Move over, ESPN. DraftKings has launched a new sports news and data app for its core fantasy sports fans. It’s one of the ways that the company plans to keep growing even as the fever pitch for daily fantasy sports comes back down to Earth in the wake of various legal challenges over whether in constitutes illegal gambling.
The app is a one-stop shop for NFL and fantasy sports data, with real-time feeds that the fantasy sports enthusiasts crave. Corey Gottlieb, vice president of new media and content, demoed the app at the Techcrunch Disrupt event in San Francisco on Monday. Boston-based DraftKings recently raised $150 million from Revolution Capital to fuel its expansion.
DraftKings was was founded in 2012 and it expanded rapidly as the daily fantasy sports market exploded. Seeking to get ahead of rival FanDuel, the company advertised heavily on TV, triggering various attorneys general to investigate the legality of “skill-based” fantasy sports betting. The legal rulings continue to grind forward, even as rivals such as Yahoo and ESPN — which both have real-time news in their fantasy apps — move into the market. And DraftKings is now moving in on their territory with its own expansion.
I interviewed Gottlieb at the Techcrunch Disrupt event in San Francisco on Monday. Here’s an edited transcript of our interview.
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Above: DraftKings event
GamesBeat: Did you have any big announcements on stage today?
Corey Gottlieb: There were two presentations. Jason Robins, our CEO, spoke this morning and did a full Q&A. Then Jason and I did a demo of our new app, DK Live. This is our digital equivalent of the Red Zone. It’s an app we want our users to use as a second screen when they’re consuming live games on TV. It delivers everything from customized highlight feeds to individual game play by play to breaking news and analysis. Pretty much every touch point that would be relevant to you as a fantasy user while you’re watching games on TV.
GamesBeat: How does this fit in the larger context of DraftKings history? How often are you releasing something like this?
Gottlieb: This is a major initiative toward the goal of becoming a sports entertainment company. We want to take advantage of the relationship we have with fantasy users, who we know are highly engaged sports fans. They’re consuming lots of content in real time as they watch games.
One of the experiences we want to expand on is delving more into a range of touch points beyond just drafting lineups. Where do users consume news? Where do they consume stats? How do they track their players in games? Where do they watch video? All those things are a fundamental part of how I consume as a sports fan. We feel like we can take advantage of our relationship with the fantasy consumer to deliver that stuff, as well as being the destination for drafting your lineups.
GamesBeat: Daily fantasy sports had its big hiccup. How do you put that in context? What’s been happening ever since the issues with the Attorney General and so on?
Gottlieb: This is something we would have done regardless. For DraftKings to grow, we all want to focus on how we shift into the world of sports media consumption. This was on our radar, growing as a content provider and becoming relevant in this space—I was brought in to help pioneer this well before anything happened that you’re describing. Our expansion into this world is a natural growth point for us, agnostic of anything else happening in the industry.
GamesBeat: Today, at least, you don’t want to be in ESPN’s shoes because of an outage with its fantasy app on the first Sunday of NFL season. But is the strategy to become something like that someday?
Gottlieb: I don’t think it’s necessarily about being anybody. It’s about creating great experiences for our users that are natural fits, naturally peripheral to what they’re already doing as fantasy users. It’s less about who we can compete with or which components of the industry we can disrupt, more about what would be a great add-on for our users as they become more loyal to us.
If you think about drafting a lineup as the innermost circle, and then consider the circles that ripple out from there, sports media consumption ripples out naturally. It’s less a consciousness of who we’re competing with and more a consciousness of the greatest value add for our users.
Above: DraftKings.com has daily fantasy sports competitions.
GamesBeat: What’s the state of your core business, daily fantasy? Is it becoming harder to do at the scale you guys have reached?
Gottlieb: Here’s a good example. Week one of the NFL season, that’s like Christmas for us, or Black Friday. Week one, with private leagues – the things where people just say, “Hey, let’s play together,” which are rarely where we see a lot of growth coming – that was triple what it was in the first week of the season last year. As we continue to evolve as a company, we’ve learned that a big emphasis our users want is just playing with their friends. That’s the number one thing. It’s social for them.
We introduced this leagues product for them a few weeks ago that makes it easier for people to form a league with their friends. That’s skyrocketed. It’s a sign that we’re headed in the right direction.
GamesBeat: How penetrated is the space, would you say? The U.S. has 50 million daily fantasy sports players. 200 million people watch the NFL and all kinds of other sports. What do you think as far as how much progress your industry has made as far as reaching all those people?
Gottlieb: Clearly we’ve reached a captive audience. When we look at the folks using DraftKings, the engagement numbers are through the roof. I’ve worked at a lot of other media companies and publishers before. Looking at metrics like time on site and pages viewed, it’s incredible to see what a DraftKings user does when they’re engaging with the product. Clearly there’s penetration in that the overwhelming feedback we see and the engagement metrics we see are super positive for our users.
That said, as you described, the addressable market goes well beyond the users we have right now. That’s why I think folks are super excited about the space. So many captive users of fantasy and captive sports fans are out there. The ceiling for our business is astronomical.
