Kevin Mayer, the hard-charging executive who was one of the architects of Disney Plus, says sports-only streaming platforms have every chance of being viable. As chairman of DAZN, he now has a chance to prove his point.
The former TikTok CEO was speaking on Tuesday at APOS, the high-powered Asian media conference operated by consultancy Media Partners Asia. The consultancy recently charted a future where pay-TV firms, traditionally dependent on a mix of premium sports and entertainment, face serious challenges in mature markets such as Australia, but hang on in growth territories like India.
His APOS speech also came in the same week that a dozen soccer clubs proposed establishing their own European Super League. Mayer’s DAZN has denied being behind the hierarchy-disrupting proposal or even holding talks with the rebel clubs.
The secret to sports broadcast success, Mayer said, is a focus on the sports that fans most want to watch. In soccer-mad Italy, that means being able to serve up Serie 1 league games. In Japan, the requirement is to deliver baseball. He said that DAZN’s strategy in France, Spain and the U.K. consists of trying to grow with the rights that matter.
He described a “very focused” strategy of “concentric circles.” The bullseye in Europe and Asia is the local rights. The outer ring is those activities with global crossover. For DAZN, that global component is currently largely boxing.
Accordingly, Mayer said that DAZN’s success will need to be measured market by market. Success may require DAZN to become one of the two leading exploiters of rights in the target sports in each territory.
“There is nothing specific about an over-the-top service that is different than any other way to exhibit sports. Putting sports in front of sports fans is a highly profitable endeavor. No matter what the mechanism that is used, whether you are part of a pay-TV bundle, or whether you need to buy through a pay-TV bundle and the sports package is delivered via satellite, or you are buying a sports package with no buy-through entertainment product directly over the internet, those are all different flavors of the same thing,” said Mayer. “If you put it in front of audiences, in a high-quality way, with the right sports rights and market it, you can make a lot of money. It is delivery independent.”
Mayer is also on the board of the Forest Road Company, a film financier and tax credit specialist, and a strategic advisor to Forest Road Acquisition Corp. (FRX), a special purpose acquisition company (SPAC) that recently announced a three-way merger to create at-home connected fitness platform trading under the ticker $BODY.
Mayer said that health and wellness are long-term mega-trends that have a $100 billion total addressable market, and are unlikely to be monopolized in a winner-takes-all scenario. Beachbody and Myx Fitness, component companies in the new corporation, Mayer said, have created video content with long shelf life. He said that it is difficult to make great content but described Beachbody’s 15-year catalog as “quite remarkable” and “a library of sustainable value.”
Expect more dealmaking from Mayer in social media, story-telling, music and entertainment, which he said are all “co-mingled.” But his next vehicle may not be U.S.-based.
“Entertainment and music have a bit of a center of gravity in the U.S. but more and more that center of gravity is becoming dispersed and local tastes are running very local. If you are going to be a relevant global footprint entertainment commerce music company, there has got to be real, substantial local operations. You can’t do it from the U.S. alone.”
Mayer saved his highest praise of the session, however, for TikTok and its parent company, China’s Bytedance, where he was employed last year for a few turbulent months.
“It is an astonishingly high-quality app, largely down to the technology they have, which is so unbelievably advanced. Their AI and machine-learning technologies are cutting edge. They are as good or frankly better than what we have in the west. They are geniuses,” said Mayer.
“To take that volume of video content, parse it in a way for the right audiences at the right time is remarkably complicated. If you don’t do it right, you just get a jumble of video you don’t care about. But to get something that learns your preferences as quickly as TikTok does is a quite remarkable technological feat.
Mayer also described TikTok “more as a social entertainment platform than a social media platform.”
“I noticed there that there is a high social commerce potential,” Mayer reflected. “Taking the relationship that influencers might build by virtue of great entertainment content…that has great resonance with their followers. That will grow substantially in the west as it already has in the east.”
