Kevin Mayer on the future of DAZN and DTC

Hello everyone, welcome back to the next edition of the SportsPro StreamTime podcast. My name is Chris Stone, I'm the community lead here at SportsPro Media, joined as always by our CEO Nick Meacham. Now Nick, I almost put my foot in it during our OTT USA Summit. We were joined by Kevin Mayer But because the Bengals are always on my mind and the NFL is always on my mind, I almost went up to him and called him Michael Mayer, who is the number 1 ranked tight end going into the draft, who keeps getting, um, rumored to be a target of the Cincinnati Bengals. So in my head, I was like, I don't think his name's Michael. And I remembered and found out that it was Kevin beforehand. So that would have been quite the blunder.

Uh, yeah, that would have been quite funny to see if he would have even reacted. Uh, I'm just trying to see normally. How tall is he? 6'4½, Michael Mayer. I think the height difference might have been the big giveaway. But yeah, I mean, I've put my foot into it several times meeting people over the years, so just calling someone by the wrong first names would be a light get-out for someone like me. But yeah, Kevin, did you actually have a chat with Kevin offstage?

I did not actually get a chance to speak to Kevin. You kind of know how it is with events. Usually when those speakers come offstage, There's a long line of people that want to speak to him. So I unfortunately didn't get a chance. Just running the events, you kind of got to go from stage to stage and keep the show on the road. But no, but the one chance I did have, I kind of got scared because I definitely almost wanted to call him Michael.

Well, you never know.

He might have been really interested in the Bengals' future and who they're going to draft.

He was one of the biggest buyers of NFL sports rights.

Through his ESPN days. So no doubt has his fingers on the pulse of the, the upcoming draft.

Absolutely. Might be a huge fantasy player, dynasty, looking for a rookie tight end coming in. But you kind of touched on a little bit, we had the opportunity, or more even closer, you had the opportunity to speak with Kevin. You know, Kevin's background formerly at, uh, Disney, sort of ESPN+, launching that platform. He's also spent some time, I believe, as the CEO of TikTok, and then now the chairman of DAZN. Someone who has been right at the heart of all this, Nick. So maybe just give us a little bit of insight insight into your conversation with Kevin?

I mean, Kevin's a fascinating guy, and, uh, he already called me out, as you'll hear in the pod, that I, uh, um, I said he had 15 years experience at Disney.

It turns out it was 25, which is quite a bit different. So that was a good bit of research to kick off the, uh, the session with him. Um, but no, he was president of direct-to-consumer and international for them when he— we did wrap up, and he finished up there at about 2020 before taking on those roles at TikTok and then, and then DAZN. And has also now set up his own media business, which invests a whole bunch of different creators. But look, he effectively was the driving force for Disney to take on the streaming revolution and the direct-to-consumer revolution. I don't know if you would call him his right-hand— Bob Iger's right-hand man or off-sider or counterpart, but they were very much working together to drive that revolution forward. So few people have been in a more important or influential position than Kevin has in driving through this sort of change we're seeing across the streaming world. It's actually quite funny, actually. I was sitting next to him waiting for our session to start, and Luis Silbowasser, who is the president and I think chairman of Warner Bros. Discovery Sports, was on stage. And when he was talking about bundling, basically Kevin was like, Ask me that question because I have a completely different opinion to what Luis has just said. So make sure you ask me that. So I had to throw that question in at him pretty quickly because his question— his answer was, um, I think it was basically something to do with, uh, Luis talking about the role of sports playing as a, as a either a complement to the entertainment space where he had a different lens, which you'll hear about it in the, in the, in the conversation, uh, just shortly. But look, really, what would you call it, really direct, really intelligent guy, not afraid to sort of not share opinions. Obviously, his role as chairman of DAZN finished up as recently as a week before the event, so I kind of had to throw away a lot of my notes, not because I wasn't going to talk about DAZN, which we, we do, but also I sort of had to shift the focus back to more of a balanced view around the industry and his experience around Disney, which is actually kind of what I wanted to do in the first place. So it kind of worked out pretty well, all things considered.

