By @jonnymadill89 of @sheridanssport
Everyone is talking about the digital disruption of sport. Sports stakeholders are on a journey of digital migration. The industry is in the midst of a digital revolution.
But what exactly is meant by these concepts? How do we break down and properly understand the notion of digital disruption, and its impact on the future of the sports industry? What are the resulting opportunities and challenges for rights holders, broadcasters, digital media companies, brands, consumers and other stakeholders within the sports ecosystem?
This piece aims to unpick these and other issues and, by doing so, explore perhaps the biggest transformation the sports industry has undergone in recent decades: digital disruption.
How do we as fans consume sports content?
Perhaps the best starting point is to consider ourselves not just as sports fans, but as consumers of sports content. We all access, consume, and engage with, sports content on a daily basis, in a myriad of different ways, and for many of us on an ‘anytime, anywhere’ basis. The means by which we are consuming this content, however, is radically changing.
It is reported that 70% of modern-day fans as well as bring a handheld device to a stadium, ground or arena, intend to use that device throughout the course of the 70, 80 or 90 minutes, or however long the sporting action in question lasts. Additionally, 87% of us reportedly ‘second-screen’ when watching a live sports broadcast, many of us doing it without even noticing. ‘Second-screening’, the concept of engaging with sports content using two devices at the same time, has become the norm. This might involve anything from watching video replays of incidents, checking live scores from other games, downloading stats and data analytics, or engaging with our network on social media platforms.
|70% of fans use a device to engage with content at a stadium/venue
87% of fans “second screen” when watching live sport
Amount of sports content has increased by 150% in last 5 years
4.6 connected devices per household in UK/Ireland
|How do we as fans consume sports content?|
One way of defining the notion of the digital disruption of sport is that the traditional means by which sports content is produced, distributed, consumed, monetised, and engaged with, is being ‘disrupted’ or revolutionised thanks to the digital transformation around us. This radical change can be explained by three broad, underlying factors:
Firstly, a shift in the viewing behaviours and consumption habits of modern-day sports fans.
Secondly, the ever-changing media rights landscape and the proliferation of digital media.
And thirdly, the emergence of new technology which can be leveraged to create unprecedented levels of engagement.
Considering each of these in turn:
A shift in viewing behaviours and consumption habits
The modern-day sports fan is part of a ‘mobile-first’ and digitally native audience which is more tech-savvy than ever before and which is abandoning the TV screen at a growing rate.
Many talk about the emergence of not just the ‘millennial’ but also the ‘centennial’ audience; the latter in particular is part of a demographic which has grown up in an age of on-demand, mobile and digital media as opposed to traditional broadcast methods.
We also now see a consistent demand for 24/7 access to sports content and even more personalised experiences with our favourite players, teams and sports than ever before.
In addition, fans are no longer simply watching sport; they are engaging with it by creating content, too (whether it be by sharing videos, photos, social media posts and blogs, and even live video streaming). Fans nowadays have the capacity to become media owners and broadcasters in their own right. In so many ways, therefore, it is them who are driving the disruption.
An ever-changing media rights landscape
The shift from traditional, linear sports broadcasting is ongoing and gathering pace. This has been caused not just by the changing attitudes of a millennial and centennial audience, but also by the exponential growth of digital platforms as a means of consuming sports content.
The emergence of user-generated platforms as content providers has been instrumental. Facebook, Twitter, Instagram, Snapchat and others provide platforms offering exceptionally in-depth and innovative content which is both incredibly accessible and crucially, user-generated. The emergence of live video streaming content on these so-called ‘non-broadcast media’ is another growing trend; fans can integrate these live streams into seamless, coherent and personalised viewing experiences, unlike mainstream broadcasters. These are platforms which offer much more personalised ways of watching live sport.
Emergence of new technology
The reality is that the digital transformation of sports media rights would not be possible without the emergence of new and innovative technology. Unprecedented levels of broadband speed, the exponential growth of free WiFi (including in stadia) and the increasing sophistication of smartphone cameras are just some of the developments which have fuelled the growing trend.
The digital landscape for new technologies and devices is changing rapidly, with live mobile broadcasting apps (such as Facebook Live & Periscope) now mainstream and ‘second screening’ the norm. These technologies are being leveraged to enhance the fan experience and bring levels of engagement to a whole new level.
|Case study 1: Facebook Sports Stadium
The “Facebook Sports Stadium” is one recent example. There are over 1.7 billion users on Facebook’s platform, and therefore a huge amount of ‘noise’ for a fan to cut through to access the content which is most relevant to them.
