Direct Sports Network wants to be the go-to destination for sports fanatics and is stepping up its game to reach more fans through its app-based streaming video service.
The Irvine-based sports media company said it will expand distribution this year with Samsung and LG to have its platform featuring team-specific apps integrated into their smart TVs. It also plans to boost the number of sports teams on its network, thanks to existing partnerships with National Football League, National Hockey League, Major League Soccer and others.
The Direct Sports app is already available on smart TVs by brands such as Sony, Sharp and Philips and on digital media players that include Amazon’s Fire TV Stick, Roku and Apple TV.
Unique
Founder and Chief Executive Richard Gillam said the company has a leg up on competitors because fans have access to exclusive team content.
“If you’re a Raiders fan, the only way you can see Raiders content through a device like Roku or Fire Stick is through Direct Sports Network,” he said. “We [upload] at least 30 to 60 hours a month of original programming [per team] and we are the exclusive distributor on these platforms.”
When sports enthusiasts select the free Direct Sports app on their TVs, computers or iPads, they’re greeted with a list of sports teams. A die-hard Oakland Raiders fan can select the Raiders DeskSite or channel and watch a round-the-clock stream of team videos ranging from one-on-one player interviews to game highlights—content created by the team.
The company has partnerships with NASCAR and more than 30 NFL, NHL and MLS teams. It wants to eventually broaden offerings to include e-sports and international teams for sports such as cricket.
But the company is facing stiff competition as new and old companies clamor for the attention of sports fans from digital media startups, such as subscription-based sports website The Athletic and Facebook, Amazon, Twitter and Google’s YouTube, which have been battling it out for sports rights as a way to boost users.
Courtney Brunious, associate director of the Sports Business Institute at the University of Southern California’s business school, said there’s a lot of innovation in the sports industry, especially when in digital content.
“You not only see leagues having their own digital platforms but third-party platforms coming online to push out sports content,” he said. “The field is so crowded for consumers, and there’s so many different ways they can find [information]. You really need to make sure that your content stands out from the rest of the crowd to get people to actually tune in.”
Direct Sports doesn’t stream live sporting events or produce original videos but said its value to fans is being the self-described Hulu of team-branded content.
Laced Up
The company’s model has caught the attention of sports and entertainment heavyweights and is backed by notable figures, including sports agent Leigh Steinberg producer and former president of the Academy of Motion Picture Arts and Sciences Sid Ganis and film director Peter Farrelly.
Gillam, a former Marine and day trader who started the company in 2011, changed the name to Direct Sports in 2016, and has raised $25 million, wants to raise additional capital this fall. He declined to share company revenue except to say it’s under $10 million.
The platform is ad-supported, but unlike other digital video streaming services, it caps its advertising load to less than 10% and shows users ads only after they’ve settled into the app.
“We track the amount of entertainment you watch—you can even turn off your TV and turn it on the next day—and you’ll only see ads after a certain amount of content has been consumed,” Gillam said, adding that it runs only one spot per commercial break.
He admits that running fewer ads limits its revenue stream but that it can charge a premium to advertisers because users are forced to watch the ads and can be targeted by age, gender and geography.
Direct Sports’ audience is 91% male, and 78% of viewers are 18 to 34.
“By running a lower ad load, at least initially, we are going to ensure a much larger adoption and quicker growth than if we simply saturated our viewers with too many ads in the early stage,” Gillam said.
But Brunious said the most interesting aspect of Direct Sports is its unique offering—something that could attract more fans.
“It’s curated and creative content from the teams,” he said. “That’s different than going to other sources, where you don’t have that direct access to team programming. That’s a bit of a differentiator … [and] separates them out from the pack.”
