Sports Analytics: A Dark Horse for Telcos?
Sports has always been a promising industry, but it has reached a whole new level in recent times. The advent of the Indian Premier League (IPL) in 2008 and the increased transfer fees and budgets of football clubs in the last decade indicate the huge investments made in various sports by private companies and governments. Sporting salaries have gone through the roof, with some of the most iconic sportspersons (read Michael Jordan, Cristiano Ronaldo, Tiger Woods, Lebron James, and Lionel Messi) having crossed the billion-dollar mark in inflation-adjusted earnings.¹
With so many eyes watching a sport like cricket or football at any given time, organizations have realized the need to capture the viewer’s attention and enhance the sports-watching experience. This is where a new industry has been growing tremendously while hiding in plain sight: Sports Analytics.
If sports is insanely marketable, sports analytics has an insane market potential
According to a report from Grand View Research, the Sports Analytics market size is worth $3.52B in 2023 and will see a CAGR of 21.5% from 2024 to 2030,² crossing $13B by the end of the decade.
We already have major examples in B2B and B2C
The industry has touchpoints along both B2B and B2C. When you consider the B2B segment, the sports analytics industry consists of sports technology companies providing statistical analysis to federations and sports teams to improve player performance, manage injury records, track player movements, formulate specific training programs, and build strategies for success on the field. Kitman Labs for the English Premier League is one example that comes to mind.³ Federations are now increasingly looking at sports technology companies to provide them with a platform to review their player development and grassroots programs.
Within the B2C segment, sports technology companies build mobile applications or APIs to be used by broadcasting companies to relay key match statistics during the game in real-time. Broadcasting companies in this space are increasingly looking to technology companies to enhance the sports watcher’s experience by introducing camera angles never seen before. Intel True View⁴, which is used by NFL teams and notable football clubs across Europe, offers 360° replays with freeze framing, gamifying reality. This is aimed at sports viewers to enhance their experience further, thereby enhancing their watch times.
Now, what is in it for telcos?
Here is where telcos come into the picture. Telcos in the past decade have increasingly moved from their core operations towards becoming a technology company, where internet and data services form the base of the entire portfolio. With telcos today offering both broadcasting and technology services, synergies can be leveraged to take sports analytics solutions forward to customer segments.
Engaging audiences through sports analytics promotes higher watch times and enhances data collection by telcos. This has in turn revolutionized the targeted advertising process. For instance, the IPL 2024 ad slot for 10 seconds was estimated to be worth 1.7M INR. However, media planners are increasingly looking to move away from traditional TV advertising and towards digital streaming platforms, owing to superior targeted advertising capabilities.⁵
Business exists across the entire value chain
It is now increasingly clear that sports analytics unlocks revenue streams and cost optimization programs across the value chain. Some of them have been listed below:
- Providing tactical know-how and insights from overflowing data to sports teams unlocks success on the field, thereby enabling the team to bag competition prize money, sponsorship deals, sustained ticketing revenues, and identify alternate sources of revenue for elevating fan experience.
- Broadcasters making use of the service see a jump in viewership, which can translate into an increase in customer base and give reasons to increase ARPU sustainably.
- Sports equipment manufacturers who subscribe to such analytics platforms can now read into player data, and drive customization and innovation in product designs, which further improve the performance of players and change the way a game is played.
- With telcos stepping into OTT and digital content distribution and more viewers appreciating the elevated sports-watching experience, both the quantum and type of data that can be captured will help companies leverage more money for their advertisement slots, and marketers will be willing to pay a premium for a reduction in CPA (Cost per Acquisition).
Where are we headed in this industry?
In contrast to the positive factors that should be aiding the momentum of sports analytics, the industry is quite fragmented, and many startups get small amounts of funding and are unable to build on the same. While wearable device manufacturers like Whoop have gained the most investments in this field,⁶ the next wave of growth is likely to occur in viewers experiencing new ways of watching sports and in sports teams leveraging analytics to win on and off the field.
One of the biggest sports teams facing companies, Hudl,⁶ provides video analytics-based training tools for athletes and coaches and is currently at the Series B stage with a total funding of $230M. Similarly, on the B2C front, companies like Sportsradar,⁷ with a funding of $98M,⁶ provide sports data APIs, widgets, and OTT solutions to elevate viewer experience and marketing services to acquire and retain customers.
Until now, broadcasters have relied on startups to serve their needs, with the possible thought process being that it is too much of a hassle to build such an offering from scratch, despite having deep pockets.
F1 TV has taken the role of broadcasting and moved towards building tiered subscription plans, providing viewers with live onboard feeds and live radio feeds of each driver while watching the race.⁸ Viewership on ESPN US reached the million mark per race in 2022, a 28% increase over the previous year, and operating profits for Formula 1 went up by 333% from $40M in 2021 to $173M in 2022.⁹
In short, the industry is already headed towards in-house solutions and telcos need to act fast in their bid to become truly technology companies.
