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As part of the series of events hosted by The Birkbeck University Sport Business Centre, a seminar by Sheridans Sports Group of the well-known Sheridans Law Firm, Lawyers Chris Paget and Jonny Madill shared an insight into the opportunities and challenges for the sports industry in the digital age.
The digital age is an area with enormous opportunities. All corners of the industry are in touch with digital. Whether it is stakeholders such as media rights holders, clubs and sports organisations or governing bodies in the sports industry.
A key term which is unavoidable in relation to the digital world of sports is fan engagement. Chris and Jonny emphasise that the focus should not only on fan engagement from a club to fan point of view, but also from commercial and business engagement in the digital world.
HOW DO FANS CONSUME SPORTS CONTENT
The way fans consume sport has changed due to the digital migration of the main stakeholders in the sports industry. The key now is how to adapt and adjust to it. They shared some numbers to get the audience into context of how exactly we, as sports content consumers, have changed.
Seventy per cent of the people who attend a live sports event use a mobile device during the event to engage. Some get updated on scores of other matches, some will go online to view a replay of an incident and some will engage with their social networks via different platforms regarding the event they’re attending.
Eighty-seven per cent of sports fans are second screening while they are watching a live sports broadcast. It does not end with second screening and some fans are triple screening or even multiple screening.
In the UK & Ireland there is an average of 4.6 connected devices per household.
Chris and Jonny suggest that the digital engagement can be referred as a disruption to the way the traditional production of content and its consumption now has to be monetised and engaging in a different way.
They identified three factors that cause this disruption:
1. Shift of viewing behaviours
2. Change in the media rights landscape
3. Introduction of new technologies.
A wide share of the sports consuming audience nowadays can be defined as a mobile-first generation. Meaning this is an audience that will reach first to a mobile device to engage with sports rather than tuning into a TV broadcast. The audience is more tech-savvy than ever before.
We are starting to see an abandonment of live TV broadcasts in the major sports competitions. The audience figures of the Premier League are down by 11%. In the NFL the viewing figures are down by 10%.
The rise in streaming and OTT as means of consuming sports events are contributing factors too. TV broadcast may not be on the way out yet but it is changing and we access it new way.
For example, Real Madrid had a very established TV channel and opted to Facebook to stream 128 events. Another example is that Roger Federer streamed one of his training sessions.
The dominance of Millennial and Centennial audiences are driving the digital age. We are no longer satisfied with pre and post sports content.
EVER-CHANGING MEDIA RIGHTS
Our change as consumers is bringing the new concept of media rights and fan engagement. Value of rights continue to increase. The NHL deal is up 103% since last year and the Bundesliga deal is also more valuable. However, viewers are dropping.
As a consequence, we see that content that needs to be paid for is becoming free. BT Sport broadcasted the last Champions League final live on YouTube.
Media rights should be looked from a socio-political context too. By 2018 European’s will be able to consume content anywhere around Europe without location restrictions.
Non-broadcast media outlets are perceived as personalised broadcasting experience. The NFL made deals with Yahoo and Twitter. Twitter paid $11M for 10 games on a Thursday night. The demographics behind these media outlets are interesting and shows that 55% of viewer were under the age of 25.
Looking at other entertainment industries. Netflix began as provider of content but as it grew it began to produce its own shows.
The digital age promotes lower tier sports. 2.2M unique viewers were watching a table tennis match via The Sport Bible. Table tennis in the UK is one of the top participating sports, but as a governing body it struggles to engage with a young audience. That stream helped it reach the younger audience.
Manchester United launched a new premium streaming app to expand its global fan base even more and made it available in 160 countries but not in the UK.
Getting on TV has been the holy grail for many sports, well not anymore.
Broadband speed has improved and allowed the new digital streams to operate. The increase of free WI-FI in public locations is another contributor, and when it comes to stadiums the USA are ahead of Europe and the UK. The quality of cameras in our smartphones is driving us to engage even more leading to individual fans becoming media rights holders. Whether the last is legal it belongs to whole discussion by itself.
WHERE DOES IT LEAVE THE INDUSTRY?
It is important to mention that an opportunity for one stakeholder is a challenge for another. The new way of sports consumption can be more beneficial in the short term for lower profile sports and competitions rather than the more established ones.
Eventually, engagement per say is not valuable without monetising. It takes time to build loyalty and convert it to revenue.
The online space is saturated with content providers. How does a business stand out from the rest when it is approachable to everyone? Issues of tackling piracy and protection of content are there too. The stakeholders that incorporate piracy actions and are proactive are the ones who survive.
WAYS OF DRIVING ENGAGEMENT
Quality content: exclusive behind the scenes and training content has emerged and there is demand.
Social media: Success of Instagram and Snapchat from a brand ambassador’s perspective(players)
VR: 2017 could be the year it takes off as a fan engagement tool. Football clubs are launching VR match day apps. This is a huge opportunity for rights holders and sponsors to make money through brand activation
Media rights strategy: Exploring opportunities for more media rights partners.
Data: without it the digital wouldn’t exist, match content data is established. User analytics is key for understanding your audience and how to engage with it.
Sponsors: Needs to have a strategy of activation. Budweiser was the official partner of ITV sports for highlights clips during Euro 2016.
Focus around key events: Season long engagement is becoming increasingly difficult. Right holders are trying to develop engagement with key moments of brand activation. Nissan and Super Sunday for instance.
Brand ambassadors: leverage your players and athletes. The MLS gained traction in a saturated market by sharing exclusive interviews with players and managers.
Ticketing: potential revenue stream.
E-sports: There are two approaches to enter. One is setting up an online competitive league, allows a marketing and PR drive and can help a business reach a younger audience. The second is the bold approach, acquire an E-sports team. The Philadelphia 76ers and Schalke 04 went for the bold approach.
Media rights agreements: New deals will have to be drafted in way that takes into account technological issue.
Unauthorised content and anti-piracy: It is inevitable and business have to be prepared
Expansion vs exploitation: protect your brand while making it grow.
Data protection and data privacy: these are critically important. The inclusion of safeguard mechanisms of sharing and storing data is vital.
The digital disruption is here to stay and will continue to evolve. The leverage of new technologies is a must in order to stand out. Engagement is nothing without monetising. While it may sound strange, there is no such thing as digital strategy and it has to be inclusive within the existing strategy of fan engagement.
One thing to look out for is whether the sports industry can keep pace with the technological development and consumer trends.
Follow Chris and Jonny on Twitter:@jonnymadill89, @paget_chris.
For additional reference, you can also read the article by Jonny Madill entitled “Driving fan engagement in the digital age: what digital disruption really means for sport”
This article was written by David Haimovich, Marketing Assistant at the Sports Business Institute Barcelona. If you have any comments or questions about this post feel free to contact him at email@example.com. You can also follow him on Twitter at: @HaimovichDavid.