Well, I think just the job titles alone, the streaming wars and everything that's there, this is absolutely an episode that you're going to want to listen into. So I hope everybody enjoys it.

Great to be back on stage already. 2 goes, 2 out of 3. The perks of being a CEO at an event like this. But Kevin, we've got lots to cover. And obviously, you've You spent 15 years at Disney, culminating in your role as Chairman of Direct-to-Consumer and International, and oversaw Disney+ and ESPN+'s development and strategy being rolled out. So as good a person as any, I think, to be talking through things. But just tell me, before we jump into it, what's the sea change been like for you to shift away from that, the Disney juggernaut, into the— and tell us a few of the different things you've been up to in the last couple of years.

Well, I was at Disney for actually 25 years.

There you go. My research is already out the window.

That's all right. It's all good. It was fun to be there. It's a big platform. We are in all sorts of different businesses, entertainment writ large, sports, movies, streaming channels, theme parks, consumer products. It's a great company with a broad remit, and people love it. It's all the brands that really matter in entertainment are kind of housed at Disney. So that was a fun ride. I spent some time at TikTok running TikTok around the world. That was an interesting endeavor, which I remember we may talk a little bit about today. And now I'm doing a couple of things, but the main thing I'm doing is I built a new studio called Candle Media with Blackstone Private Equity. Been doing that. That's been a lot of fun. And I was chairman of DAZN until last week for a couple of years, and that was great. And that's the main subject of what we'll be talking about, obviously. And I'm also investing in consumer technology. So So it's fun to be outside of a big company.

If you thought you were busy, here you go. Kevin's one-upped you already. So Kevin, let's talk about a few things. Because Louis and Steve were talking about it then, I want to talk about things like when we're looking at the sports streaming landscape and sports roll in sports, what are your thoughts on the concept of the bundle? Because everyone talks about it constantly, about that's what consumers want, and we've ebbed and flowed over the last couple of years. Just what's your take on how that plays out? You've, you've seen that firsthand with both Disney ESPN and DAZN being more sports-focused. So what do you think?

Well, it depends on what you mean by the bundle. The bundle that you're talking about is the big pay-TV bundle in the US that has entertainment, it has sports, is a huge price. There's hundreds of channels. And I think that is on— it's on a massive declining trajectory. And there's the reason for that is that many consumers don't feel well served by the bundle. If you're a sports fan and you're paying a lot of money for that bundle, most sports fans are also entertainment consumers. So a bundle makes a lot of sense for sports fans. Sports being as expensive as they are, that has made the price go very high. One of the reasons, I think probably the main reason the bundle is in trouble is because of sports. And many people are not sports fans. And if you ask everyone to pay a huge amount of money for sports and they're not watching it, I think that causes some— it causes churn. And I think that's what you've seen in the US. In Europe, it's been entirely different because people have paid for sports, even though it's not streaming all the time, even though it could be on a satellite platform or a cable platform. Sports fans have paid separately for sports and entertainment. I think that business model has worked very well and is pretty stable. Again, it's much different here. And I think forcing people in a forced hard bundle to buy sports that they don't watch, as expensive as that is, I think has already proven to be a huge mistake. And I think it's not a good idea now to force people that are buying entertainment services to also pay for sports. It's just too expensive.

So looking back at what you set up and oversaw at Disney with the Disney+ and ESPN+ strategies, pretty much every platform in this industry has changed or pivoted or evolved its strategy over the last few years. What you set up to what it is now, how much has that changed? What have you seen from the outside in, I guess?

