April 1, 2020 | Authored by: Vindicia Team Blogs
Are we seeing the digital transformation of the sports industry?
These are unprecedented times for all, but sports have been particularly affected. With live events cancelled or postponed, the industry is effectively in hibernation due to the Coronavirus. Now more than ever, leagues, distributors and teams need to re-examine their digital strategy to enhance relationships with fans and adapt to the changing landscape that has been evolving prior to the current crisis.
Embracing digital to build a sustainable sports business
FC Barcelona are pioneers of using digital means to engage with fans worldwide. Their mission, as detailed in their strategic plan, is “to be the most admired, loved and global sporting institution.” The Spanish football club is set to launch a new OTT streaming service this spring. This new digital strategy involves a new evolution of the club’s revenue streams, whereby the digital business is to become one of its main sources of income in the coming years. Also, the new eSports division is a program launched with the intention of building a leading section that will help take the brand to countries like the US and China, connect with new audiences, especially in emerging football markets, and create a new source of revenue for the club.
A boom in eSports
With the effective total shutdown of live events, many fans are turning to eSports for their sports fix. What was once considered a small niche is now being given the limelight. Viewing numbers for eSports are growing and broadcasters are paying attention.
In motorsports, viewing numbers are exploding for the eNASCAR iRacing Pro Invitational Series. The first race brought in 903,000 viewers, making it one of the most-watched eSports events broadcast on television. So much so that Fox has announced it will air the entire season on the Fox broadcast network. Although it is clearly a different experience to real-world racing, with high production values and familiar commentators, it is compelling to motorsports fans.
The technology has to be seamless though, and given the massive strain on networks, it's not surprising that some issues arise. The Bahrain Virtual Grand Prix eSports race was cut short by technical problems. These teething problems will be overcome and there is still plenty of drama on the track.
Clear challenges in traditional revenue streams
Big name brands are cancelling or freezing marketing and advertising spend. This will of course have a direct impact on the sports economy. For example, Coca-Cola, who is a headline sponsor of the Premier League, Euro 2020 and 2020 Tokyo Olympic Games, has cancelled all marketing spend in the UK.
It will be interesting to see how future sports rights will sold in these challenging times. Distributors that were planning to pay large sums of money for rights have been left without content and withholding fees. In the future, the distributors and broadcasters may look to negotiate for additional value in the event of long-term cancellations. Germany’s Bundesliga media rights tender has been postponed. This uncertainty may still mean that matches are played behind closed doors to finish the season.
Simplify subscription payments and create the ultimate fan experience
Vindicia empowers you to build any type of direct-to-consumer digital service for sports and focus on providing an enhanced fan experience with live events, exclusive content and more. With Vindicia to manage the subscription lifecycle, you can offer fans what they want, help them pay the way they prefer, and keep them coming back. Our subscription intelligence connects you to data that helps you understand your fans better, leading to long-term sustainable revenues. Contact us to learn more about the global sports organizations we are supporting, including how we are helping them manage the significant challenges they are facing today.
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