Will this become the Netflix of sports?
Sports media company Perform Group is taking steps to launch a livestreaming sports service, saying it is positioning itself to become the "Netflix of sports."
The yet-to-be named subscription product, which will launch in 2016, is an over-the-top service that will allow users in Germany, Japan, Switzerland and Austria to livestream sports games and original content from teams around the world for about $10 a month.
"The focus is on making it very simple for users to subscribe and watch, independent of the time of day," said CEO Juan Delgado.
Perform Group has already secured rights from major international soccer leagues including La Liga, Bundesliga, Serie A and Ligue 1, as well as the NFL. It will also produce in-studio shows hosted by former sports stars. Delgado said it assured minimum revenue guarantees to rights holders and will split revenue based on usage after minimum commitments are met to cover overhead costs on technology and marketing.
Delgado said it was particularly interested in Germany because its main sports media provider, Sky Germany, had a low penetration level in households. In Japan's case, he said citizens are hard-pressed to find one cable or satellite company that can provide access to multiple sports leagues.
The company plans to add more leagues and markets in 2017. Delgado did not rule out the possibility of offering the service domestically in the future.
"Once we prove our ability to launch a service and acquire a user base very similar to how Netflix has rolled out in a few years, we will be seeking similar opportunities elsewhere," Delgado said.
The NFL previously told CNBC that one of its major initiatives was to expand its international audience. Its Oct. 25 London game between the Buffalo Bills and Jacksonville Jaguars will be globally livestreamed through Yahoo. The league added that it saw massive fan base growth in Germany, China, Japan, Australia and Brazil, and was looking to bolster its offerings in those areas.
"We think it's a great opportunity in Eastern Europe, Asia and Australia to have that game at Sunday night in prime time and to have that attractive window to watch live," NFL senior vice president of media strategy Hans Schroeder said earlier. "(International) is a big priority across the league now."
The service will be run through Perform Group's proprietary platform, which currently hosts its 12 digital media companies including Sporting News and Goal.com, and reaches 200 million unique users per month. It also tapped former Netflix vice president of marketing in Europe Ashley Wirashinha and ex-Amazon principal product manager for Amazon Instant Video Ben Lavender to run marketing and product respectively.
Delgado did not disclose how much the project was costing, but said the marketing budget was in the high eight figures.
"I think ultimately consumer habits are changing," Delgado said. "You read all the cord cutter coverage that gets in the U.S. and the position which ESPN might supposedly be under. The leagues are ultimately worried about delivering content to their fans."
Rick Burton, a sports management professor at Syracuse University, said the deal was not surprising at all, considering the progression of digital content taking over. Not only is streaming a cheaper option, it's easier to get content into households since it doesn't have to rely on cable hardware.
"Cable is an obsolete concept," he said. "I'm not anticable. But it's molecules, and you have to send stuff down the pipe. Most companies around the world, they haven't gone through the trouble of laying down the pipe and get stuff into people's house through routers."
He added that since the NFL is the largest sports organization in the U.S., it has the ability to experiment and be the first in the digital market. However, it faces challenges since football isn't played internationally.
"(The NFL) has got to be in on the bleeding edge of transition," Burton said. "They don't have the benefit of youth participation in most international countries."
He was also was a little hesitant to say that the service would make it domestically, considering the fact that the U.S. is not as technologically forward as other countries that are mobile first.
"We have a tendency to continue to commit to our big TVs, flat screens and 3Ds as opposed to our devices," Burton said.