DAZN Sees Promising Path to Profitability in Central Europe After Raising Rates

Posted on: September 13, 2022, 11:47h. 

Last updated on: September 16, 2022, 04:38h.

Erik Gibbs Read More

Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Sports media platform DAZN, which recently launched its own sportsbook, is optimistic about its future. After several years of struggles, it expects that, at least in Central Europe, it will start making a profit within the next year and a half.

Specifically, DAZN sees the DACH region – Germany, Austria, and Switzerland – as gaining considerable strength. The company told German media outlet Süddeutsche Zeitung that it can be profitable in the region in as little as 12 months or as many as 18.

Its optimism doesn’t stem from just hard work and expansion, however. DAZN recently raised its subscription prices, allowing it to improve its financial health.

The outlook comes via new agreements DAZN has scored in Europe. It expanded its deal for Bundesliga soccer and holds most of the rights in Germany to the UEFA Champions League. These are on top of the rights it holds for EUFA Europe League, the FA Cup, Spain’s LaLiga, and others.

DAZN Gets In The DACH Zone

In addition, 10 months ago, it added a channel from Sportdigital Fussball, a pay TV broadcaster in Germany. However, DAZN is also spending big to acquire the new agreements.

Earlier this year, DAZN doubled the subscription price for its streaming service everywhere. In the DACH region, the price doubled, reaching €29.99 (US$30.00). However, this wasn’t even the biggest rate increase the company introduced.

In February 2021, Spanish customers paid €9.99 (US$10). This then increased three months later. Now, they’re paying €24.99 (US$25), 250% more. In the UK, the price increased 400% in a year.

Since these increases, DAZN has continued to hunt for more broadcasting deals. It has succeeded, too, extending its agreement with the NFL and adding new UEFA content in the DACH region. The company also has an NFL rights deal in Canada.

On the Rebound

There’s still no guarantee that DAZN will hit its mark. It hopes to be profitable within 18 months. But there’s still a lot of work to do.

DAZN took a beating in 2020, reporting a loss of $1.3 billion for the year. Its parent company, Access Industries, bailed it out, giving it $4.3 billion in new equity.

The continued expansion of its footprint might not hit the mark completely in the bulls-eye. While DAZN is securing new broadcasting deals, they don’t always give consumers a big enough piece of the action.

For example, its deal with the NFL begins with the 2023 season but includes a broadcasting partnership with the NFL’s media outlet RTL. Together, DAZN and RTL will offer a combined 170 games. But the regular NFL season has 272 games.

This makes it difficult for some to justify the price point since they will miss much of the action. DAZN carries primetime Thursday games and Sunday and Monday night games. It will add one early and one late kickoff game starting next year.

There’s also the time factor. When it’s 4 PM in California, it’s 1 AM the next day in Germany. As dedicated as many sports fans are, pulling an all-nighter for a football game might be hard to justify.