Canadian Sports Media Oligarchy Faces New Competitor
Bell and Rogers continually win battles against rival media providers, scooping the majority of Canadian customers for television, internet and phone service over the past few decades. These companies face little competition, enabling them to raise prices simultaneously on a whim.
Recently, both media oligarchs decided to increase the cost for bars that broadcast sports for patrons, charging an extra $120 on top of regular fees. Two companies raising prices to the same level at the same time reeks of collusion, despite the lack of concern from the CRTC.
One reason for this cash grab is the steady decline of cable television subscribers in Canada, which dipped by 220,000 in 2016. Estimates suggest 247,000 cord cutters in 2017, and another five percent dip in subscribers over the next two years. Younger demographics have rejected cable television, preferring to consume digital content on smartphones, tablets, laptops and dedicated streaming devices like Chromecast, all of which can mirror Netflix-style apps on home theatres.
Convergence Research Group, which published these estimates, also believes that the revenue from broadband internet will outgrow television earnings in 2019. Rogers responded with the short lived Shomi service, while Bell created CraveTV to grab a share of digital revenue.
In terms of sports, Rogers and Bell control the most popular teams and products, streaming mostly to those who pay for television subscriptions. Enter DAZN, an international sports streaming service which recently made waves by securing the rights to stream all NFL games in Canada, without blackouts. Customers who sign up with DAZN will enjoy unlimited access to NFL Game Pass, NFL RedZone, and NFL Sunday Ticket, along with a range of elite sports competitions, like the UEFA Champions League, La Liga, Serie A, ATP World Tour and MotoGP. Similar to Netflix, DAZN will play over mobile devices, game consoles, computers and streaming devices.
Backed by billionaire Len Blavatnik, DAZN is part of his quest to create the “Netflix of sports”, which could provide stiff competition for Rogers and Bell in the long run. As more customers cut cable TV in favor of internet broadcasts, these Canadian media oligarchs could find themselves losing market share, forcing them to compete for once.
DAZN Faces Uphill Battle Against Rogers And Bell
Scoring the rights to stream all NFL games in Canada was a coup for DAZN, and a terrific way to debut their service in North America. The lack of a Canadian NFL team doesn’t prevent fans from enjoying American pigskin, so DAZN should find solid footing in the market as a strong niche product. However, growing beyond this niche could prove difficult.
Canadians love hockey more than anything else, spending most of their time following Canada’s NHL teams. Rogers and Bell will never relinquish streaming rights to the most popular sports product in Canada, unless forced by the CRTC. The Toronto Blue Jays and Toronto Raptors are also on lockdown, owned by Rogers and Bell Canada Enterprises. Penetrating the biggest baseball and basketball markets in Canada will also present a problem for DAZN.
The biggest challenge DAZN faces could be the federal government, which has sparred with foreign investors seeking to set up media and telecom companies in Canada. Egyptian billionaire Naguib Sawiris, who originally funded Wind Mobile, famously stated that he’s “finished with Canada” after his company was blocked from purchasing Allstream for $520 million.
The Canadian government rejected the billionaire for reasons of national security, an insulting insinuation against a renowned international financier. "It's totally unacceptable to have foreign investors waste their time and money, hold their capital captive, and then come up with a comment like that," Sawiris said in an interview, summing up the lack of media competition in Canada.
For now, DAZN should capture a decent portion of Canadian sports fans. In the long run, they’ll need to overcome a lack of access to Canada’s most popular sports, along with the government’s unwillingness to welcome competitors that challenge the media oligarchs.
Category : NFL News
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