09-06-2015, 12:01 AM
As a Yahoo Fantasy Football player for past 10 years, there are rumors that they are completely revamping their Fantasy Sports sites (which saddens me), and are going for the Daily Fantasy Sports (aka DraftKings and FanDuel), which will bring in a new revenue stream.
Here's a Forbes article published in April: http://www.forbes.com/sites/marcedelman/...y-pricing/
Here's a Forbes article published in April: http://www.forbes.com/sites/marcedelman/...y-pricing/
Quote:In what could be extremely exciting news for the daily fantasy sports marketplace, Yahoo announced today its planned entry into daily fantasy sports.
Yahoo’s planned entry into the daily fantasy sports marketplace is good news for consumers in that it restores a third major player to the market. Daily fantasy sports participants have not seen true competition for market share since July 2014 when DraftKings, the market’s second largest player, acquired DraftStreet, the market’s then No. 3 player.
With Yahoo’s planned entry, Yahoo could provide a real challenge to the market share of FanDuel and DraftKings, thus creating true price competition. While Yahoo is far newer to the marketplace than the other two companies, it does already have a strong fantasy sports and search business that could easily drive traffic to its games.
Yahoo’s jump into the marketplace also likely means that its chief rival in the full-season fantasy football market, CBS Sports, is likely not far behind.
Until now, companies such as Yahoo and CBS Sports had stayed on the sidelines of the daily fantasy sports market due to the heightened legal risk. But with this marketplace now operating in some form or another since 2007, one could make the reasonable conclusion that the risks seem manageable if carefully navigated.
Of course, there are still some very real marketplace risks to daily fantasy sports in some formats and in some states. Thus, Yahoo would be wise to limit eligibility to its daily fantasy sports contests beyond just the five states in which it currently blocks its full season games. Among others, Arkansas, North Dakota and Tennessee seem to be higher risk states of operating daily fantasy sports contests.
Yahoo may also wish to avoid offering contests ‘played against the house’, and to devise real ways of monitoring user age, location and addictive gambling behavior — all topics that merit careful scrutiny as states begin to review their own laws vis-a-vis daily fantasy sports.
But in any event, Yahoo’s intended entry into daily fantasy sports could mark a very real change to the power dynamics within daily fantasy sports. As in any industry, three or four major competitors is far more favorable for pricing structure than just two large companies. And while there are many businesses currently trying to offer daily fantasy sports, not many have the funding of FanDuel and DraftKings, especially after their recent partnerships with pro sports leagues.
It will be interesting to see how Yahoo’s planned launch unfolds and how Yahoo manages the ongoing state and federal law risks of operating daily fantasy sports contests.
But for consumers, Yahoo’s entry seems like a good thing.
And with Yahoo now entering the marketplace, perhaps there will be more new entry into the daily fantasy sports market — perhaps from CBS — not far down the line.