Impossible goal? Startup to stream soccer to Net-wary Italians

MILAN (Reuters) - Sports-streaming start-up DAZN has an ambitious business goal in Italy: sign up 3-5 million customers, as many as the country’s largest pay-TV group, in a market with one of the worst broadband take-up rates in Europe.

FILE PHOTO: New Napoli's coach Carlo Ancelotti gestures during a training session in Dimaro, northern Italy July 11, 2018. REUTERS/Ciro De Luca/File Photo

DAZN, whose British parent Perform Group is backed by billionaire investor Leonard Blavatnik, starts streaming Italy’s top soccer league to home fans this month, having paid 600 million euros ($695 million) for the rights to show almost a third of Serie A matches for three years.

“We are trying to change and disrupt things,” DAZN Chief Executive James Rushton told Reuters after launching the new 10 euros-a-month streaming service at a glitzy event in Milan.

“We are trying to build a business (in Italy) that’s as big as Sky,” he added, referring to broadcaster Sky Italia, a unit of UK group Sky Plc, which is Italy’s biggest pay-TV operator with almost 5 million subscribers.

“Three to five million customers is something we are looking for over the medium term,” he said.

Sky’s satellite service is well entrenched in Italy, 15 years after it entered the market, but take-up of broadband services is notoriously poor in a country which has the worst usage of fixed broadband in the European Union.

Though 99 percent of Italian households have access to fixed broadband, only 57 percent actually use it, according to EU data. It ranks better for mobile broadband take-up, at 17 among 28 EU nations, but for connectivity overall, it ranks 26th.

“It’s not that low,” Rushton said of Italian broadband usage, adding that broadband coverage was high and that fans just needed a compelling offer to switch to streaming.

DAZN bills itself as the Netflix of sports and Rushton said the two-year-old business would spend more than $1 billion in capital this year as it buys up rights to various sports worldwide. It is also entering the U.S. market this year, where it will stream boxing, and plans to enter six new markets in 2019.

It is not the only streaming service targeting sports fans.

In Britain, Eleven Sports will make its two new online channels available for 5.99 pounds ($7.78) per month, stepping up the challenge to Sky and BT with its increasing range of European soccer and golf.

Media industry expert, Augusto Preta, head of Itmedia Consulting, said that despite the broadband challenge, he believed DAZN could reach around 3 million subscribers thanks to distribution agreements signed with the main pay TV operators.

DAZN has deals with Sky and number-two pay-TV firm Mediaset Premium, a terrestrial service controlled by former prime minister Silvio Berlusconi, to make its streaming service available — for an additional subscriber fee — to Sky and Mediaset’s combined subscriber base of almost 7 million.

“We’re not talking about an immediate thing,” Preta said. “On the broadband side, we (Italy) are not well positioned.”

($1 = 0.8635 euros)

Reporting by Mark Bendeich and Giancarlo Navach; Editing by Keith Weir

(Original source)