Big questions will be asked of the fixed network infrastructure in Italy after Telecom Italia and sports streaming franchise DAZN doubled up to snatch domestic soccer streaming rights from Sky Italia – sending the lion’s share of matches OTT for the first time.
Sky Italia will be incensed that it was pipped to the post by DAZN with the backing of its fierce operator rival in TIM, which is chipping in about 40% of the €2.5 billion paid by DAZN. The deal covers rights to show a total of 266 Serie A matches over three years (not including 114 co-exclusive matches), with DAZN streaming seven out of ten matches a week on an exclusive basis, and the remaining three on a co-exclusive basis.
But what’s in it for TIM?
The operator will continue carrying DAZN’s linear channels on its TIMvision pay TV platform until 2024, while there is some sort of exclusive content carriage agreement baked into the contract too, of which the details are not clear at this early stage.
More pertinently, TIM has helped fund a direct rival to Sky Italia – prizing away content on which Sky’s pay TV business has, like so many traditional pay TV operators and broadcasters around the world, become so reliant. Sky still holds rights to show the remaining 3 out of 10 top tier matches a week, but losing its position as Italy’s top live soccer outlet will surely have a detrimental effect on Sky Italia’s stickiness in the pay TV wing. As we speak, Sky Italia’s marketing department will be scrambling to offer existing subscribers attractive new deals.
But Sky isn’t like other operators. This is a company that embraced all-IP video delivery well ahead of the curve, with Italy being one of only two countries ditching traditional DTT delivery, along with the Sky X platform in Austria, which has been around as an IPTV platform since 2019.
Sky’s ambitious broadband-only TV initiative also kicked off in Italy from summer of the same year, following a deal allowing Sky Italia to access Open Fiber’s FTTH network in 2018. The deal with Open Fiber, a venture of state-controlled power utility Entel, had aimed to bring Sky Q services to 271 urban parts of Italy by 2022. We are unaware of whether this mammoth project is on track, or whether plans have been derailed by the latest sports rights distribution debacle in Italy.
TIM was forced to respond to Sky Italia by investing hard and fast in fiber infrastructure – perhaps foreshadowing this deal as a way for it to upsell superfast broadband services together with DAZN streaming packages. TIM had aimed to create a single broadband network by merging with Open Fiber, although this ended up with the two parties engaged in a legal battle.
Either way, consumers in Italy are sure going to need these broadband upgrades to get the best out of DAZN and come anywhere close to the DTT reception that most of the country is used to. Beneath all the fiber cables, we know that Telecom Italia is an adopter of Qwilt’s Open Edge Cloud for network offload, which we see as being an important investment.
While the shift of Serie A matches to DAZN will be shock to the system for millions of Italians, this is a changing of the guard we strongly approve of – providing it stands up to the technological challenges ahead.
For that, we should take a peek under the hood of DAZN and see what the sports streamer’s technology stack is packing.
DAZN has always presented itself as being much more than a content company—boasting a “world class” technology stack for live and on-demand streaming. Such is the confidence in its technology that DAZN even offers out its esteemed engineering teams to work in partnership with operator engineering teams, including access to DAZN’s CDN technology.
However, getting DAZN deployed on pay TV set tops has hardly been a breeze. Set top variants have made life difficult for the company, sometimes having to create 10 different versions of an app to support an operator’s set top footprint – supporting different manufacturers using different chipsets and different DRMs.
Any operator in Italy that was not already running support for the DAZN app across their set top footprint, might do well to elevate this up the priority list.
AWS cloud infrastructure and services are used widely at DAZN, playing an important role in its global expansion, including scaling out the ThinkAnalytics content discovery software to meet peak demand and deliver high-quality personalized viewing experiences. DAZN has also recruited one of the best video analytics firms in the business in Conviva, supplying its Insights technology to DAZN for additional layers of OTT video intelligence.
DAZN has adopted cloud IP transport technology from video distribution vendor M2A Media, easing the acquisition of live sports from international rights partners via the M2A Connect product. M2A Connect allows clients to manage bookings and associated spend, as well as inbound cloud IP feeds—geared towards reducing the length of connectivity contracts and cutting lead times required to secure event connectivity.
Now that DAZN has splurged some €1.5 billion of its own money on Serie A rights, the race is on to cash in on these lucrative advertising slots. On the ad tech front, DAZN has launched its own enhanced DAI platform in partnership with two ad platforms, Adform and Opta. Brands are using the platform to select ads on the basis of real-time sports data, live scores and in-play visualizations, taking account of changing action on the ground.
DAZN has also scaled up its advertising platform with DAZN Dynamics, which exploits its real-time sports data to inject additional context into targeting decisions. For example, DAZN can appear on an operator’s set top EPG like any other channel to look more familiar, and also feed into an operator’s existing recommendation engine—with the aim of getting pay TV subscribers accustomed to consuming sports in this new way.
DAZN is also trying to remedy a shortcoming with targeting, the fragmentation into small segments. It has moved to consolidate ad buying across regions, different sports and formats, to increase the size of target slices.
We should also note that DAZN recently integrated Google Ad Manager 360 and DAI technology to offer advertisers improved scale, enhanced targeting, per-impression measurement, and new buying methods. DAZN has also launched a feature called Programmatic Guaranteed for agencies to purchase addressable inventory.
Security cannot be an afterthought, so DAZN has a technology and intellectual property license agreement with Swiss content security specialist The Kudelski Group. Details on the deal are virtually non-existent, other than citing access to “cutting edge streaming video technologies” and “certain key intellectual property rights”.
Ultimately, DAZN can only be as good as the internet infrastructure its content rides on. Sky Italia has at least proven it can do IP video delivery successfully while investing in fiber network buildouts, while you cannot criticize TIM’s own fiber investment commitments. On paper, at least, you could say Italy was well placed to send its most watched sports matches OTT.
But the story doesn’t end there.
An intriguing facet of the deal is that rural viewers have not been ignored. Normally with this type of deal, communities with poor internet infrastructure would be forgotten about or promised eventual upgrades that could take years. However, DAZN has agreed that DTT coverage of Serie A matches will be available as a back-up specifically for areas with coverage difficulties, in the absence of any alternatives.
That is a win-win and suggests that Sky Italia’s DTH offering could retain a share of viewers in rural areas, leading to reports that DAZN was mulling a sub-licensing deal with Sky, although these have since been quashed.
DAZN described the deal as a “seminal tipping point in the migration of sports consumption from linear pay TV to OTT.” We agree.