Backed by an estimated budget of $10 million, New Zealand Rugby’s content streaming platform NZR+ launched in early August with ambitious plans to ultimately win five million registrations.
Offering a mix of behind-the-scenes content, repackaged archival footage and in-house interviews with star talent, NZR+ made a strong opening play with its exclusive documentary that chronicled the dramatic events of 2022 in which two assistant All Blacks coaches were sacked and head coach Ian Foster came perilously close to suffering the same fate.
There was an authenticity to the player testimony, with Newstalk ZB’s Elliot Smith writing in the Herald: “The All Blacks series immediately promises, via Richie Mo’unga, that people need to know the truth about their 2022 season.
“Do we get it? Mostly. Remarkably for an in-house production, the content feels honest.”
But two months on, and the enormity of the challenge, and risk, that New Zealand Rugby (NZR) has taken by committing to being a content player is starting to be realised.
The Herald understands that the new channel won only a fraction of the followers it was hoping to snare during the World Cup, and now faces a prolonged period in which rugby will be on a summer hiatus and the All Blacks won’t play again until July next year.
Several people with knowledge of NZR’s aspirations have said that the hub was launched with the goal of having one million users by the end of the tournament, but it is believed that registrations were sitting at about 60,000 in the week before the quarter-finals - although they will likely have been boosted by the All Blacks making the final.
The lower-than-expected uptake comes despite rugby being front and centre of the global sporting landscape and after NZR invested heavily in World Cup-themed content: Tour de Rugby, featuring film director Taika Waititi, and the Front Row Daily Show hosted by former All Blacks George Bower and Andy Ellis.
Tour de Rugby’s first episode has generated 200,000 views on YouTube, while some early episodes of the Front Row Daily Show had audiences of 60,000 on the same platform, but neither has proven particularly strong at driving the audience back to NZR+ and capturing them as registered followers.
NZR+ has been set up as the first major initiative since US fund manager Silver Lake bought a stake in the commercial assets of the national governing body.
The direct-to-consumer platform sits as the main piece in Silver Lake’s investment thesis that it can find millions of new All Blacks fans, better connect them with the team, and ultimately find ways to monetise them.
Currently free to access, NZR+ is aiming to become a hub that will provide greater insight into the teams, the game and the personalities.
NZR+ is therefore seen as a critical indicator of both the potential power of the All Blacks brand and the viability of Silver Lake’s revenue growth blueprint.
Initially, the return on investment will come from the data it will collect by asking people to register to access, and from the brand value it will be able to extract from the audience growth it is anticipating.
NZR chief executive Mark Robinson says that he is taking a long-term view with NZR+ and that he remains confident that its content hub can be the central pillar in its quest to win and engage new fans and grow the profile of teams in black.
He said: “We are happy with how NZR+ is tracking and very pleased too with how our NZR+ content is engaging fans across the other platforms we are making it available on.”
But despite Robinson’s confidence, the viability of NZR+ is being challenged by production costs, a marketplace that is more crowded and competitive than anticipated, and a strained relationship with the All Blacks, which is making it hard to gain quality access to the players.
While NZR is believed to have made $10m available for NZR+, analysts with knowledge of building similar sites estimate the set-up and licensing costs will have come in at around $500,000.
NZR is likely to have spent more than $1m producing the Front Row Daily Show, with 15-20 crew having been in France working on the show for the duration of the tournament.
It’s likely to have spent a similar amount on Tour de Rugby and therefore, on the numbers the Herald has been told, NZR is currently spending about $33 to win each registration.
At those costs, it will have to spend $33m to reach its target of winning one million registrations, and $165m to get to the longer-term goal of five million. This is the issue for NZR: that it is burning through cash yet seeing little return for it - but its streaming platform is at the core of its fan engagement strategy and so Robinson says the plan is to keep spending on content and hope the growth picks up.
It is also hoped that when new All Blacks coach Scott Robertson takes over next month, NZR+ will secure better access to the players and coaching staff.
The Front-Row Daily Show team were kept at arm’s length by the All Blacks in France, primarily because, as the Herald understands, no one was able to give the team a clear strategic vision for NZR+ prior to the tournament and what sort of content and access it would be looking for during the World Cup.
As a result, NZR+ was regularly forced to attend press conferences alongside all the other media outlets to gain access to players.
But the bigger barrier to NZR+ achieving its goal may prove to be the presence of RugbyPass TV, which also launched in August this year and is believed to be on track to have one million registrations by the end of the year.
The reasoning behind NZR owning a content hub has always been sound and strategically astute. But with NZR+ battling for traction, what may come back to haunt the national body is its decision to build a new site from scratch.
NZR+ currently sits in the death zone for media start-ups - where it has limited inventory, high production costs, no revenue streams and a small audience.
World Rugby, on the other hand, opted to enter the streaming market via an acquisition - buying the global content site RugbyPass from Sky TV earlier this year.
RugbyPass, which was set up by Kiwi Tim Martin with investment from former Lion executive Peter Cooper, was bought by Sky in 2019 for US$40m ($68m).
