Sports Streaming Service Market - Has the Number of Users Decreased Due to DAZN's Price Hike?

DAZN, a sports streaming service, has made a major price revision in February 2022. The service has made great strides in the past few years since its launch, but what kind of market approach is behind this major price hike?

In this issue, we will investigate user and market trends with a focus on the sports video distribution services DAZN and J SPORTS. Let us grasp the current state of sports video distribution using Dockpit, Values' web behavior log analytics tool, that enables you to analyze competing sites and research trends on the browser using behavior data that is updated monthly.

First, we will provide an overview of the two services we will cover. First, DAZN is a VOD (video-on-demand) service specializing in sports and is operated by the DAZN Group. The service was launched in the summer of 2016 and has been available in Japan since the same year.

DAZN has been offering its service at a monthly fee of 1,925 yen (including tax) since March 2019, but has significantly raised its price to 3,000 yen (including tax) per month from the end of February 2022, sparking conversation.

J SPORTS, on the other hand, is a VOD service that specializes in sports broadcasted by J SPORTS Corporation. Since the mid-1990s, their service has been widely recognized for its satellite broadcast service SKY PerfecTV!, and their online distribution started in 2013. As of April 2022, the monthly fee is 2,640 yen (including tax) for the "Comprehensive Pack" and 1,320 yen (including tax) for the "U25 Discount," which is lower than DAZN's fee due to DAZN's price increase in February.

Comparison of the user demographics of website visitors of DAZN and J SPORTS on Dockpit showed no significant differences in terms of gender or age.

The graph above shows that both sites are dominated by male users at 70%, and the ratio of male to female users is almost the same. As for the data by age group, the percentage of users in their 20s to 40s are almost the same for both sites.

Did DAZN’s price increase, mentioned in the preceding section, cause any change in website traffic?
Using Dockpit, let's take a look at the trends in the number of users for DAZN and J SPORTS.

DAZN raised its prices at the end of February of this year, but a look at the number of users on the site in March shows that the number of users is actually increasing. At first glance, there is no indication that users have quit due to the price increase. If DAZN users were to have become dissatisfied, it would not be surprising to see customers switching to other services, such as J SPORTS, but there seems to be no indication of changes among J SPORTS users between February and March.

This may be due to DAZN's exclusive broadcasting rights to the Japan vs. Australia World Cup qualifying match on March 24. Many were interested in using DAZN since DAZN has a broadcasting contract with the Asian Football Confederation until 2028, and thus, the match is not broadcast on other media, including terrestrial television. It is possible that the number of users was boosted through providing such attractive content.

Reference: Aggressive move! DAZN's true objective behind their sudden 1,000 yen price hike

From this, it can be inferred that in sports video distribution services, the centripetal force of the content made possible by the exclusive broadcasting rights to the World Cup soccer match overpowers and diminishes users' concern over the monthly cost.

From the previous graph displaying the number of users, it can be observed that J SPORTS does not experience as large of a surge in web traffic as DAZN, but maintains a steady stream of user accesses.

What accounts for J SPORTS' stable user access? Let's use Dockpit to study the number of users for each content on J SPORTS.

Looking at the top 10 J SPORTS content with the most user accesses listed above, MLB (Major League Baseball) is ranked 2nd and 7th and seems to be the highlight of J SPORTS. Note that MLB is not available on DAZN after the 2020 season, so J SPORTS will inevitably attract users interested in following MLB.

J SPORTS is also known for broadcasting content for sports with relatively small populations. In fact, the 5th and 10th content in the ranking is cycling content, demonstrating that J SPORTS has successfully differentiated its user base from that of DAZN, which tends to focus on major sports.

Looking at the composition of DAZN's price increase and number of users in the previous section, it seems that the value and quality of the content is still significant in regards to VOD.

What is the current situation of online streaming on WOWOW, which was originally developed mainly for satellite broadcasting? Let's use Dockpit to compare the number of WOWOW users with DAZN’s.

In the past year, the DAZN (blue) website has been attracting about 2 million monthly visitors, while WOWOW (yellow) has about 3.5 million monthly visitors. WOWOW has more monthly website traffic, but not necessarily a substantial amount when compared to DAZN! Considering that DAZN just launched its service in 2016, it indicates that their service is attracting users at a phenomenal rate.

Let's use Dockpit to take a look at WOWOW's user demographics to understand what kind of users they are reaching.

Looking at the above data, the age of WOWOW users appears to be high. In particular, the percentage of WOWOW users in their 50s or older is higher than that of Internet users as a whole, indicating that the service is used among seniors.

Next, we present data on the most frequently-visited content.

The page on the WOWOW website with the most page views is "About Application." Similarly, the "For New Users" page also ranks 6th, suggesting that there are a certain number of users who are considering signing up for WOWOW services.

WOWOW has been in service since the 1990s and is well-known among seniors, and it may be gaining support form an older audience who are not so familiar with the internet since WOWOW continues to be provided via satellite broadcasting. In fact, the frequently-accessed "About Application" page actively emphasizes prospective customers that they can start viewing by simply preparing a receptive environment for satellite broadcasting.

The analysis of DAZN and J SPORTS highlighted the importance of providing valuable and quality content in VOD, but looking at WOWOW's ability to continue its service, we can see its market advantage is user targeting and tailoring provisions for its target users.

A summary of what we learned through this research is as follows:

・DAZN is increasing revenue without losing users through strategic price hikes
・DAZN and J SPORTS both offer significant value through exclusive distribution and content
・As seen in the case of WOWOW, it is important to consider user demographics when positioning services

The sports video streaming service has become a popular topic due to DAZN's price increase, but, very much like the relationship between hardware and software in video games, the importance ultimately lies in what users want to watch.

No matter how low the subscription fee is, many users will not switch to a VOD that does not deliver their preferred content. Considering this structure, other VODs, like DAZN, may adopt a strategy of setting aggressive prices based on broadcasting contracts for exclusive distribution and original programming.

Also, although not limited to VOD, like WOWOW, it is still important to have a core competence. In an industry where market players are competing for users, more and more services will seek to provide value in other areas other than content to further differentiate themselves.

We hope these findings will be useful for your marketing activity and research.

[Research Outline]
・Analysis is based on online activity logging and user attribute data of participants nationwide
・Period of monitored activity: April 2021 to March 2022
*The number of participants is estimated based on the domestic net population based on the frequency of Values' own participants.
*Target devices: Both PC and smartphone devices

Top Photo by Adobe Stock
▼The analysis uses web behavior log analytics tool Dockpit. Dockpit's data is updated monthly, and you can analyze competing websites and research trends. There is a free version of Dockpit, so please see below to register.

The data in this investigation is from Dockpit, an analytics tool with online behavior log data and user demographic information under the permission of panelists in Japan presented by VALUES, Inc.

※The numbers of users are estimated by the data in the monitor and the internet population in Japan.