The time came and at Dazn’s ‘headquarters’ they crossed their fingers after months of behind-the-scenes work. The LaLiga day this coming weekend will be the first in which the streaming platform becomes ‘independent’ of the infrastructure of Orange and Movistar (Telefónica). The clients of both operators will have to go to the ‘app’ of the British company to see the five assigned games. The last time that happened was last summer, in the first batch of games, and it ended with a wave of technical problems. In the telecos they watch very closely.
There are two factors complicating the situation. On the one hand, the configuration this year of the broadcasts. Dazn refused in its wholesale contract with the telecommunications operators, in which it resold the rights of its parties, to transfer the signal of its finds in mobile applications as it does in the decoder channels of the clients. This forced users to register in their ‘app’ and watch the matches in it, which overloaded their servers -on the opening day there were problems in the broadcast and also in the process of creating accounts and identifying users and passwords-. Added to this is the other factor: broadcasting sports with a massive following, such as soccer, is quite a technical challenge.
During the last months, Dazn’s technical team has worked to try to ‘shield’ the technological infrastructure and avoid major problems. But it has not been easy and they have been postponing that date. At first it was suggested that it would return to the initial situation in a matter of weeks. Later, due to the pressure also from the operators, any movement was postponed until the World Cup in Qatar was held. It was finally set for mid-January. Therefore, they have left five days for telecommunications customers to register in their application to watch the games on tablets or mobile phones -which represent a growing percentage well above 20% of the total-.
Dazn’s technical team has assured the operator teams, according to known sources, that the infrastructure is ready and armored to perform. But this is his particular litmus test. A second barrage of technical problems would be a very significant stumble for the company that has already suffered some problems in Italy. In the transalpine country, the Government started a few days ago the commitment of the platform, which has most of the broadcasting rights of the league (Series A), to compensate those affected by technical failures during the previous week.
From the two operators they are on guard against what may happen. Both are at stake in this case, since the clients who make the change are not those of Dazn, who have contracted their packages to watch the 5 games, but their own. In other words, they have a business relationship with them and claims will be addressed to them in case of difficulties. They could demand damages if, as has happened in Italy, there are problems. The vice president of the Consumer division of Orange Spain, Diego Martínez, came to point out possible compensation last October. “The logical thing is that Dazn could take over the entire service, end to end, just like Netflix,” he said.
The telcos have put a lot of money on the table to have this service from Dazn. In the case of Telefónica, it agreed to a payment of 280 million per season for incorporating the 5 games on the streaming platform into its offer and thus having the entire league. Orange did not make the amount public, but it would be around, according to known sources, 100 million euros per campaign. This amount includes not only the transfer of the signal for users who watch the games from fixed television decoders, but also for those who watch the games on the British company’s ‘app’.
global losses
The context in which this ‘litmus test’ arrives is marked by the price increase that the platform has executed for direct customers who have contracted their packages -Movistar and Orange customers, affected by this change, are not included -. The five LaLiga matches have been included in the most expensive package in his portfolio. This was at 25 euros per month (20 euros in installments but with an annual commitment). Now it is at 30 euros.
The year 2021, when it had not yet entered Spanish soccer, closed in Dazn with total losses of 2,300 million dollars, as Bloomberg revealed a week ago. Only the costs for rights shot up from 1,200 to 1,900 million dollars, after the bet on soccer in Italy and Germany. Revenues grew by almost 80% to 1.5 billion. The past year still does not have closed accounts. But the irruption in Spain, where this first season has had to pay up to 460 million in installments. Of those, around 360 million were compensated with wholesale ‘resales’ to telcos. The rest must be covered by your direct customers.
