Having recently returned home from completing my first SXSW experience and attending the MIT Sloan Sports Analytics Conference, I’ve written this blog to share the key sports marketing and sponsorship insights garnered from a fortnight spent listening to, and meeting with, leading brands and rights holders in the States.
Here we go…
1. Virtual Reality is quickly becoming the new 3D TV
People are still talking about VR, but more of the conversations questioned whether or not it will join 3D TV on the tech scrapheap.
I believe there are 3 clear challenges that VR currently faces including:
The tech isn’t quite there yet
We tried endless headsets on and whilst they are OK, nothing is truly immersive and unforgettable outside of gaming. Both the headset and content creators need to realise significant tech improvements to take the VR experience from OK to unforgettable.
Wearing a headset is clunky
Whilst content creators need to improve the VR experiences they are developing, the headset providers also have a way to go. In this day and age, it just doesn’t feel natural or smooth to have a giant headset on. They are also expensive to buy.
VR is isolating
Call me old-school, but the enjoyment of watching movies, TV shows and in particular sport, is based on a shared experience with friends and family. At present, VR hasn’t found a way to incorporate the social element which is pivotal to sharing and enjoying these experiences.
All of the above provide considerable obstacles VR must overcome to reach critical mass. It will always have a place for gaming and other bespoke cinematic experiences, but in terms of us all putting a VR headset on to watch Friday night footy at home, I can’t see it happening quick enough before another tech (holograms anyone?) takes over.
2. Augmented Reality is the real opportunity
At SXSW, there was a strong sense that the dial has shifted from VR to AR and I think it is something that sports marketers should be excited about.
The critical advantage AR holds is the ease of access. Unlike VR which requires a big expensive headset, all you need is a smartphone and according to Statista it’s not just us millennials that have these devices by our side. With an estimated 2.32 billion people using smartphones in 2017, AR has already overcome the accessibility hurdle VR is struggling with.
AR is not new, far from it, it’s being cleverly used by numerous brands already. What excites me though is the next level of AR and what that means for sports marketing. Imagine integrating AR live at match, where fans can hover their phone over a player on the field in front of them, to automatically see their stats, fantasy points, GPS data etc.
3. The media rights model is moving from wholesale to retail
Major rights holders make more money from their broadcast deals than they do from any other source, with broadcast revenue often dwarfing other revenue streams like sponsorship, merchandise, membership and ticketing. Traditionally these deals have been wholesale in nature, with the rights sold to a media organisation(s) who then package, commercialise and make available to the fans.
At SXSW representatives from WWE, MLB and the NBA talked through how their organisations, each in their own way, are starting to integrate a ‘retail model’ where their property is made available direct to fans.
Some key learnings they shared from their experiences include:
- The retail model should be done in conjunction with the broadcast model, it’s not about replacing the lucrative TV product. With so much demand for fan’s time, the new model is about ensuring your sport is available to fans where they choose to be, on whatever screen they choose to view it on
- Pivotal to that point, is the need to optimise the content to those various screens. Simply running the TV broadcast on a smaller mobile screen doesn’t cut it.
- Major League Baseball has done such a good job digitalising baseball content for fans that they’ve created a company titled MLB Advanced Media which now specialises in distributing content through all forms of interactive media for other clients including the PGA, NHL, Riot Games and WWE to name few.
It takes a desire for innovation and real courage for an organisation to integrate the retail model, with the obvious fear being that it could cannibalise the market and reduce the value of the traditional wholesale rights. Those that have made the leap, like the WWE, talk about the significant revenue that is now being realised through the retail model, how it works alongside (and can lead to new customers for) their subscription TV model, provides more data on consumers and their consumption habits, and, ultimately grows their game through reaching more fans, more often, in more places.
This shift from wholesale to retail begs the question, will we end up in a world where the only model is retail? I think the answer is yes, eventually, we will. Netflix and others have already broken the traditional TV model and it’s only a matter of time before major rights holders are commercialising their product direct, and only direct, to fans.
The caveat with Australia, however, is current anti-syphoning laws which mandate that a certain amount of ‘national interest’ sporting programs are broadcast on free-to-air TV. I think this will result in Australia trailing other countries into the full adoption of the retail model, with the legislative hurdle providing another obstacle and delay for rights holders to overcome.
We are already beginning to see major rights holders as media production agencies though, with the AFL and Cricket Australia investing significantly in recent years. It is not unforeseeable that in years to come their production capabilities extend to live match broadcast, but with so much reliance on the broadcast deal revenue, the $ will clearly need to stack up first for this to happen.
4. The future of new sports
There was ample eSports discussion at SXSW and the MIT Sloan Sports Analytics Conference, centred mainly around the (so far unanswered) question of how anyone outside of the game manufacturers can make money through eSports. No one had any game-changing answers or plans (or if they did they weren’t kind enough to share with everyone), but we also heard from another sport of the future.
Enter Drone Racing League:
Drone Racing League (DRL) CEO Nicholas Horbaczewski delivered the most engaging presentation I saw at SXSW, detailing how against the backdrop of unachievable fan expectations of what drone racing should look like (thanks mainly to George Lucas and the Star Wars franchise), they managed to launch their first global race series in 2016.
There are 4 things that set the Drone Racing League apart from the multiple other leagues that have launched and ultimately failed.
Low Barriers to Participation
DRL provides low barriers to participation, as fans can simply head to their website and download a game which allows new pilots to learn how to fly a racing drone, compete in actual DRL courses, race friends from around the globe providing a simulation of what the professional pilots experience when racing in the DRL global race series.
Point of Difference
Further to this, DRL run an eSports tournament where the best pilot from all of those who downloaded the software can win a professional DRL contract and compete in the 2017 DRL season. That is a fair point of difference, not many sports allow you to go from couch sitting zero to professional hero so quickly.
Unique, Quality Content
DRL are patient. They understand the importance of ensuring the product is right for TV and digital consumption before launching. Many other drone racing start-ups have launched and quickly crash landed (poor drone pun intended) because their product wasn’t even close to being engaging for fans. You get the feeling DRL understands their role as not just a sport, but a tech company, and also a media agency. As a result, they’ve taken the time to create a great product, which means they create slick content which is critical for any modern-day sport, let along one launching direct to millennials.
Credible Role for Sponsors
Given the slick broadcast and digital content, there is a credible role for sponsors to play within the Drone Racing League. We already see Allianz as the naming rights sponsor for the global racing series, with their role being that they provide the all-important sponsorship dollars to help fund and grow the sport.
5. Australia isn’t that far behind
Last but not least, the ultimate takeout from SXSW and the MIT Sloan Sports Analytics Conference when it comes to sports marketing is that the natural inferiority complex we have in Australia might not be justified. Sure, we’ll never, ever, be able to compete in terms of reach and $’s with our counterparts in the US, Europe and the UK, however, in most circumstances there is an argument to be made that the competitive Australian marketplace has led to us becoming more innovative.
Feature Image via CNN