January 18, 2013
by Carlo De Marchis
Originally published on our Group CTO blog.
I do normally hate end-of-year summary articles and new year forecast articles, but here I am speculating what 2013 will bring to the digital universe in general and to the digital sport business in particular.
Having done some research during the holidays period on what other more influent contributors have written and spending some time on:
2013 will be a transition year, i do not expect major disruptive or breakthrough innovation and trends to happen this year to the digital sport business. Instead we will see consolidation of trends either in a positive or negative way. 2012 was a major game-changer year and it will take time for the business to digest what happened.
What I’m reading everywhere and seeing in direct observation is back to what Gartner called “The nexus of 4 forces”:
Everywhere else Social and Mobile are the two recurring topics – as they were in the last years, no surprises.
What really surprise me is how slowly the business is adopting this well anticipated major trend (mobile), a lot of companies and sport entities are still thinking, designing and operating for a desktop dominated world. This resistance could severely put their business at risk in the near future.
What 2012 told us (taken from a Comscore/NBC study on the olympics) is that:
The study also demonstrated as the more devices users would access to follow the games the more engagement and time spent.
The biggest issue for the business is that the shift of audiences from traditional media to the web to mobile is putting at risk the advertising revenue.
What normally happens is that advertising money should follow audiences, if people move from one media to another, advertising money would normally do the same.
The fundamental issue with the current shift is that not all media have the same monetization power.
Users are more and more shifting towards the latter. The industry knows well how to monetize TV, learned in the last years how to decently monetize the web but has no real solution for monetizing the mobile landscape.
KCPB analyst Mary Meeker is showing this opportunity/threat in her annual “Internet trends” presentation since 2011.
Mobile is where monetization in traditional ways is in trouble and many companies are trying to understand what can be done, I am not sure this dilemma will be an easy one to solve.
In the high level sport business, TV rights are still for now protecting the huge revenues that Sport right owners are attracting (mostly sport federations, leagues, clubs) and which are paying for the whole business, much more than sponsoring money.
The problem is that most right-holders (those who buy rights like broadcasters) are basing very often their business models on TV + web + mobile advertising revenues, with TV being their comfort zone and the safest revenue generator (for now), that’s why they are hyper-protective of the classical TV business.
At the moment digital sport is a very solid and growing business but i think we all collectively have to carefully evaluate the impact of the digital/social/mobile shift and consider how in the medium term it could undermine the foundations of the business. We should not hide our heads in the sand but look for opportunities in this evolving scenario.
I also do have an instinctive feeling that some old media could rebound a bit this year (thinking TV and paper) in some selective cases, but I maybe completely wrong.
What can prove that I am wrong and make 2013 a real turning point in digital sport?
It’s easy to understand how most of them are not easily achievable because of the protection guarantee to the existing right-holding broadcaster by the rights paradigm.
This is true for those sports for which media companies fight to acquire rights but less for those sports that are eagerly trying to find channels (TV and digital) to broadcast their events.
I would expect a lot more innovation from those (minor) sports that need to find ways to bring their events and content to their fans on all platforms, they are more inclined to experiment and have a lot less constraints. They may miss the budget and the vision. Hence they represent an opportunity for those players in the business who are focused on innovating.
2013 will be in any case an interesting year building up for another huge year with Winter Olympics and FIFA World Cup in 2014.