It's all about the audiences
The idea that sports teams are in the entertainment business and not just the sports business, is not a new one. The rapid global rollout of streaming platforms such as Netflix in the past decade, combined with further growth of gaming among children and adults alike has driven significant competition for eyeballs. Basketball does not compete with football for attention, but with Fortnite or Squid Game. If you’re a brand manager wanting to target a specific demographic, you’ll go to where the audience is and will be, not where they were. That’s led to the potential for new business models, new metrics (very few people were talking about ARPU a few years ago) and a whole lot of hand-wringing amongst senior sports execs. But it has also created a host of new opportunities for disruptive companies as the worlds of sports, media and culture have converged – new IP owners are going to emerge (from Overtime Elite to eSkootr racing) but also existing sports, even with the advantages afforded to them by their current fanbases, are going to have to do things differently.
The opportunities that are created as a result of these changes are going to be very valuable. Global entertainment and media was worth an estimated $2.2 trillion in 2021 according to PwC. While live events took a huge hit during 2020, as reported by the FT this week, crowds have returned with Premier League attendances hitting record highs this season. Virtual events that appeared during the pandemic are here to stay too, as music and sports fans from around the globe enjoy a new level of access to talent that was impossible before the development of dedicated technology. And the demand for content appears to be ever increasing, with the likes of Amazon, Netflix and Disney+ acquiring and commissioning content at a dizzying pace. Changing consumer tastes are bringing more participants to the space too, with the Creator Economy now worth over $100bn and the blending of digital and physical worlds set to only accelerate.
Organisations that can build their own audiences in this technology environment, or can help others to do so (i.e. selling picks and shovels in a gold rush), are going to do very well. It’s why many sports organisations know that they have to move from being event organisers to global entertainment brands (although that’s much easier said than done). If Gen Z are spending ten hours a day online, that’s more than half of their waking hours spent as part of some kind of audience, even if not in the traditional sense of sitting in a crowd. Who owns that audience, how they grow it, keep it and ultimately monetise it is going to be key because that time spent feeds into other aspects of our lives - what we talk about with friends and how we spend our money. So much of how we define moments in time ties to audiences - what music people listened to, film and tv watched, where we were when great sporting moments took place. And ultimately building these audiences becomes a technology play – it’s the only way to do so at genuine scale.
Our member companies are in the audience business
It’s the technology companies that are building, engaging and monetising audiences at the intersection of sports, media and culture – what we call “audience tech” - that we work with. This could be tech companies building their own audiences, as BALLN is doing with football obsessed 12-17 year olds. Or it could be by helping other teams and brands grow their audiences. For example, Satisfi Labs helps teams, leagues and venues to engage their fans by using AI to answer their questions. Fevo helps teams and venues monetise their fanbase through social commerce. Slate and Greenfly help IP owners grow their audience through more engaging content.
Naturally, these companies have as much application in the broader media and cultural market as they do within sports. For example, the technology that is driving CNN’s live content production is the same technology being used by dozens of sports teams around the world (it’s Tagboard ;)). Venues hosting concerts one week are being used for esports or tennis the next. There’s a natural synergy to working across all of sports, media and entertainment.
And there’s lots of expertise and learnings that companies who have built a track record in sports can apply more broadly. Sports retains a special place in our consciousness and indeed, in our hearts. Sports dominated the most viewed US TV broadcasts in 2021 (credit to Oprah, Megan & Harry for breaking the top ten!). Brands look on enviously at the connections teams and athletes have with their fans, and spent $65bn globally last year to get in on the action. But to maintain that level of importance (and perhaps relevance) and compete for our attention versus every new release on Netflix or in Roblox, the sports industry needs to be using the very best tools and approaches it can.
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Organisations that can build their own audiences in this technology environment, or can help others to do so (i.e. selling picks and shovels in a gold rush), are going to do very well"