Shortly after buying it, Sky closed the streaming service and ran it as an editorial content site only.
By 2021 Sky, in which NZR holds a small shareholding, had written down the value of RugbyPass to $6m and earlier this year, it announced that it had sold the site to World Rugby as part of a transaction to gain the World Cup rights for the next four tournaments.
Sky has been NZR’s exclusive broadcast partner since 1996, but the sale of RugbyPass is believed to have surprised the national body, as did the buyer, as it signalled that World Rugby was setting itself up as a content player and going head-to-head with NZR+ with similar ambitions.
And two months into their respective battle for audience, RugbyPass TV is enjoying strong and consistent registration growth in line with forecasts, has revenue streams attached to its content, and has been able to build an extensive inventory on the back of the archival rights it owns.
“The RugbyPass acquisition was strategically important to us for a number of reasons,” says James Rothwell, who is World Rugby’s chief content officer.
“One, you are buying a built-in audience. You are buying a brand. You are immediately creating an editorial arm within a business that previously didn’t have one and I think that is an accelerator to us creating more opinion and news and it also gave us a network of great rugby talent with us to partner with,” Rothwell said.
“And it gave us a lot of internal capability. In the acquisition, we brought over some incredible editors, journalists, videographers, social managers.
“World Rugby would have launched a streaming business, with or without RugbyPass; doing so under a brand that has an eight-year heritage with streaming, with fans, it is compelling.”
Rothwell says that the site is already being monetised as the family of World Cup sponsors was able to advertise through the tournament, and now that is over, a sales team will look for investment from brands keen to capture a strong rugby audience that will be in the hundreds of thousands.
But perhaps where RugbyPass has its greatest advantage over NZR+ is in its ownership of a significant portfolio of live rights - including XVs and Sevens, male and female as well as Under-20s - and in its clearly-defined content strategy, which is built on the wider theme of contemporising coverage of the game, using a touch of irreverence to engage younger audiences and trying to make heroes to capture the imagination.
One of the big hits for RugbyPass TV has been the Big Jim Show, hosted by former Scotland lock Jim Hamilton, who has managed to gain access to an all-star A-List cast throughout the tournament, having conducted pre-match live shows with gusts such as Hollywood actors Javier Bardem and Gerard Butler as well as Irish TV star James Nesbett and former Brazilian footballer Roberto Carlos.
“If you look across all the programming we are doing, it feels young, creative, entertaining and has less of a filter,” says Rothwell.
“It is the new identity for rugby and we think that is exactly what the sport needs, to engage casual audiences that are coming for this World Cup and to drive more engagement.
“Rugby is the ultimate team sport and part of that has a culture that favours teams over individuals. It is a true differentiator for rugby. That said, rugby has stars and needs more stars and if you look at trends like football and basketball, younger audiences are starting to follow players more than they are following teams. I believe that rugby can achieve the same thing.
“I think it is really important that players can express themselves, build a media platform and have an outlet to engage fans within a high-performance environment.”
Neither NZR+ nor RugbyPass TV believe they are in a content war for the global rugby audience, but in a niche field, it is hard to believe they can both fulfil their aspirations of each having millions of followers.
For NZR+, the battle it faces looks difficult to win without considering a major change in strategy and offering fans paid access to watch All Blacks tests.
Robinson, though, says: “The NZR+ app and content is free, and we have no immediate plans to change that - our focus for now is building scale.”
But without any current revenue streams and registrations slow to come, NZR+ could burn through its $10m budget without building the sort of audience it will need to be attractive to advertisers.
It hasn’t built cult offerings in the way RugbyPass TV has - shows that can also be monetised through sponsorships - and nor does it have an existing sales arm through which it can sell advertising.
It’s also unlikely, given the power of platforms such as Netflix, Amazon Prime and Disney Plus, that NZR+ would be able to lure paid subscribers with its current content offering.
But there will be two risks involved in NZR+ broadcasting live rights. The first is the cost implications it would have as Sky chief executive Sophie Moloney has already said that should the next broadcast deal see a co-exclusive offer put on the table, then it would ultimately lead to the current rights holder paying less than the $100m a year it currently does.
And secondly, NZR would have to determine whether it would be financially better to continue with Sky having exclusive rights within New Zealand and only make test coverage on NZR+ accessible to offshore territories.
But former Sky chief executive Martin Stewart told the Herald in 2020 that it would be hard to sell just All Blacks content to an international audience, and the potential cost of streaming games against the likely audience may not make this strategy financially viable.
“The All Blacks brand is massively important,” Stewart said. “They are the most famous rugby team on the planet. But the Six Nations outranks Sanzar on pure eyeballs in other territories.
“You need everything. It is not just one thing that helps grow rugby - you need to have all those teams, all those leagues together.”
It has been a slow start for NZR+ and perhaps a sobering realisation of how ambitious Silver Lake may have been in forecasting its ability to monetise new All Blacks fans.
Gregor Paul is one of New Zealand’s most respected rugby writers and columnists. He has won multiple awards for journalism and has written several books about sport.
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