In the entertainment platforms? Well, I think streaming has become the norm. If you're watching entertainment programming, there's not a whole lot of reason to watch it on a time basis so that watching a show on Wednesday at 9 PM just doesn't make any sense. There's no need for it. Unlike sports, which are obviously watched when they occur, entertainment is much different. So Streaming on-demand programming has been the way that people like to watch that entertainment programming. I think it makes a ton of sense. I think streaming services are, you know, they offer high quality and good value for the money. Even the more expensive ones, HBO Max, you know, Luis is from Warner Bros. Discovery, it's great value. They have really premium programming. And even though it's $15 a month, I think it's still, you know, good value. When we launched Disney+, we launched it at $6.99 because we wanted to have, A very democratized experience. People, families around the world love Disney and Marvel and Star Wars and Pixar, and we didn't want people to have to make a choice financially to either take it or not take it. We wanted people to think, well, how could I not subscribe to Disney+? It's such a great deal. Now, there's a lot of pricing power to be in Disney+ going forward, and I think they'll take advantage of that. But the streaming landscape has gone sort of as I expected personally. Netflix is a juggernaut. I think it's unassailable. No one's going to beat Netflix at the number of subscribers they have around the world and the revenue and ultimately the profitability that they can pull in. I think Disney+ was always intended to be just for the fans of those brands. So, it's not going to be quite as well-penetrated as Netflix. It never was intended to be. I think Warner Bros., HBO Max is great. I think when you get to Amazon Prime and to Apple TV+, the degree of financial wherewithal of the companies that are that are backing those streaming services, really, really, they're going to be around for a long time. Amazon in sports, Apple in sports too, I think. When you get to the lesser streaming services, I think you'll see some consolidation happen. But it's really taking over the world. And I think it's the appropriate way that you should watch this programming.

Just quickly on Apple, obviously, one of the biggest moves they've made is the MLS deal. Quite a significant deal in terms of the scope of it being global. What was your take on seeing that deal? Was that something that surprised you, or a move they needed to make? if they wanted to become a player in the sports world?

That's a bit surprising. They paid a lot for those rights, much higher, a massive increase. If you're Apple, you have aspirations to improve your brand. I see that the whole streaming service for Apple, both entertainment and sports, is really about improving the Apple brand. And I think you'll see they'll make moves at a very premium level. Because there's a very premium nature to the Apple brand. I think that a lot of that is a marketing expense for them. A lot of it, I don't think they plan to have a huge contribution directly from the economics of those streaming services, especially in the context of Apple, which is a $2.4 trillion company. But I do think sports is a good brand builder for them. I don't think they'll go crazy and buy all sorts of sports, but opportunistically, if they find a niche that can really bolster their brand, they'll be participating, I think.

So you just mentioned DAZN earlier about how you finished up as chairman with them after 2 years with the company, um, and overseeing pretty dramatic change over those 2 years. You actually took over from your former colleague, uh, John Skipper, who was chairman, uh, up to that point. Uh, talk to us about that journey. What, what was it that sort of— I guess, where— what have you seen change, or what have you driven, uh, to change that business over the last couple of years? Because it doesn't— in my— from my lens, it looks quite different to what it did a couple years ago.

Well, I think we made a fair amount of changes. John Skipper, former ESPN chairman, is a great friend of mine, awesome guy, and he had a vision for DAZN. Mine was a bit different. I think DAZN, the center of gravity of DAZN is better served by being in Europe and in some parts of Asia. Japan's a pretty big market for them. There was a global nature to the DAZN business when I first came on board, which I thought was a bit of a misdirection because as we know, There aren't that many global sports. I think it's been mentioned in the last panel, or I think you mentioned that actually.

I did indeed.