The Facebook Sports Stadium, by allowing users to access real-time updates on games, popular posts from other fans, and statistics and commentary from experts, will effectively bring communities of fans together by making relevant fan-generated content more accessible online.
|Case study 2: NFL & Yahoo! / Twitter
One notable global example of live video streaming is the NFL’s recent deals with both Yahoo! and Twitter. In 2015, 15 million people streamed the first global live stream of a regular season NFL game, hosted by Yahoo!, which was a landmark moment in sports broadcasting. In 2016, Twitter then secured the over-the-top (OTT) digital streaming rights to provide free, live streaming video of the NFL’s “Thursday night football”.
|Case study 3: Table Tennis England & TheSPORTbible
In November 2016, a European table-tennis qualifying tie between England and Greece was streamed live on TheSPORTbible’s Facebook page. This was a landmark moment for sports broadcasting in the UK, with 2.1 million people tuning in to watch on a night that Manchester City and Barcelona were playing in the UEFA Champions League.
An objective assessment of the parties involved and the drivers behind entering into this deal tells us a huge amount about the opportunities presented by the ever-changing sports media rights landscape. TheSPORTbible (which is part of TheLADbible group) is one of the most popular sports media websites and publishers in the UK with more than 8.5 million fans on Facebook and a weekly viewership of around 100 million (which is more than the Daily Mail). Table tennis in the UK, like many other lower-tier sports, faces an ongoing challenge to stand out from the crowd in in a saturated market and engage a new and younger audience.
Whilst sports like table-tennis would traditionally have seen a TV broadcast deal as being the ‘holy grail’ when it comes to commercialising their media rights, the current landscape means that the idea of ‘getting on TV’ is not as attractive or, indeed, as essential as it might seem at the outset, both from a commercial and also an engagement perspective.
|This ground-breaking deal is an example of a cost-effective and innovative way of implementing a media rights strategy in order to increase levels of engagement. Teaming up with a technology or digital platform allows a rights holder to by-pass the traditional broadcasting market and effectively go straight to the target audience, in doing so hugely increasing the potential exposure.
This success story shows us the potential of the live video space, both Facebook and other platforms. It also demonstrates that traditional broadcast (despite the undoubted credibility which it offers) is no longer a prerequisite for effective fan engagement from a media rights perspective.
Above all, this example symbolises the growing trend of video streaming platforms breaking the stranglehold that broadcasters hold over media rights. It also gives hope and perhaps inspiration to those rights holders looking for innovative and cost-effective ways of driving levels of engagement.
|Case study 4: GAAGo
The recent success of GAAGO, the GAA’s innovative international online streaming service for Gaelic Games, is another great example of a rights holder tapping into an international fanbase using means other than the traditional, linear broadcast route. The platform, which involved the GAA teaming up with technology provider StreamUK, offers both live and on-demand matches for global audiences.
Opportunity v challenge
So what does this all mean for the industry and for stakeholders trying to navigate this digital transformation and separate themselves from the crowd?
Well, on one hand there is an enormous opportunity. There are so many ways for a consumer or fan to connect and engage with sports content. If innovative, fresh and with a clear narrative, that content has the capacity and potential to be enormously powerful. Increased connectivity presents a range of opportunities for rights holders and licensees to provide added-value to fans and consumers, and also to commercial partners through advertising and sponsorship.
These opportunities do, on the other hand, need to be balanced against the challenge of operating within an increasingly crowded, and fragmented online space. The vast amounts of accessible and high-quality content, combined with the shrinking attention spans of modern-day consumers, means that the ability to consistently engage a new and younger audience is becoming increasingly difficult.
Driving fan engagement in the digital age
So what are some of the innovative ways in which some forward-thinking rights holders are attempting to drive fan engagement in the digital age?
Content must be innovative and high-quality. Live match-day experiences, behind-the-scenes footage, player profiles, team news, video, statistics and data analytics, fantasy sports and competitions with prizes are just some topical examples.
Whilst social media provides arguably the most effective method of enhancing the quality of engagements between a rights holder and its fans (and exponentially increasing a rights holder’s reach), is there an opportunity to direct traffic to particularly innovative content on its website or mobile app? Many rights holders are also expanding their social presence, with Instagram and Snapchat most notably enjoying increasing popularity as a means of building much more personalised experiences and closer connections between players and teams, and fans. As an example, Manchester City FC recently launched its “Matchday” app, a dedicated second screen app which effectively brings a community of fans together on match-day by allowing them to enjoy innovative and exclusive content, for example live footage from the players’ tunnel, post-match managers’ press conference, highlights and “Tactical Cam” and in-match and half-time commentary from pundits, fans and special guests.
