Why Sport is Most Disrupted of All Industries

What I Learnt About Sports Business in Digital from Developing a Course About It
May 16, 2017

Why Sport is Most Disrupted of All Industries

The online course ‘Sports Strategy in Digital: The DATA MODEL Story’ is now available on Institute Of Sport

Sports’ Digital Tipping Point

There is increasing evidence that sport is heading for a tipping point in the digital era with younger fans not participating in or following sports in the same numbers or in the same ways that the business of sport has been based on;

  • Traditional TV is in decline as younger generations opt for entertainment on their second and third screens. Gaming, social media and video-on-demand are now sports competitors – and not each other.
  • Sport on traditional TV is in decline. According to Bloomberg News, in the USA, NBC’s Rio Olympic prime-time coverage viewers dropped 17% with a decline of 25% in the valuable 18-to-49-year-old age group from London 2012. Live viewing of Sky TV’s English Premier League fell 14% over the course of the 2016/17 Premier League season.

•   Viewership on TV is ageing globally and across codes according to a study by conducted Magna Global for SportsBusiness Journal in the article Going Gray: Sports TV Viewers Skew Older

 

 

 

 

 

 

 

 

 

  • Millennials and younger generations are not subscribing to cable services. Instead they are getting their content from over-the-top (OTT) streaming services like Netflix and YouTube. According to Fortune, ESPN’s cable subscriptions peaked at 99 million in 2013 and by 2015 this figure had declined to 92 million.
  • Esports are mainstream and fast growing. More people are now tuned into games such as League of Legends and Dota 2 than the NBA’s finals series.

At the same time that these changes are taking place in viewership and attention, observers are identifying that the sports business industry is undergoing more transformation than any other industry;

Sport is most disrupted of all industries – Satya Nadella, CEO, Microsoft

The following is my take on the top 5 possible causes for sport to be so disrupted;

  1. Sport is consumed by fans – not consumers.

Fan and followers have a passion and loyalty that does not naturally exist for other brands. In the digital age this represents both an advantage and a challenge since the level of personalization available from brands like Amazon, Facebook and Starbucks are also the high tide mark for teams and events in return for their fans passion. We are personally invested in our team and now expect that same of them in return.

  1. Even before the digital era sport was an entertainment product now other products are experiences too.

Sport has held a sacred place in societies as something to be experienced, discussed and shared. Now other products and services that were once analogue offerings are also digitally-enabled experiences.

This movement of traditional products and services to co-created experiences places increased pressure on sports to continue being ahead of the curve compared to other attention-grabbing experiences.

Note: co-creating of the gaming experience between the publishers and gamers is a major success factor for the booming Esports industry.

Coca Cola, one of the strongest brands in the world no longer sells sugary drinks – they sell ‘Happiness’ at least they did until 2016 and now they provide us with ‘Taste the Feeling’. They are able to generate this emotion, and transcend the product, primarily by creating content and communities on digital and social media around the experience.

If a soda can sell an experience, how much more compelling does a sports experience have to be?

  1. The battle between the live and broadcast experience has never been more hotly contested.

Venues are now technology and wi-fi enabled for fans to create their own experience whilst the modern TV experience is defined by exclusive behind-the-scenes access available to us on high definition TV’s.

Virtual Reality and Augmented Reality will continue to up the stakes between the live and televised experience.

  1. Sport is essentially an analogue product in a world gone digital.

The match or competition is played and consumed at a fixed time and place which is at odds to our increasingly on-demand lifestyle.

This means that sport brands need to extend their value to a 24-7 always-on offering. This is one of the reasons why social and digital media is so important on non-match day. Brands in other industries do not need to match this level of intensity (e.g., want to know how your room is being prepared for your next hotel stay? Me neither!)

  1. Collectively, digital technologies are primers for the sports experience more than any other product;
  • Social Media: sport dominates conversation online; for example, more than half of all posts on Twitter are sports-related. Teams now feel like content publishers such is fans appetite for connection.
  • Internet of Things has given rise to smart stadia whilst sensors have created unprecedented insight into athlete performance and all the data management and technology investment that entails.
  • Analytics make performance data a source of entertainment such is fans demand for sporting insights. (Want to know how fast they made your hotel bed? Didn’t think so!)
  • Mobile Computing:the smart phone is now ‘the remote control to the game’ and game-day apps continue to redefine the experience
  • Cloud Computing: provides venues with bandwidth for fans to take advantage of their digitally-enabled services and utility

  • New Technologies:Artificial Intelligence is going to up the game of personalization and the at-event experience as sport enterprises become more accustomed to their role as a digital retailer.

Augmented Reality will also push this digital retailing agenda by mixing the real and virtual world whilst Virtual Reality will create more immersive experiences both at the game and at home.