Game Changer: The Future of Sports

Sports Fanatics worldwide live vicariously through their favorite sports, favorite teams, and favorite players, where they shoulder each loss and celebrate each win, just as the athletes do.

Sports are rooted deep within many individuals lives, and provide different things for different people. On a fundamental level, and basis for this paper, Sports provide entertainment. But they also provide a social construct amongst friends. Research topics for when you’re bored (definitely not sitting in statistics). Stories about how great someone was back in high school, how good they would have been. Sports are much, much more than entertainment. It provides people with a passion, free time, comradery, rivalry, bragging rights, and the feeling of being a part of something. People use sports as a get-away, a feel good, and an outlet. Sports tap into to the most rudimentary and humanlike instincts that we have, appealing to the competitive nature of individuals, and the unparalleled excitement of winning. Basically, sports make people feel alive.

The world will incur many changes within the next few years, taking the world of sports and all it encompasses with it. The 4 trends and technologies to pay attention to that could weigh heavily on how marketing efforts are going to change in the future are : (1) Virtual Reality (VR), (2) Jersey Advertising Placement, (3) Cord Cutting, and (4) Big Data.

Virtual Reality

Virtual Reality will be a total game changer for the industry. As there will be a forced to keep up with technology, and provide the latest and greatest, most convenient, and highest quality product/ content to the consumer, VR could have the ability to deliver an “in game”, or at least sideline experience to the viewer. VR can be used in many ways throughout sports, from preparation and training or athletes themselves, and provide a total in game, immersive experience for the viewer.

Here’s a video that shows an NBA game experience through a VR headset.

As you can see, the technology is just not quite there yet. There are some minor adjustments and perfections to be made, but overall, a very exciting concept. As VR will present the opportunity to watch a game, or match, or whatever it may be, courtside, ringside, or on the sidelines. Total immersive content.

VR will enable sporting franchises to sell “tickets” to anyone, anywhere in the world, and give them all the same experience. It could offer the experience of sitting front row at the super bowl, from the comfort of your own home, or watching a boxing match at ringside, so close you can see each sweat beat. The opportunities are endless. Not to mention the fact that there is unlimited cap room on ticket sales. That experience can be streamed absolutely anywhere in the world, to as many people that are willing to pay as possible.

VR will break down location barriers, provide a more badass, immersive experience, and become one of the cornerstones of future consumption methods of not only sports, but all content.

The Opportunity here for marketers is tremendous. As one puts on a VR headset, they take a step out of reality, and enter another world. All of their attention is on one thing, and one thing only, blocking other distractions. The fact that when a VR Headset is put on the person is immediately immersed, and takes a step away from all other surroundings, means that there is an opportunity for touchpoints of undivided attention.

Jersey Advertisements

2.5 inch square patches are the new advertising medium when it comes to sports, as Leagues and teams are now selling advertising space on jerseys to present a company logo. The NBA has become the first major American professional sports league to sell jersey space, and expects to generate over $100 million per year. This will spark a new wave of corporate sponsorships. This is only the beginning, as this will continue to evolve as a way for teams to monetize even more efficiently.

This strikes the question- or controversy- Who owns the rights to the jersey? The team or the individual? Or both? Will companies target bigger name, higher profile athletes and sponsor them only? Considering that all athletes compete at different levels, in front of different viewers, and are plain and simple, just better, how is revenue evenly distributed? If Lebron James and Deron Williams both have the same logo on their jersey, but Lebron obviously puts the logo in front of more eyes, is there a fair or adequate way to accurately distribute the revenues? The list goes on and on, and will soon be in full effect around the sports world.

Cord Cutting

Cord Cutting has and will continue to disrupt sports, as there has been a huge push away from paying for content, and the internets uncanny ability to enable users to stream *almost anything for free. ESPN, the once all powerful and perhaps best media company to have ever existed, has recently laid off 100 worker. This is due to Cord cutting, the unforeseen competitors like OutKick that produce free content, and ESPN’s Business model from the 1900s.

ESPN spends $1.9 billion for 17 Monday Night Football games every year. ESPN and also pays $1.47 billion to the NBA, $700 million to MLB, $608 million for three college football playoff games, $225 million to the ACC, $190 million to the Big Ten, $125 million to the Pac 12 and $120 million to the Big 12. Excluding the contract with the SEC, which has its own channel within the ESPN. At minimum, they’re handing out $6 billion per year to broadcast live sports. This kind of cost structure will be unable to generate prolonged revenues in today’s society because of all the competitors producing content at such a dismal percentage comparatively.

A study last year showed that a quarter of all American households do not have a cable subscription. Between 2008 and 2011, 2.65 million people cancelled their cable subscriptions, and this trend has dramatically accelerated since. In 2014, 8.2 percent of people said they abandoned their service — an increase of 1.3 percent from 2013. In 2015, this widescale abandonment escalated, with 1.1 million people dropping pay TV — four times the decline seen the previous year. In just the second quarter of 2016 alone, 812,000 people cancelled their service.

Big Data

Big data will take the sports industry by storm as it will individualize experiences. Previous views, purchases, likes, interests, and behavior will all be accounted for, and will optimize for the user. Big Data will take relevant experiences, based on favorite sports, teams, players, ect, and create content specifically tailored to you, showing exactly what your are interested in.

A few ways that Big Data will be used in marketing:

  • Public Relations: Use big data to validate and reinforce a story, brand or company, there is data available on every topic, you just need to look
  • Social Media & Brand Monitoring: Track what is being said about a brand or company on social media. Use big data to learn about perceptions
  • Social Media Engagement & Loyalty: One of the best ways to build brand loyalty is to engage with people that are talking about your brand. Big data helps you Identify these individuals and define a “typical user”.
  • Market Trend Identification: What people are currently talking about can be helpful in successful business decisions Use big data to Identify trends and predict behaviors.

Aside from awards shows, Sports are some of the only live entertainment that is still broadcasted. Big data will take the information and analyze it, deliver it to the right consumer, at the right place, and the right time, thus optimizing fan engagement and tracking.

The Sports industry is ever changing, and ever evolving, and constantly challenging all aspects to keep up. The current state of society, applied to the trends and advancements in technology have revolutionized everything about sports, and brought the consumers into the lives of athletes. There is no privacy, and no secrets. Fans are now closer to the athletes that ever before, as they get a look into their personal lives.

Last year just before the 2016 NFL draft, the presumptive number 1 pick, Laremy Tunsil experienced the wrath of social media fist hand. Laremy had the right idea to post a video of himself smoking a bong on twitter, and share it with his followers. Within minutes it had millions of views, and he had dropped from number 1 to 13. This is just one example of how technology is testing the waters of individuals privacy leaving no margin for error in ones personal lives.

The intersection of Virtual Reality, Cord Cutting, and Big Data is where marketing is headed.

Sporting events will begin to be live stream direct to consumer, using a pay per view and subscription based business model. This leaves the consumer only paying for the content they want, when they want it. Consumption will stray from TV, and live streaming will increase, as will VR viewings. The surge in online viewing will lead to more Big Data, and optimized advertising placement based on previous behaviors as well as current interests in content. VR will also present undivided attention to whatever is presented on the headset, therefore offering the platform to optimize as well. Overall, the culmination of these trends will lead to major changes, but opportunities, in the world of sports marketing.

Author: Shelton Todd, a Senior Marketing student at the University of Montana.