There is increasing scope for a more innovative, cost-effective and nuanced media rights strategy thanks to alternatives to the traditional, linear, TV broadcast route (just like the Table Tennis England example explained at case study 3).
Those rights holders who are prepared to embrace new technologies are likely to be the ones that stand out from the crowd. Virtual and augmented reality is one method of enhancing the fan experience which some rights holders are exploring.
Focusing activations and innovative strategies around key games, events and tournaments in order to maximise levels of interaction at certain key times is one way of driving engagement. Shrinking attention spans and increasing levels of choice mean that ‘season-long’ engagement can be challenging.
Using players and athletes as brand ambassadors, and leveraging these ambassadors during key events can be hugely effective. The MLS in the U.S. is one example of a league which utilises its biggest assets (its players) to great effect in order to drive conversation and engagement, for example through the use of exclusive pre-match interviews with players and managers.
Digital activation strategies can help drive ticket sales and promotions.
Using the huge amounts of data which is being collected to better understand the consumption habits and viewing behaviours of your target audience is another way of ‘getting ahead’.
There are a raft of legal issues and challenges which stakeholders navigating the digital landscape should be mindful of. These include:
- Media rights agreements – with media rights strategies becoming increasingly nuanced, and rights holders packaging and bundling rights in a variety of different ways, the drafting and negotiation of agreements has become increasingly challenging, and important. Like all other stakeholders, legal advisers will need to ensure they are well-equipped to properly advise on the impact of new technology on sports media rights programmes.
- Unauthorised content –the availability of unauthorised content on social media being problematic is perhaps not unsurprising, given the speed at which content can be uploaded and widely disseminated across multiple platforms. Taking a proactive approach is invariably the best form of prevention for rights holders, with new technology allowing more sophisticated and cost-effective anti-piracy strategies to be put in place.
- Expansion v exploitation – a rights holder’s desire to grow its brand needs to be balanced with the need to protect its IP and a preparedness to enforce it in the event of exploitation. The first step is to fully understand the value of its content and to put in place a clear IP strategy.
- Data protection and data privacy – data can be hugely valuable when understanding the consumption habits of consumers, but when large amounts of personal and often sensitive data are being captured, processed and shared, suitable safeguarding mechanisms will be critical.
Wider Industry Trends
As we look ahead to 2017, here are just some of the wider industry trends and talking points that will continue to help shape the future of the sports industry in the digital age.
- Are Facebook, Google, Twitter and others the broadcasters of the future? Will we ever reach a point where a major online platform or so-called OTT player will outbid traditional broadcasters to secure the rights to a major global sports league, and give the games away for free? Will the term ‘broadcasting’ become obsolete?
- What are the opportunities and challenges which the continuing expansion of the esports industry will continue to present for traditional sports and commercial partners?
- Will we see virtual reality as a fan engagement tool and as a new means of brand activation via immersive and targeted promotional experiences make further ground in the industry?
- Will we see the emergence of daily fantasy sports as an additional revenue pillar in the UK and Ireland?
- Will influencer marketing continue to be on the rise? Using trusted personalities and influential accounts as brand advocates provides an additional media platform to connect with an audience, and cuts through saturated timelines to reach fans and potential customers.
- More generally, how will the sports industry keep pace with technological developments and consumer trends?
4 Key takeaways
- Understand, acknowledge and embrace digital disruption – it’s here to stay.
- Opportunity v risk – the shift in viewing behaviours, ever-changing media rights landscape and emergence of new technologies can be viewed in different ways. It’s about maximising the opportunities and overcoming the challenges.
- Drive fan engagement in the digital age – through innovative and forward-thinking strategies, so much can be achieved.
- Keep two eyes on the future and embrace new technologies – the industry is so fast-moving that those who are prepared to immerse themselves in the trends of tomorrow will stay one step ahead.
Jonny is a sports lawyer at Sheridans in London. He works across the sports industry and specialises in digital sport, advising clubs, federations, governing bodies, athletes, agents, brands, sponsors, broadcasters, digital media companies and sports tech companies. He can be contacted on Twitter at @jonnymadill89 and by email at firstname.lastname@example.org.