COVID showed us a glimpse into which industries struggled in a digital world.
We saw the travel and hospitality industries struggle immensely on one side and the gaming and tech industries profited heavily on the other.
Many of the smaller sports teams struggled heavily. But for some of the bigger and more popular teams, they did well considering the circumstances— especially considering how early fan-less sports came back to us. The reason, I think, was the fact they have been able to continue playing and televising the games.
The one optimistic outcome of this all has been the forced digitalization sports teams have had to initiate in order to survive. In this article, I want to highlight 3 digital business models that some teams are doing, and that the rest should adopt.
But it’s important to note that all of these digital models need to be morphed to fit your fans — because any digital business model is only effective if your users find it useful.
OTT Owned Subscriptions
The benefits of an OTT subscription model can not be ignored and many sports entities are already aware of this.
It allows for your viewers to consume video content at any time of the day, which works perfectly with the viewing habits of Gen Z. Additionally, OTT opens up new advertising, targeting, and content personalization opportunities. And above all, it is something younger audiences are familiar with and okay with.
The following is an excerpt directly from the report:
According to a survey conducted by PwC, the primary reason consumers stuck with paid TV subscriptions was to have access to sports channels. 82% of respondents said they would stop paying for their TV service if they didn’t need it to watch live sporting events.
Over 50% of sports fans said they’d pay a premium to watch live sports on more devices. Additionally, the average sports fan is willing to pay around $23 per month for unlimited access to live sports on any platform. This opportunity isn’t going unnoticed — Verizon recently agreed to pay $1.5 billion over five years to stream NFL games on mobile devices, tablets, and OTT devices, for example.
And they’re looking for more engaging ways to view sports broadcasts. Fifty-six percent of sports fans would like more interactive content, such as the ability to chat with other fans, while watching live sports. The NBA, which is one of the most digitally oriented professional sports leagues, is positioned to capitalize on this demand with its recent streaming partnership with Twitch — the platform will stream NBA games along with interactive stats displays, “loyalty points” for engaging with the broadcasts, and chat functionality, for example.
An important thing to note is that a right’s holder — especially bigger players and teams — does not actually need to replace their existing distribution deals.
Think of an OTT play as audience segmentation and complementary to your existing distribution network. It is better suited to reach your “super fans” or fans that are natural buyers while normal distributors are perfect for live games and reaching broader audiences. The synergy between the two is perfect to extend your reach to fans.
In terms of what types of content are appropriate for the OTT service, this varies based on what type of entity you are.
For sports teams, the premium content can be anything from player spotlights, “day-in-the-life” videos, podcasts, training camp documentaries, etc.
For leagues/associations, this can mimic the likes of ESPN+ with shows like “Detail”, pundit talk shows, fantasy sports shows, etc.
The key is that they both complement the existing mass-media live sports content. By doing so, you are extending the touchpoints between you and your fans.
The benefit for both types of entities of adding an additional distribution layer via an OTT service is in the obvious boost in the average lifetime value of each of your fans. This is achieved by either subscription or other micro-transactions via the platform — whichever you choose.
So to summarize, an OTT service is a digital business model that can require resources but will offer fairly drastic upside, especially when you think of the user data that can be generated. But more on data later.
Physical sports attendance has and always will be an important element for sports brands.
With that in mind, a digital transformation of the stadium experience is not only a fantastic digital revenue opportunity, but perhaps a much-needed addition to help ease the minds of worried patrons.
Some teams have been at the forefront of smart stadium innovation.
3 of the top smart venue innovations are:
- A digital platform that allows for automated personalized content
- The use of big data to gain a deep understanding of consumers
- The optimization of connectivity and safety in-stadium
To start with, smart venues provide a standard utility to attendees through the stadium experience. By using a digital platform in tandem, personalized content can be served to patrons and can range from providing real-time parking availability, and traffic updates, to personalized seating, concession information, bathroom lines, etc.
Another fan experience element is in customer feedback and safety. Attendees can voice their concerns, stadium issues, etc. conveniently within the platform. In addition, the stadium can share important safety guidelines and potentially even monitor the efficacy of those guidelines.
In addition to being helpful to patrons, the digital platform also serves as a data fishnet for the team/ticketing merchants. Personalized content can become even more personalized once user metrics are obtained. Such data easily provides cross-sell/up-sell opportunities and an overall extension of the lifetime value of the fan. Digital ticketing, gamification, etc. are some other interesting prospects if you so choose.
You can also begin to imagine the sponsorship/advertising doors that start to crack open with such user data at your fingertips.
Data gathering as a revenue driver
As mentioned in the previous sections, user data is a universal byproduct of digitalization that is often overlooked. Whether it is an OTT platform or a smart stadium with a corresponding app, the interoperability of them all is what is key. Being able to interact with fans both during and outside of live matches represents an amazing opportunity for some good ol’ data gathering.
If done right, that data gathering can result in extremely useful data points and metrics that can be valuable to teams, broadcasters, and potential sponsors.
Naturally, having a pool of very personalized data points can be leveraged to sweeten sponsorship deals. Especially assuming conversion rates within the platform are tracked and are higher than existing social media platforms.
In addition to bolstering existing media deals, teams can implement their own OTT and content services that offer things like premium content, digital sponsorship options, fantasy/wager games, e-commerce, etc.
And in the background, you are gathering a host of behavioral and demographic metrics on your users. This opens some interesting doors, especially in the realm of offering a-la-carte advertising similar to Facebook — which would be especially helpful for smaller brands looking to advertise their products and services.
But while some clubs are jumping on the OTT train, many teams still do not offer a team-specific app or community to connect with fans. Unfortunately, when external rights holders launch such apps, they often do not take advantage of the potentially lucrative monetization sources previously mentioned.
An OTT platform that uses blockchain. Sound interesting?
At Liquiditeam, we offer an underlying platform that can accomplish all 3 of these things.
Here is a quick boilerplate of the platform:
“With Unyfy, every professional sports club and athlete can now create an engaging digital home for their fanbase — and build a digital-native business model on top with ease.”
The core mechanism behind our platform is a blockchain-based token that users can buy, earn, trade, etc. for their engagement, interaction, ideations, etc. The possibilities are really limited to your imagination.
- It can be behind-the-scenes premium content of players, scrimmages, etc.
- Fan ideations and proposals of team names, hero/map selection, game modes, team jersey designs
- Fan-controlled gaming and fan all-star games
- And in the future, we plan to add digital/physical collectibles of player cards, highlights, etc.
It is a solution that allows you to own your fan base and give them a place to congregate. You can reach younger audiences, hold their attention longer by showing them the content iterations they want to see, and above all, give them the ability to make decisions and be pseudo-owners of your brand.
Here is a short video we created that breaks it down.
Because of the customizability, the stadium experience app, premium content engine, ticketing, merchandising, etc. can all theoretically be built on top of it.
So as mentioned, three quickly-growing digital business models for sports teams include a direct-to-consumer media service, a smart venue/app, and leveraging data to secure lucrative media deals.
And not to oversell what we do but these three digital business models for sports teams can be easily accomplished on top of Unyfy.
We recently launched our Early Adopter Club to try to achieve this. The club is open to teams and athletes to try the platform with zero software licensing costs for the first year. Essentially, the only investment for you is the effort to operate the platform. The reason for this program is to get our solution into the hands of as many users as possible so we can continue iterating and optimizing to make it the best solution on the market.