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DraftKings (NASDAQ: DKNG) could be the next entrant into the streaming entertainment wars, as the gaming company is said to be readying a sports streaming service.
The service could launch over the next several weeks. Unidentified sources with knowledge of the matter told Bloomberg that DraftKings’ streaming offering, which will feature podcasts produced by the company and other original content, will be free and generate revenue via advertising.
Over the years DraftKings has expanded our media footprint by securing top talent and trusted personalities across sports media, and we’ve begun the initial rollout of DK Network,” according to a statement from the sportsbook operator provided to Bloomberg.
News of DK Network arrived about two years after Wall Street analysts speculated DraftKings made for a sensible addition to the ultra-competitive streaming entertainment arena.
DraftKings Has Goods to Be Streaming Player
DraftKings’ plans to roll out a streaming platform come just months after rival FanDuel introduced its own network and a streaming service of its own.
Boston-based DraftKings already has some pieces in place to make for an economical, efficient entry into the streaming industry. In 2021, the sportsbook operator signed a $50 million deal with Meadowlark Media, the owner of Dan Le Batard’s network of shows. Prior to that, it acquired Vegas Sports Information Network (VSiN) and hired former Verizon executive Brian Angiolet to run its media arm. Last year, Stacie McCollum, a former ESPN executive, joined DraftKings as head of programming.
In that same year, DraftKings launched a channel on the SLING TV streaming service after notching a similar accord with DISH Network.
The virtual multichannel video programming distributors business (vMVPD) industry provides the added allure of revenue stream diversification. Currently, online sports wagering, internet casinos, and daily fantasy sports (DFS) are the primary drivers of DraftKings’ top line.
In the sports streaming industry, the undoubted leader is ESPN+. After launching in February 2018 with one million subscribers, ESPN+ had 24.9 million subscribers as of the end of February. However, that’s a fee-based service, meaning DraftKings wouldn’t be in direct competition with that Disney offering.
Potential Benefits of Streaming for DraftKings
DraftKings could wring a variety of potential benefits from its streaming platform, including leveraging it as a cost-effective customer acquisition tool. Sports wagering companies are under pressure from the investment community to reduce promotional spending — the common way of wooing new clients — to focus on profitability.
An in-house streaming service could also reduce DraftKings’ external marketing expenditures, including partnerships with professional leagues and teams and traditional media networks.
A streaming platform could also open the door for DraftKings to command advertising revenue from companies targeting millennials and Gen Z that are already established in running ads on digital and streaming services.