I think the NBA is a global sport. I think EPL football is a truly global sport. Most of the other football leagues in Europe aren't really that global, but EPL has carved out a really substantial position. And you look at the NFL, we at DAZN just did an NFL deal to take the NFL Sunday Ticket package outside the US. It's not really a global sport. It really is centered, the center of that is definitely the US, and Canada is a big fan, and so is Mexico. You mentioned Mexico being a multi-sport, country, which it is. But I felt that to be a real premium service, to get high ARPU, the revenue per user on a subscription basis, you really had to have the sports that matter in the local markets. And trying to come to the US and compete against ESPN and TNT and Apple and Amazon and all those guys, that seemed like a very difficult thing to do. But going into markets where there's a traditional media competitor like a Sky or someone else, we thought that was something that we could actually take a hold of. So we We went around the countries of Europe and we did a pretty good job. We got all the Serie A rights in Italy, and Serie A is a religion in Italy, and we've done a really good job there, I think. We've gotten half the La Liga rights in Spain. We've gotten Bundesliga rights and Champions League rights in Germany. So those 3 big countries in Europe, we actually have— I think we're the premier provider of sports. Tried to get the EPL in the UK. in the UK. I think my friend Luis here beat me out for that one. So that was a bit of a disappointment, but good on him. That was a good move for those guys. And we have some things, a smattering of things that we have around the world, boxing and combat sports being the major one, but also women's football. We have the Champions League for women's sports globally and La Liga women's soccer globally also. And I think we're becoming a bit of a home for women's sports around the world, which I think that's a good thing. positioning for its own.

The NFL Game Pass deal, I think, is a really interesting one and maybe doesn't get that much coverage over in the US. I'm not sure how much it did because I'm based in the UK, but 10-year deal, reported figures are pretty significant. I think they're jumping around $100 million a year depending on who you ask. But I'm just curious, the dynamic there is completely different. You're talking about taking a direct-to-consumer OTT platform into— and that sort of relationship the NFL has, and they're giving over the rights to that to build effectively from what I understand, the platform effectively within the DAZN ecosystem and on that tech stack. So it's a huge shift for the NFL to do that, to take that step away from that direct-to-consumer relationship. It's not uncommon. We're seeing moves like the WWE and the Peacock deal as an example of people— there's a price to pay or a willingness to shut up an OTT platform if either the economics make more sense. But just what's your take on that move? It took many by surprise to make that sort of commitment, but equally gives you a huge runway for DAZN to sort of build and make a proof of concept as opposed to other sports properties.

Well, I think it's difficult for any single sport to create its own direct-to-consumer service. There is in sports, for sports fans, a big value in aggregation. You want to go to one place, you want to see all the favorite sports that you have. Really hard, I think, for the WWE— it's not really a sport, but call it a sport— to have its own direct-to-consumer service. It's just not— the critical mass isn't there. Even the NFL outside the US having its own direct-to-consumer service, again, I think is subscale and doesn't serve— and it's hard to find. You have to market, you have to find those NFL fans where they are and to market to them. And you have to bring in subscribers just to an NFL offering. Really difficult outside the US. Much easier as part of DAZN where we can cross-market to football fans, Well, soccer fans, we have to differentiate now, soccer fans versus NFL fans. And we already have a top of the funnel with sports fans that we have engaged. We have their credit cards. I think it'll be an easier sell for us than they have been doing standalone. So I think it makes a lot of sense to have aggregation within sports, where I have exceptions taking the aggregation into entertainment also. I think that bundle is a tough one. So look, my relationship with the NFL goes way, way back because of my time at Disney and ESPN. It was, I think, a good deal for both of us. I can't comment on the details of it. But yeah, you have the term correct. It's 10 years. And I think it'll be a fascinating adventure for the next 10 years. I think it'll do really well. And I think that the NFL's interest in growing the fandom for their sports outside the US is going to be well served by being part of DAZN. I think it's going to do a great job.

The fight sports part of DAZN, I wanted to take a step back on that one because the big move there was that fight sports has historically been Pay-per-view is the economic model behind it. DAZN came in and said, well, we're going to offer it for a subscription. Come in and out, that's the model, very simple. You can pay in a typical subscription model and drop out at any time. Last, I think, year, 2 years ago maybe, pretty quickly after you've been involved, you changed that economic model. Just talk us through that decision and why it didn't work as just this standalone subscription monthly model.

