Full stream ahead

The economic crunch has worked in favour of sports streaming service Kayo – paid subscribers were up 14 per cent to 1.55 million in the past 12 months, overall ad revenues were up 4 per cent but digital ads lifted 20 per cent. 

Kayo is also pushing harder into personalisation as it delivers higher conversion results – Ogrin said Kayo was already moving from personalised cohort messages and offers to “hyper-personalisation” down to individuals.

But it’s Kayo’s utility status as a streamer in a crimped economy which Ogrin said points to a long growth cycle for the streaming service.

“What we certainly started to see as we were heading towards [last] Christmas was that Kayo and sport was becoming this discretionary spend item that if people couldn’t go out – if a family couldn’t go out and had to tighten belts – that sport is the great antidote for tough times. We saw it at Christmas and then when we got to the beginning of the winter code season in late February and it accelerated," said Ogrin.

"We could see a lot of the cohorts coming in of people that had been around in previous years, they were coming in and staying. We’ve seen our lowest pausing rates since the launch of the company. So when you take that position, you have to have high quality performance at scale – and we want to make sure that the customer experience is exceptional.”

In a quip on his streaming rivals like Netflix, Amazon Prime and Disney+, Ogrin said live streamed sport was “significantly more complex” than delivering traditional off-the-shelf library content. To ensure viewing performance was optimal for Kayo’s entire subscriber base, Kayo’s product team unscrambled every device in Australia with different processing powers and functional nuances – from Samsung and LG to AppleTV and all web browsers – and integrated it all into Kayo’s streaming delivery smarts.       

“By us actually really focusing on integration there and really making sure that the vision performance is actually consistent but tailored to each of those devices has been really the material difference in terms of getting people's satisfaction up,” he said. 

It's personal

Beyond the performance efforts, Kayo has seen sharp improvements from personalisation. 

“We've got an engagement platform that basically has all of the intelligence built in so that we can manage each cohort based on their journey,” said Ogrin. “Whether you're a new customer coming in, you're a paused customer that's reactivating or you’re an existing customer, we know exactly what you watch and we can tailor all our communications to you as a one-to-one customer.

"Now, we've taken the first mover on some AI capabilities that has actually then allowed us to take that down even further to a one-to-one customer relationship. And when you think of the economic conditions we're in, what that means is that if we can know what your wallet or your value is, we can actually identify that and provide value in a one-to-one communication. We're five years old so while we may have reported 1.6 million active customers, we've probably had upwards of 5 million people have come in and out over the last five years. So we actually do know if someone is coming back, we know their history – so you're adding a layer of detail around knowing what their prior history is. This whole idea of utility and customers coming in and staying all year round has just grown significantly.”

Ads booming

The ad tier introduced by Kayo to its streaming service has proven a boon. Subscribers have not been turned off – ads are never run during live play – and advertising sell-through rates have “been off the chart”. 

“When I talked about us investing in performance, what we also did was really invest in the quality of our dynamic ad insertion capability. So when you talk about people coming to a game at scale, one of the difficult challenges with sports-based dynamic advertising is being able to successfully serve an ad at scale all at the same time. That investment we did in the first six months has really sort of played into what we saw once the winter codes came on this year – advertising sell-through rates and delivery rates were off the charts for us and really turned it into revenue.”

Ogrin said ad revenues were contributing 10-20 per cent of average revenue per user [ARPU] and “it’s got further growth ahead”.