Digital technology - defining tipping point for sports revenue growth in 2019

“Show Me the Money!” report calls for sports to embrace technology innovation to broaden their appeal amongst new audiences, expand to new geographies, and create more immersive fan experiences

A new report by Tata Communications examining the commercial transformation of sports identifies 2019 as a defining tipping point for the global sports industry, with digital technology innovation set to kick-start a new era of unprecedented commercial growth for broadcasters, rights holders and sports organisations.

The “Show Me the Money!” report – featuring insights from Formula 1, MotoGP and European Tour plus major global players HSBC and DAZN – highlights that streaming platforms, eSports, VR apps and other technology innovations are quickly becoming new crucial revenue drivers for sports alongside media rights, event attendance, sponsorship and merchandising. Not only do they help grow a sport’s global viewership in terms of volume, they can boost engagement among fans, creating a more compelling value-proposition for sponsorship and advertising.

That is why, according to “Show Me the Money!”, regardless of the role an organisation plays in sports, it should have a unified digital strategy to unleash new opportunities for growth.

Describing digital technologies as the “secret sauce” for monetising fan engagement, “Show Me the Money!” notes that a successful digital strategy is all about augmenting the fan experience. This could mean enabling people at the stadium or trackside to experience sports in new ways or connecting people around the world to the live action in the most immersive ways possible.

Digital platforms also allow sports to create more emotional connections: more direct access to leading sports stars through platforms like Instagram helps fans identify with the big personalities. This makes them “stickier” from a commercial perspective – so more likely to buy TV and streaming subscriptions, more likely to attend events and more likely to buy merchandise.

Other key findings of the report include:
•The lines between traditional and digital media platforms have blurred, causing a seismic shift in the entertainment landscape, tearing down traditional geographical barriers, and highlighting the need for the sports ecosystem to rethink how revenues are generated.
•Digital platforms are giving sports access to geographies and audience demographics they were previously unable to reach.
•The approaches the sports ecosystem is taking to reach new audiences and improve fan engagement are highly interrelated: the desire to get more people streaming live content on Facebook does not negate the necessity for packing stadiums full of fans.

“This report demonstrates that 2019 can be a defining tipping point for the sports industry,” said Mehul Kapadia, Managing Director of Tata Communications’ F1 Business and the company’s Global Head of Marketing. “Digital technologies are kick-starting a new era of fan engagement, and it’s going to be fascinating to see where the journey takes us. Yet, it’s important to remember that digital technologies are the friend, not the enemy, of the live experience. So, as the digital fan experience gets better, the pressure is increased to ensure that fans at venues can engage with the action in new ways too. A holistic fan engagement strategy enables broadcasters, rights holders and other key players in the sports ecosystem to maximise the commercial opportunities that digital platforms offer.”

From a broadcasting point of view, Marcus Parnwell from OTT platform DAZN agrees and points to the example of Matchroom Sport which has expanded big-time boxing beyond the ring and into a “collective fan experience which can be shared and augmented through OTT broadcasting, live-streaming and social media”.

Formula 1 Global Head of Digital and New Business, Frank Arthofer, acknowledges the role of digital in engaging with younger audiences: “The direction of travel is to evolve digital platforms like official websites and social media channels to become content hubs for fans and a place for brand partners to integrate authenticity into the storytelling.”

In the golfing world, European Tour Senior Strategy Manager, Tom Sammes, describes digital as a “test bed” for new developments such as 360° live broadcasting, AR and VR, and believes digital is sport’s biggest opportunity to reach a new audience. Tricia Weener, Global Head of Partnerships of HSBC – a long-term golf sponsor that also has long-standing partnerships with rugby sevens and tennis – agrees, calling digital the “lifeline for today and the future”.