Sure. Well, the problem is, and when I launched ESPN+, really, it was just combat sports for the most part. UFC, both the fight nights and the pay-per-view nights, we got, we licensed. And we had boxing. Top Rank Boxing was on there too. And we had a whole, we had thousands of other programs, mostly college sports and a few games from baseball. By and large though, it was combat sports. And we did something really stupid. I did it. It was my fault. We had a really premier Pacquiao fight on. ESPN+, when we launched it, again, at Disney, we believe in democratization of these things. So we went at a very low price, $4.99 a month. And we also had a 30-day trial period back then. So what we had is something like 700,000 people come watch the Pacquiao fight. Most of them did it for free because we had this trial period. And then they, of course, unsubscribed. They never became paying subscribers. And even those that did pay, paid $4.99 and they left. So we didn't make the kind of money we should have. That was a pay-per-view quality event. And so I kind of regrouped and thought about that and said, that was kind of not a smart move. We left a lot of money on the table and we left a lot of subscribers on the table. So what we did there is we decided to make these pay-per-view fights, pay-per-view quality fights, a little more expensive than they traditionally had been. We added $20 to them if you were not an ESPN+ subscriber. And if you bought that, You become an annual subscriber to ESPN+. And that worked very, very well. So we had UFC fights and we had Top Rank fights. And when they came in, we would get hundreds of thousands of people to pay. If they were already an ESPN+ subscriber, they'd pay a normal, actually a slightly discounted pay-per-view price. But if they weren't, they became annual subscribers. And it's great to have annual subscribers because you don't have the monthly churn and all that stuff. So we turned it on its head. And instead of making those pay-per-view fights a financial disaster, we actually made it Really worked well. So that concept really worked. And when I got to DAZN, I noted that they were just doing subscriptions, the same thing. People would come in, buy a month, and leave. So they'd get a— even though the subscription price was relatively pricey, like $20 a month, you get people for a month. And they'd get basically a pay-per-view for $20. And it's worth more than that. It's a giveaway. So what we decided to do is update our platform's capabilities, focus on pay-per-view, and we still have subscriptions, But if you have a pay-per-view quality fight, you have to pay a pay-per-view quality price. And I think that made a lot of sense for DAZN. And we got in a lot of subscribers because of that. We gave people 3 months of subscription when they came in for a pay-per-view. So similar to what we did at ESPN+, worked really well. It had to be done.

So back on DAZN a little bit further, they published their accounts and their finances and they had big numbers. broadcast those across the industry. We covered them quite a bit of detail. The accounts numbers were for the end of '21, I think, if I remember correctly, which is just coming on the other side of the pandemic. So things were changing again, but a little bit over $2 billion revenue, a little bit over $2 billion loss for those accounts. Now fast forward to this year, the commentary or the communication is we are going to be profitable from 2024 onwards. And in fact, the end of this year, they are going to be becoming profitable for the quarter. Obviously, how do you make that move? How do you get there? How does someone like DAZN get there? Because that is a big hurdle to overcome. Money just doesn't grow on trees, and the subscription market is competitive. How viable do you think that is to be able to be achieved in such a short window of time?

