fans in the US these days—at least not those who are consistently willing to pay for a subscription service. In a day and age where high-end boxing on free network TV can barely attract two-million viewers, DAZN, given the MLB-level payroll they’ve put together, may have needed 2 million loyal monthly subscribers under their old pay plan just to break even.

Maybe that’s what their “significant research project” really told them. But why, exactly, did it take six months to figure this out, after about a billion-and-half dollar investment?

The streaming service is adding a MLB package to their programming this year and more mainstream sports additions are in the works. How soon afterward will they see the easier road to success through mainstream sports and how soon after THAT will boxing be an afterthought—niche programming, deemed significantly profitable only through, yep, pay-per-view?

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  1. R. Serling 03:42pm, 03/22/2019

    It’s a good thing they wished us into the cornfield; a very good thing!

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