The Sports Ecosystem is Starting to Feel the Effects of Blockchain Technology & Tokenization
To begin, let’s do a quick summary of the basics. What is tokenization? Tokenization is the process of converting some type of asset into a digital token. From there, the token can be stored, moved and recorded on a blockchain system. And blockchain guarantees the ownership of the information is unalterable. Therefore, we can take an asset, tokenize it and will have then created its digital representation.
Blockchain technology and the use of tokens can prove beneficial to nearly any industry where a transfer of assets is happening. The creation of digital tokens is so unique because they can be used as currency in any conceivable marketplace. The benefits of using cryptocurrency include greater transparency, lower transaction costs, improved liquidity as well as the opportunity to own a share of industry as opposed to having to go ‘all in.’
While many industries have already embraced tokenization, how can sports and in particular sports marketing take advantage of the blockchain movement?
2018 has seen an influx of blockchain experimentation within the football world. Clubs have begun to utilize aspects of blockchain technology, bringing an unparalleled level of transparency to sports marketing. Not only can changes be made to ticketing practices, but also sponsorship and partnership agreements as well as the buying (or transferring) of players and clubs.
Beneficiaries of this shift include rights holders, players, sponsors, fans a and other stakeholders. Through the use of blockchain technology and tokenization, clubs will be able to eliminate ticket touting, guarantee the authenticity of memorabilia, and make any — and all — payments instantaneously.
For example, the football industry has become one of the flagship entities to adopt tokenization in order to benefit the leagues, fans, and players. Fans can now buy club-specific tokens, allowing access to a variety of exclusive benefits including the right to vote on decisions their favorite club makes. Blockchain and tokenization are allowing these football clubs to hear first-hand what their fans have to say. This will create a better relationship between the two parties and increase fan engagement in the process.
In regards to rights holders and stakeholders, they benefit from this decentralized investment model.
This past August, UEFA (Union of European Football Associations) announced a successful blockchain-based solution for ticket delivery directly to an individual’s mobile device. 100% of the tickets for the UEFA Super Cup Final between Real Madrid and Atlético de Madrid in Tallinn, Estonia were delivered via a blockchain-based Android and iOS apps.
The successful blockchain-powered pilot is just the beginning. The initiative aims to provide secure ticket distribution that makes for safer and simpler ticket-buying processes.
Juventus announced that this fall they plan to launch the Juventus Official Fan Token with the help of Socios.com, a blockchain-based fan engagement platform. The Fan Token will allow fans across the globe to interact through a mobile voting platform giving them a chance for their voices to be heard by club executives.
“Juventus is glad to welcome Socios.com to our partners,” said Giorgio Ricci, Co-Chief Revenue Officer, Head of Global Partnerships and Corporate Revenues of Juventus. “At the Club we are always very careful and pro-active towards innovation and new technologies. Together with Socios.com, we believe that we can offer new opportunities to our worldwide fan base to engage in cutting-edge way with their favourite club.”
Havas Blockchain has also created a new enterprise, Havas Sports & Entertainment. HS&E has launched a blockchain-powered loyalty program for sponsors and sports organizations that rewards fans for their participation in various programs. By partaking, fans are rewarded digital coins that they can then trade with other fans, exchange for swag, or gain access to exclusive content and experiences. The idea behind this new marketing initiative is to create new opportunities and revenue streams for sports organizations. Also, the coins can collect data from fans which advertising experts can use to enhance their fan targeting practices — “fanalytics.”
How Is Instant Sponsor Using Blockchain & Tokenization In Sports Marketing?
Through the use of blockchain technology and smart contracts, Instant Sponsor has created a premium sports marketplace that facilitates secure, efficient and cost-effective sponsorship inventory transactions between brands and rights holders. This new and powerful ecosystem has the potential to disrupt the sports marketplace as we know it.
Between 5–50 percent of a professional sports team’s sponsorship inventory goes unsold each season, resulting in billions of dollars of lost revenue across the sports sponsorship industry.
Instant Sponsor lowers the barrier of entry for brands to buy that unsold inventory on short-term contracts and eliminates the elongated process of securing sponsorships.
Instant Sponsor, like other blockchain-powered sports businesses, has the profound potential to completely transform the sports and entertainment marketplace. Times are changing, and the blockchain technology is starting to shift into a more mainstream software for companies to move further into an already digital-dominated age.