Well, the 2021 accounts A lot of that over $2 billion loss was because we recapitalized some loans that the parent company had made to it. And so a lot of it was really more like $1.2, $1.3 of operating losses. And that was a tough year, 2021. We bought those new rights. We were just growing our subscriber base. And that was the peak loss year for DAZN. A big loss. I mean, even as a peak loss, it's nothing to sneeze at. But then 2022, We increased prices across the board in the countries, in Italy, Spain, Germany, where we had those premier football rights. We had underpriced it for the first year that we had those rights. Also my call, frankly. I thought that maybe there'd be more price elasticity than there was in Europe. People in Europe are used to paying a big premium for sports from Sky or whoever else the provider was in the €30 range, and we were priced at about €15 to €20, thinking that we could expand the subscriber universe. Didn't work, didn't happen. So we went up to the premium price and we didn't lose many subscribers. We lost a couple, but it was really the right move to increase that price into the premium realm. So that bumped our revenues dramatically. So you'll see a much bigger— if we did nothing else, the revenues would move from €2 billion to closer to €3.5 or €4 billion the next year. So that's why we're going to see something like that this year. But we also had— we're taking advantage of 2 other really substantial opportunities. One is advertising. I don't think that people have talked enough about the advertising capabilities in sports. First of all, it's the last place you can aggregate a really large audience in this world. Maybe award ceremonies like we had the Oscars a couple nights ago. I'm not sure. I didn't look at the ratings, but those have been declining quite dramatically. Sports have held up pretty well. So sports are the places where you can actually aggregate a big audience. And the other thing DAZN is streamed. So all of our audience accesses our programming on platforms that can support targeted advertising. You can dynamically insert ads that are targeted to different subgroups of the audience that are watching. That increases the cost of the advertising because it increases the value of the advertising. And that is something that's happening across the entertainment ecosystem. These over-the-top platforms, both in entertainment and sports, that offer the ability to have a very high-quality brand message and high-quality video environment, but do it on a targeted basis, that's taking over the world. So linear TV that does not have any targeting is really collapsing, and it's the targetability of these OTT platforms that's really big. So advertising is growing quite substantially and profitably. And most advertising falls right to the bottom line. So that's been a big vector of opportunity. And the other one is betting, obviously. The CEO, Shai Segev of DAZN, was the CEO of Entain, the biggest— I think it's the biggest— I think so, yeah. Betting operation in Europe. And he was brought in for that reason. So we're launching betting. We've launched it in several territories. That's going to add into the profitability. So you think about sports rights as this fulcrum upon which you can really leverage a few big revenue streams, subscription being the biggest. Advertising and betting filling in the profitability. So when those things come to fruition, I think you'll see DAZN reach a steady-state, robust level of profitability. I think it'll work really well.

So building up that flywheel of revenue to make the average revenue per user scale. I'm curious, with DAZN, we're going to be talking a lot about FAST channels over the next couple of days. They obviously launched a couple of platforms in that space. When you're talking about the advertising side of things, are you relating it to just on the platform directly or more around the FAST channels that's been launched?

No, I think mostly around on the platform, but also FAST channels. And we did an Amazon Channels deal on Amazon Channels, et cetera. So every place, with very few exceptions, when you access DAZN sports programming, it's on interactive platforms that are DAI, dynamically inserted ads capable. So you're going to see, I think, a very substantial advertising opportunity evolve. It already is pretty substantial. I don't think we talked about the actual numbers, but it's actually really good and growing strong double digits.

Is the advertising market, though, as immature in Europe as I said it was earlier? Or is it actually a bit more mature than I've made out?

No, you had it right. The dynamic inserted ads in Europe are are behind where they are in the US, but it is obviously where they're going to go. The secular trend towards high-quality video environments, high-quality brand messages, plus targeting instead of just pure reach, that's the future. It's not the future of advertising, it's the present of advertising. That's going to take hold everywhere around the world.

A question coming in from the SportsPro Corner from Steve McCaskill.

Steve, hello from the corner. So if price cuts can't increase that addressable market and the focus is on increasing revenue through new services. Is there a way that you can increase that market through other means other than price? So new technologies, new service that will have an increase in revenue beyond things like advertising and additional streams? The sports fan affinity, the group of people that are sports fans is relatively stable, I would say. There's not a huge amount of growth there. And I'm not sure everyone wants to hear that, but that's what I found to be true. So we tried to grow in Europe, with pricing changes and it did not work. It was very, very stubborn, the number of people that are willing to pay. So people that will pay a reasonable price for sports, I don't think that's a group that's not going to— I don't think you're going to see a huge change in that group. In the US, you haven't even uncovered it yet because you still have the bundle and there's a lot of people paying for sports that don't watch it still in the US. So that truth has not yet been revealed, but it will be, who the true sports fans are in the US. That's coming. I don't think there's much you can do about that. So what you have to do is optimize pricing to make sure that those who are subscribing are paying a fair price for a premium product. You can do some freemium things. You can put some things in front of the paywall, maybe some of your lesser sports, maybe once in a while a big sport just to grow the awareness of it. I think you'll be hearing from TikTok today from Harish, who worked with me when I was the CEO. I think TikTok is a really interesting platform. One thing I did when I was at Disney with Disney+ Hotstar— Star is the biggest media company in India. They had all the cricket rights, including IPL and BCCI and ICC. And in India, cricket is the religion. It's like Syria and Italy, everyone watches cricket. And it was being— there was a platform called Hotstar, which was the over-the-top app. And it was always free. It was ad-supported. Well, we decided to put it behind a paywall. just before I left Disney, and add Disney+ to it. So behind the paywall, we were able to get, I don't know, 60 million subscribers. Now it's $5 a year. It's not a huge amount of money, but it's still a huge volume to subscribe to cricket, essentially is what we did. So there, you took a massive audience, put a tiny price in front of it, and have high volumes and low prices, you still get a decent, a moderately good revenue story. So maybe around the world, there are places, there are things you can do to titrate the model a little bit. this way and that way. But by and large, I think you have sports fans, you have an amount they're willing to pay, and that's what you got.