One of the other elements of business we’ve focused on a lot in the past year is thinking about how we can not only function as a daily fantasy contest operator, but also how we can leverage our platform to create great brand relationships. We did a paid sponsorship deal with Paramount in part of their campaign for the new Jack Reacher movie. They came to us and said, “Look, we know you have a super engaged audience, a highly identifiable and highly attractive demographic. We love what your brand is doing. How can we work with you to create a custom, unique brand partnership?”
Our major free contest on the site yesterday was sponsored by Jack Reacher. It had all these bells and whistles and assets that were tied to that sponsorship. It was an example of a great brand, a studio brand, tapping into our engagement to create value for our users. It’s a contest that wouldn’t have existed had they not done it. It’s a major opportunity for us, leveraging our engagement and the unique value add of our users to work with premium brands who can add even more value.
About 500,000 people played in that game. It’s the biggest free contest we’ve ever run. The engagement is amazing to see.
Above: DraftKings has mobile and PC experiences.
GamesBeat: How do you reach those remaining players out there? Is TV still a good way to do that, or are there better ways now?
Gottlieb: We’re constantly learning about the most efficient ways to market, and learning about our users. The more we learn about our users, the more efficient our marketing becomes. Any company can tell you that. We learned a lot last year. We’ve learned a lot already this year about the best way to reach folks. We do that through both traditional means, things like TV, and more and more through channels like social media and retargeting. We can reach a really drilled-down audience through tools like Facebook and Twitter. Because our traffic is heavily app-based, we can use lots of tools, whether it’s push notifications or in-app pops, to reach a highly targeted demographic and talk to our users in a way that feels increasingly efficient.
GamesBeat: Is there anything else that you’d like to share as far as what’s happening right now?
Gottlieb: Our original content strategy is another important subject. This app is one example of how we engage users in a different way and expand on how much of the sports fan life cycle we’re capturing. Another way we do that is through the creation of more entertainment-focused original content pieces.
Over the course of the last year, we’ve worked with a big slew of major talent and athletes, everybody from Odell Beckham Jr. to Ronda Rousey to Rob Gronkowski to Von Miller to Danica Patrick to DeMarcus Cousins, creating probably a dozen or more original video series, all of which have gotten major national pickup. ESPN, Sports Illustrated, Rolling Stone, all these outlets have picked up and run with our original video. It’s had massive engagement on social media. It’s another way we think about expanding our brand, becoming an original video creator ourselves.
GamesBeat: What’s the state of the competition as far as who matters in this space? It seems like an arena of giants right now.
Gottlieb: There’s a few different ways to think about competition. You can start at the innermost circle, other folks in the daily fantasy space. You can take one more step outside and consider folks in the fantasy space more broadly. Another step outside of that and you have the sports media space. Another step outside that is the entertainment space in general. Obviously we identify ourselves within every one of those circles. But we’re thinking less and less about what everybody else is doing and more about what we can do to engage with our users. That shows in the response we get with our products.
GamesBeat: Does it feel like the market growth is in some ways different this year compared to past years and seasons?
Gottlieb: We have a strong core group of users. That’s what we’re seeing. Last year was sort of our coming-out. Most people had never heard of DraftKings. We had a really broad-based approach. We wanted everybody to know about DraftKings. Mission accomplished.
This year, everybody already knows about DraftKings. Our approach, both in advertising and in activation, is much more targeted at people we know are interested. We want to keep them engaged. People who only played in the NFL season last year, but didn’t play in baseball season, we want to get them back. We want to show them the new DK Live app. We want to get those users to utilize every aspect of what we do.
This is all part of the big plan. We’re right on track. We don’t need to talk to the universe again. We’ve done that. Now you’ll find us being much more selective and targeting audiences that are either already playing with us, but only maybe for one sport, and then looking at other people who—maybe they play fantasy sports, but not daily fantasy. Maybe they were left out of that fantasy office pool, but they love sports. This is way they can either play with their friends, or if they don’t have a core group who’s into the same sports they are, they can play with people online. You’ll see us growing in that targeted way, as opposed to trying to talk to the universe.
Above: DraftKings is doing live sports now.
GamesBeat: It’s that cycle of engagement, retention, lifetime value.
Gottlieb: That’s well said. We’ve added a bunch of sports, too. When you look at the sports we have–people think of us maybe as focused on football, but we have baseball and basketball and golf and hockey. These are all very strong sports for us. Even MMA. There’s a passion for these sports that hasn’t fully translated into daily fantasy yet.
If you think about football, people know how to play fantasy football. Most people who are passionate about MMA probably still haven’t played fantasy MMA before, in any context. That’s a whole new world that hasn’t been tapped yet, and now we’re going after it. We’re also tapping into that internationally. It’s been a big point of growth for us over the last six months, taking our product and putting it into the hands of people who aren’t in the U.S. We’re tapping into sports they love. Now that everybody in the world knows who we are, we need to make sure we have traction in the right markets and we can really grow.
GamesBeat: Are there any particularly unusual places you could go, like esports?
Gottlieb: We’re already there. We have daily fantasy for esports. There’s a super engaged community around esports. It’s a natural fit for daily fantasy.
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