Four ways the sport industry is evolving – and what it means

We all know it’s been a challenging year, but the sport industry is no stranger to reinventing itself. With that in mind, I read PwC’s recent report, Sports industry: system rebooting, with particular interest.

As many as 780 sport leaders from across the globe responded to the research study, which gets under the surface of the sport industry to explore how it’s evolving in response to today’s climate.

Read on for my four key takeaways from the report as well as my analysis of the threats and opportunities that present themselves for sports entities beyond 2020.

1️⃣ Industry-wide opportunities are different, but remain rife

The report pinpoints the following as the top opportunities to increase revenue within the sport industry right now:

• Enhanced digital media fan experience (89.3%)
• Creation and monetisation of digital assets (82.9%)
• Innovation in media rights packaging and distribution (72.2%)

Enhancing digital fan experiences fundamentally starts with truly knowing your fanbase and building direct relationships with them.

It’s interesting when you compare it alongside the top threat to revenue – ‘Impact of health and safety crises’ (69.3%). In sport, this heavily affects many key revenue lines related to live events (i.e., ticketing, F&B, merchandise). In addition, the most likely outcome of the Covid-19 crisis is that 70.6% of sports organisations will increasingly focus on diversifying revenue streams. All these factors contribute to what can be a very pivotal period for the industry to drive innovation and new ventures.

The impact presents a serious opportunity to re-evaluate how greater value is brought to fans. Creating and monetising digital assets starts with audience – in particular, across owned & operated channels. At Deltatre, we have the pleasure of running some of the largest sporting platforms in this space.

We covered this topic further in our white paper, ‘Where the Money is Going: The Future of Sports Entertainment.’ We look at how changing consumer expectations are impacting decision-making and what the driving forces will be behind serious investment into OTT by sports content rights owners. You can download it here.

2️⃣ Increased collaboration is set to unlock growth potential

According to the report, the most prevalent collaboration models expected within the sports industry are the following:

• Funding by financial investors/private equity (75.0%)
• Joint projects and co-creation with sponsors (70.2%)
• Joint ventures with sports marketing agencies (57.8%)

It’s interesting as we’re already starting to see this in action. In particular, CVC with its recent investments in rugby (Premiership and PRO14) along with its potential investment in Serie A and the increasing growth of SPACs (most recently Genius Sports going public for $1.5bn).

Like any industry, the question of control and ultimately giving some of that up in exchange for liquidity is a quandary that many will battle with. At Deltatre, we have first-hand experience of joint projects with our clients where through a shared focus, we deliver and contribute to growth aligned with their strategy. Our extensive sector expertise also allows us to support sponsors and agencies in better engaging fans.

This rise in collaboration (either externally funded or through partnerships) does have the potential to allow the sports industry to accelerate its strategic plans for growth, ready for a post-Covid-19 world.

3️⃣ Betting and fantasy will be key industry drivers

The report sets out an expected betting and fantasy yearly growth of 7.2% over a 3-5-year period – mainly due to the rapid acceleration of the betting market in the US since the lifting of the federal ban in 2018.

We further explored the changing traits and demands of the US sports fan in our white paper ‘A new digital decade – the evolution of the US sports fan’. You can download it here.

It’s interesting to consider where and how this market will grow. For the US, a number of changes that have already occurred and potentially will continue to take place in the future can open up a huge market for growth. In the UK, a traditionally strong betting market; the UK Government’s pending review of the Gambling Act has the likelihood of introducing some changes across sponsorship and advertising that will need to be analysed and could shape what future growth looks like.

Fantasy and the more expansive gamification are certainly areas that we predict will continue to grow. The increase in enhanced experiences will naturally lend itself as a place for fantasy to take place both in the build-up, but also in real-time.

While there has been an increase in the volume of on-demand and non-live content consumption, this point in particular draws attention to the longevity and sustainability of live sports content and the live experience as a flagpole for drawing audiences together at the same point in time.

4️⃣ The viewing experience will change

It’s also likely that today’s climate will bring about a shift in the way the end-user consumes content. For example, the study finds:

• The live sports media viewing experience will become significantly richer, immersive and interactive (86.5%)
• Rights owners’ OTT offerings will serve secondary content/markets and grow licensing to media companies (B2B2C) (70.0%)

It’s interesting that the industry identifies more immersive and interactive experiences as being integral to the future. Having a live event is not enough today to hold an audience’s attention, providing compelling experiences is key.

We explored how data will become even more essential to the live viewing experience of tomorrow within our white paper, ‘Played to measure: How live data is transforming the future of soccer.’ You can download it here. Also, find out more about DIVA, our advanced OTT player that synchronizes real-time data with rich interactivity.

We’re seeing with a number of our clients across Europe and America (North and South), our enhanced video platform is driving increased consumption time and reducing churn by building a must-have experience. I’m a strong advocate that serving experiences to audiences across digital while maintaining that they do not leave the viewing experience is vital. This is ultimately driven by content and context within a single destination.

For OTT, it is a distribution mechanism that is maturing. Many have proven the model works – it’s not just sustainable, but also generates serious contribution to revenue. The key now as it matures is identifying the best markets and audiences to use it either in a primary or secondary setting; along with the product and packaging mix that will be most successful. Our audience and market insights allow us to support and provide recommendations to our clients, gathered and validated as we’ve been working with both sports organisations and their associated rights holders since 2013; in licensing content and propositions via a B2B2C model that ensures the end fan is given the best experience.

Join the conversation over on Twitter or LinkedIn. Any questions for the team? We’d love to hear from you.