So we've got a couple of minutes left. If you have any questions, throw them on Slido and I will go to them in just a second. You segued beautifully there, Kevin, to talk about TikTok. Um, just talk, talk us through what, what that, what that experience was like. You joined, I think, uh, beginning 20— you know, mid-2020.

TikTok's amazing. Um, it's one of the most dynamic platforms I've ever been involved with. And I launched Disney+ and all that. Those are great platforms. But in terms of hyper-personalization, one of the things you're talking about in the conference, there's nothing more hyper-personalized than TikTok. TikTok's algorithm for delivering the exact video from a choice of just all user-generated content, it's not the most high-quality content. Some of it's great, some of it's not. But it is delivered in such a fashion through artificial intelligence, through AI engine, that is just highly interesting to those who watch it. So my For You feed would be much different than yours within a few minutes of using the app. And it's an incredibly dynamic experience and one where if you're used to, you know, other Western social media, your feed is determined by who you affirmatively decide to follow. I follow this, I like this. These are very strong signals that you yourself provide to the platform and it feeds it back to you. TikTok's totally different. TikTok is just sort of measures how you use, senses how you use the app. You don't declare anything. If you follow someone or like something, doesn't it really matter? The TikTok algorithm doesn't really depend on that at all. It depends on these very weak signals, these usage paradigms that you have to give you this incredible for you personalized feed. I think it's unique in that capability. I don't think anyone else around the world has AI that is that capable. And also the form factor was different. Full vertical screen video, obviously very immersive, obviously pulls people in. And I think it's the future of social entertainment. It's not really social media as connecting friends. It's really entertaining. I think that's what it is. But I think there's a future for sports on TikTok in a way that could definitely appeal to Gen Z. I think I just talked about with Hotstar and Disney+, pretty similar. I don't think there's any reason you couldn't put a stream of a game, at least part of it, onto TikTok, then maybe put it behind a paywall after fans have seen a bit of it. I think it's a way to draw the younger people in. It's a way to increase the top of the funnel massively. I think it's a pretty interesting concept to use TikTok to draw people in the way we did at Disney with Hotstar.

When you joined TikTok, I mean, it was a pretty big moment for the industry. A lot of people took note, obviously, with your background to move to that sort of business. People were like, okay, here comes— here may be subscription platforms and so forth, but obviously, time was less than 12 months there. Can you give us a sense of why you decided to move on from there?

Well, some of you might remember the heat we were under from the US with the Trump administration. It was ugly. It got very ugly. And it just was something that didn't seem right for me at the time. So I love the platform. I love the team. It's a great group of people and a great technology and a great business. It just was hard for me to do it at the time. And by the way, those same dynamics are heating up again. I don't know what's going to happen. I very much hope that TikTok can navigate through this because I think it's a great platform, but I just don't know what's going to happen.

Sure.

Let's go to Slido and see what questions have come in from the audience. We've only got a couple of minutes, so we'll be hard and fast here.

Right.

DAZN had an issue with QoE. Is that quality?

Sorry, I should know that term.

When streaming Serie A in Italy, how did that affect churn?

