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Rakuten TV AVoD arrival sows seed for sports rights bonanza

Europe’s video market experienced invasions from contrasting corners of the globe this week as Tokyo’s Rakuten and San Francisco’s Tubi rolled out their respective AVoD platforms across the continent. While entertainment platform Tubi is targeting an early 2020 kids content launch, Rakuten has more immediate disruptive potential and apparently is a keen reader of Faultline.

Rakuten’s rise also signals good news for Nielsen, as provider of its targeted advertising platform, an important part of the deal we’ll touch on further down.

When the e-commerce giant launched its dedicated sports platform in its native Japan over the summer, Faultline questioned Rakuten’s ambitions by urging the company to bid for rights to make an audacious move into the European sports scene. Realistically, we thought it would be at least a year before Rakuten made any European sports entrance.

Rakuten TV, already a well-known SVoD platform in Spain and TVoD content provider in over 40 European countries, has now embraced AVoD, with a smattering of TVoD too (claiming to be the first platform in Europe to combine both AVoD and TVoD flavors). Along with a roster of Hollywood entertainment and local content, Rakuten TV’s prime selling point is its FC Barcelona exclusive documentary.

While this isn’t quite what we meant when cheering on Rakuten to challenge the established sports broadcasters and streamers in Europe, it is certainly a good start and sows the seed for bigger ventures. Of course, as a sponsor of FC Barcelona, this is a perfect base to build from.

Matchday – Inside FC Barcelona is the new insider documentary series about the world-famous Catalonian soccer club, offering previously unseen and exclusive scenes from players’ private lives. Narrated by John Malkovich, an interesting choice, the program is a creation of Barça Studios, FC Barcelona’s in-house production studio, in collaboration with Kosmos Studios and Rakuten.

While Rakukten’s ad-supported approach was a slight surprise, it’s true that the company’s European SVoD journey was largely stagnant until around two years ago when the Rakuten TV brand was born after inheriting the OTT video service Wuaki.tv. Rakuten TV has since amassed around 4.5 million subscribers across Europe, according to numbers from our research arm Rethink TV, which projects a healthy outlook for the service.

As for Nielsen, the audience measurement giant has been awarded the great honor of powering Rakuten TV’s foray into advertising with its DMP data management platform and was gifted a one-line mention in the official press release – an unfair amount of credit even for Nielsen.

Nielsen and Rakuten Intelligence have previously pooled resources for e-commerce data projects but, as far as we can tell, this is the first TV deal between the two.

Rakuten kicked off 2019 with big plans, proclaiming its intention to expand Rakuten TV from 12 to 52 countries worldwide, through integrations with smart TV makers Samsung, Philips, Hisense and LG. These manufacturers have installed a dedicated Rakuten TV remote control button, available in beta across these select smart TVs before landing on mobile devices and desktops at a later unconfirmed date.

As for video technology vendors, the vast majority of Rakuten’s technical operations in Japan are handled in-house, a luxury matched by its 4G and future 5G networks – harnessing modern technologies like the cloud-native 5G core.

Its European SVoD service, meanwhile, has a few notable vendors supporting it, now joined by Nielsen. 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.

All this could put Rakuten in good stead to profit from European sports, although Rakuten is unlikely to battle for rights to show Spanish La Liga content, the second most popular national soccer league, considering that the organization itself plans to launch an OTT service. La Liga hopes it can feed off its brand to nurture niche and grassroots sports with at least indirect revenue generating potential in future. Although the new service, LaLigaSportsTV, will support live as well as on-demand viewing, there is no immediate suggestion La Liga has any intention of going towards D2C for its live matches in the top divisions.

Even so, the news will send a chill among pay TV operators because it underlines the potential of less popular sports to prize open the linear pay TV armory and undermine the primacy of the premium assets. Rakuten will be taking notes.

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