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Rakuten Sports goes live, can it make high-risk jump to Europe?

The lucrative live sports sector has a new streaming contender. Taking a leaf from the books of US trendsetters Amazon and Twitter, which have both paid big bucks for live sports rights, Japanese internet giant Rakuten has gone a step further with the launch of a dedicated live and VoD sports platform primed for disruption.

Centered around soccer, Rakuten Sports aims to build on the rising popularity of Japan’s J.League franchise, teaming with Lagardère Sports, the international media rights distributor of Japan’s professional football league, to distribute 2019 season J.League matches to fans in more than 140 countries and regions worldwide, excluding Japan and select regions.

But it is Rakuten’s presence outside of Asia Pacific which makes the launch a little more interesting. The e-commerce titan operates an OTT video offering in Europe, inherited via the acquisition of Wuaki.tv in soccer-mad Spain back in 2012 and rebranded as Rakuten TV in July 2017. Although currently focused on on-demand movies and TV series, the prospect of implementing Rakuten Sports as an extra subscription tier to the existing Rakuten TV, showing J.League content initially with scope for bidding for lucrative La Liga soccer rights and perhaps even Premier League rights, would be a major disruptor for multiple European markets.

That said, Rakuten has not exactly become a force in the European SVoD scene despite having 7 years to build a strong foot hold in Spain from where to initiate an expansion effort. Rakuten TV has amassed around 4.5 million subscribers across Europe, according to numbers from our research arm Rethink TV, which admittedly isn’t a complete failure and really the Rakuten TV brand is not even two years old yet. Maybe we are being a little harsh then, as Rethink TV projects a healthy outlook for the service across Europe.

Belatedly then, it was only three months ago that Rakuten publicly said it plans to take Rakuten TV to 40 additional countries later this year from its current footprint of 12 – by harnessing integrations with smart TV makers Samsung, Philips, Hisense and LG. These manufacturers plan to build a dedicated Rakuten TV button into their smart TV remote controls, providing a direct no-nonsense portal to the streaming service, much like many pay TV remotes have done by adding Netflix, Hulu and Prime Video buttons.

Back on home soil, Rakuten will have its eye on the Tokyo Summer Olympics next year, particularly as the company is putting pressure on Japan’s established mobile network operators – NTT Docomo, KDDI and Softbank – with new entrant Rakuten Mobile. As a greenfield deployer, and subsidiary of a huge cloud and ecommerce provider, the challenger has the economies of scale and the readymade service portfolio to be highly disruptive. It will not only have the luxury of building its 4G and future 5G network from scratch, harnessing modern technologies like the cloud-native 5G core from day one, but as a webscale firm, it has the cloud platforms and tools in place and is well understood, unlike most telcos.

As for video suppliers, while we believe the vast majority of Rakuten’s technical operations in Japan are handled in-house, its European service has a few notable vendors supporting it. Rakuten TV is integrated with the Akamai Intelligence Platform, which it claims has resulted in 50% improvement in its quality KPIs, yielding a 25% increase in customer satisfaction and 30% increase in revenues. In addition, Conviva’s Precision Core solution has been chosen by Rakuten TV for selecting the best delivery path for each unique device, geographical areas or content type from a single control point – balancing traffic between CDNs based on QoS. Rakuten added Conviva Insights with the aim of providing analytics and visibility from the individual viewer’s experience.

On the security side, Rakuten sources Inside Secure’s DRM Fusion Agent product line, which won a contract at Rakuten’s VoD service ShowTime in Japan back in 2013, although we have been unable to confirm if the technology has been expanded to secure Rakuten TV. Rakuten licensed the DRM Fusion Agent software from Inside Secure to get a downloadable DRM client which is protected by software only. In this instance, the client underpins the Microsoft PlayReady DRM. The DRM Fusion Agent is secured using hardening tools from Arxan and authentication systems from Metaforic, which configures software agents to constantly check system elements for health during runtime. It is these software tools that have made it the de facto leader in securing tablet and smartphone content apps.

Rakuten Sports will be viewable on smartphones, tablets, smart TVs and PCs, while pricing is yet to be revealed. It says the new service is designed to appeal to soccer fans in Vietnam, Singapore, Philippines, Indonesia, Malaysia, Cambodia, Myanmar, Laos and other countries in Southeast Asia, so Europe remains an afterthought for now.

It’s worth noting that Rakuten owns its own Japanese soccer team playing in the J.League, prompting concerns that content might be biased, which is a real gray area for the company in its early days. The popularity of J.League has been boosted by the arrival of superstar players, namely Spanish legends Andres Iniesta and Fernando Torres. It plans to introduce basketball, table tennis and other sports in the future, along with new user engagement capabilities like interactive features.

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