How was it fixed?

Obviously, there was a lot of coverage in the European media about that. Even politicians started getting involved and trying to put their words into it. So how did that turn out?

Well, I had to go to Italy a couple of times and meet with the politicians to calm the waters. Look, it's hard. I mean, sports streaming, as people in this room I'm sure know, is the very most difficult use case in streaming. Why is that? When Netflix has a show, a movie, whatever, a TV show, they can take it and run it through a compression algorithm 20, 30, 40 times so that the quality per bitrate is really high on Netflix because of the amount of times they can— or Disney Plus, any of these non-real-time streaming services, you just get to compress better. With sports, you get to compress one time because you can't get a huge delay by compressing and compressing. You put it, you run it through a compression algorithm once, then you put it online and everyone's watching the same thing at the same time. So it exposes all these bottlenecks on the internet. So you need— Higher bandwidth for the video quality because you can't compress it as well, and everyone's watching simultaneously. It's really hard. And if you've never done it before in a territory like Italy, it exposes a whole bunch of network issues that maybe people didn't realize before. Now they fixed it, and we were partnered with Telecom Italia, and they did a good job with Disney+, again, because it's non-real-time and highly compressed. They did not as good a job with sports and DAZN, Because it's much more difficult, and it exposed some problems with the network. It took us a while with them to fix it. We've done so. And I think now, once in a while, you get some small problems. But the big problems where a whole game was offline for a good period of time, those days are over.

But we are out of time. And I want to quickly throw 2 quick questions at you. So I'll make them fast. We saw efforts, notably with Fubo, about the watch and bet concept. Failed as quickly as it came.

What's your forecast for this tech from here?

I'm sorry, for the watch and bet format. Obviously, you talked about DAZN and betting, but Fubo had their watch and bet concept they developed and then shut down within a few months. What's your thoughts on that concept and that model?

Look, the concept is good. In Europe, we know that it works. I think that you have to be fully committed to it. I think that if you have the streaming rights and you have the betting capability, there are some advantages built in. You can't take too much advantage of it because of certain regulations. But if you're on one device and you're having the stream and you're having the betting capability and you can promote to the extent you can, I think there's a win there. I can't speak to what Fubo did. I like David Gandler quite a bit. He's a really impressive CEO. I'm sure he did what he could and I'm sure he made the right call to shut it down. But all I know is what we did and I think what we're going to do, I think it's going to work really well, that design.

I'll call him Mr. Come for the sports, stay for the entertainment. He used that line many times with us when we've spoken to him before. Final question for you very quickly. We've heard comments and there's been reports about your future, shortlisted with Disney and so forth. What's the future look like for Kevin?

Future's bright. I'm doing things I love to do. I have a new studio that we've created. For those of you who have small kids, you'll know Cocomelon and Blippi and all the things that we bought with Moonbug, Reese Witherspoon's company. We've had some great creative successes of late. I bought 10 companies there with Blackstone's help. I love the future of Candle Media, which is that, that is called. I love consumer tech investing. And as you know, Disney, we'll see what happens.

Big thank you to Kevin for joining us today. Thank you very much, Kevin.

Before you go, myself and Nick would just like to thank you for tuning into this episode of StreamTime. If you found the episode insightful, please make sure you like and subscribe on whichever platform you listen to. As a growing podcast, we'd greatly appreciate your support in sharing or writing a review. Ultimately, we want this podcast to not only entertain you, but also hopefully help you navigate the digital sports landscape. If you have any feedback on previous episodes or any topics and speakers you'd like to hear from in the future, please don't hesitate to reach out. You can find myself and Nick Meacham on LinkedIn or on Twitter. My Twitter handle is @SportsProChris1. Nick can be found @SportsProNick. Of course, if you want to stay fully up to date on the sports business news cycle, please make sure to visit the SportsPro Media website or sign up to one of our several newsletters to make sure you don't miss anything. Once again, thank you for listening. Thank you, and we look forward to you joining us next week on the Streamtime Podcast. Thank you.