The Race for Innovation in Sports Tech
Whether it’s tuning in to football on the weekends, cheering on your kid’s soccer team or going for a weekend run, the way people interact with sports, both as fans and athletes, has evolved over the past few years. Why? Technology, of course. Clubs, leagues, players, media companies, colleges and even high schools are investing in technology to engage fans, enhance athlete performance and make participation in sports more fun. Intel CEO Brian Krzanich was spot on when he said “consumers are choosing experiences over products.”
Show me the money
It’s hard to pinpoint just how big the sports business is, but A.T. Kearny believes pro sports revenues, plus sales of sporting goods, apparel, equipment along with spending on health and fitness generates as much as $700 billion a year globally, or 1% of global GDP. If you were to include college, high school and children’s sports, that number would be even bigger. And there’s money to spend in youth sports: 20% of American parents spend more than $1,000 per month on youth sports, according to a survey by Ameritrade.
When it comes to the massive sports-tech sector and which areas hold the most potential for startups, there are five very distinct markets: pro; D1 college; D2 and D3 college; youth and amateur; and eSports. These markets are all increasing their use of technology across the board, but the pro and D1 college sectors invest the most heavily in technology, making them fertile ground for startups. There’s also a trickle-down effect as technology moves from the low volume, high value pro sports market to the low cost mass-market.
So what are the hottest growth areas for sports?
Athlete performance: In today’s high-stakes sporting events, athletes use every tool at their disposal to improve their performance. Nutrition, gear and practice aren’t enough and today’s athletes are turning to VR simulators, performance data analytics and wearable devices to improve their games. Startups such as ShotTracker, Hudl and PlaySight are just some of the companies tackling this emerging sector. These technologies are for the serious athlete and coach who want to analyze every play and motion data.
Gamification of sports is also helping increase amateur participation in sports. Companies like TopGolf, Strava and Peloton are leading the way in increasing physical activity for amateur athletes by gamifying these activities and making participation more social. Leaderboards and interactivity motivate their customers and users to return to try and beat their or their peers’ previous score.
Fan engagement: Fans can never get enough of apps that help them get closer to their favorite teams or players. Startups like WSC Sports, FanDuel and ScoreStream allow fans to get byte size pieces of shareable content, create fantasy lineups and engage in live chats during sporting events are gaining popularity. Soon we’ll see AR apps that allow fans to point their smartphones at the field to see overlays of data, commentary or graphics as the game is happening, as well as VR experiences that allow fans to feel like they are “on the field” with the players. Fantasy sports, social media communities, over-the-top streaming of interactive video and highlight reels are also examples of fan engagement platforms.
Social media already plays a crucial role in driving fan engagement. Gareth Capon said it best in his article titled, “Social video will activate the next billion sports fans.” Sports highlights, commentary and messages distributed via social media platforms such as Facebook, Twitter and Snapchat enable clubs, athletes and brands to directly engage with sports fans, further increasing viewership and spend from audiences. Technologies that help create clips, syndicate content and provide brands access to sports fans are going to be major growth areas. OTT video and social also enable the globalization of local sports, reaching fans all over the world and open up new market opportunities.
Distribution and data: On the backend of the professional sports experience are broadcast, video and data distribution platforms that make the online, TV and mobile viewing experience better. Fans have an insatiable appetite for content about their favorite teams and media companies are looking for new ways to distribute that content over smartphones and OTT streaming devices. In addition, startups tackling data analytics for professional sports teams, such as Second Spectrum, provide insights on data collected from an athlete’s wearable and performance device, fan engagement and viewership metrics, and other types of data of interest to sports teams, leagues and media companies.
Another interesting area of opportunity lies in smart sports venues, particularly around customer identity and live fan engagement. Other than the ticket buyer, no one really knows who attends sporting events once the ticket is sold. In-venue purchasing is ripe for innovation, with the ability to purchase food, beverages and apparel direct from mobile apps. AR will enable fans to bring up athlete and game stats and see targeted ads by pointing their phones in certain directions around a venue.
The race for the winning startups in sports tech is well underway. With multiple global markets to play in, we expect a marathon of exciting opportunities to emerge. From pro sports leagues to millions of individuals, we will see more fans engage with their favorite teams, brands connecting with their customers in compelling ways and athletes provided with innovative tools to optimize performance.
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