Will technology ever disrupt the Sports Industry?
Technology is disrupting a growing number of industries. Big Data, automation, decentralisation — these concepts continue to attract entrepreneurs of all breeds, looking to bring tech innovation to their home turf.
Sectors like finance, retail and transportation have undergone radical transformation facilitated by new technology, with technology startups like Uber or Alibaba severely disrupting their respective industries.
Playing Catch-Up
In sports, technology has had a big impact in the way sports are played and refereed — think Goal Line technology in football or the HawkEye system in tennis. There are startups producing intelligent sportswear that tracks and improves your performance or helps protect you from injuries. There are apps connecting people who want to play sports on a recreational level. There are apps like Endomondo, which help organise, track and share workouts. Sport industry as a whole is slowly beginning to transition into the digital, networked economy.
As technology begins to take root, the industry adjusts and shifts. There are startups out there trying to challenge the status quo by leveraging innovative solutions to streamline processes like equipment sharing, meetups and gaming. As an increasing number of these startups enter the industry and succeed, the sports industry will become more interactive and inclusive.
An obvious entry point for tech startups into the sports industry is the streaming business. Video streaming platforms like MLBAM have already made their entrance and are continuing to disrupt the traditional broadcasting sector at a rapid pace. As users get increasingly comfortable with consuming live video content on mobile and on the go, streaming remains one of the most obvious and most profitable avenues for tech companies to get a pie of the sports market.
Then, there is the statistics mania. If you try talking to a NFL or NBA fan today, they will almost certainly be able to bury you under a pile of stats they know by heart after having watched last week’s game coverage. The advent of sports analytics and data processing platforms means that not only sports are being intensely quantified — there is a whole new sector emerging. It’s at the intersection of fantasy sports, e-sports and social media.
Reshaping the Industry
A good example of the potential in this sector is Team 11, an India-based company which offers online fantasy cricket, football and basketball games. It also has a networking module and a sort of a social arena where fans can interact, chat and share the passion they have for their respective sport. The company netted a whopping USD 100M in 4 rounds of external funding.
Another innovative player is Pixellot, a US company that automates sports production solutions and enables its users to easily produce high-quality game and player videos at significantly reduced costs. The era of on-the-go sports streaming is almost here and whoever will be able to introduce a scalable technical solution will dominate this market.
Rooter, another company from India, is trying to build a sports social network. It built an app that allows people to track their favorite sports and teams, notifies them before games start and allows fans to connect with each other by playing an in-built prediction game and chat with each other in real time. All while tracking live scores, player performances, stats and commentary. It is an interesting attempt at tapping into the global pool of sports fans and creating a service that offers them more than one thing.
The Rise of eSports
The rapid growth of the game industry facilitated a burgeoning e-sports market. It continues to grow and the market revenue is expected to cross USD 1 billion in 2019. E-sporting events tend to be centered around franchises, and events like Halo 5, CS: GO or League Of Legends have been reported to have prize pools of USD 1 million. Then there are franchises like EA Sports’ FIFA, which introduce e-sports elements into their signature titles. In FIFA, players can now purchase and trade cards of real football players that they can later use in-game. Revenues from the “Ultimate Team”, as the game mode is called, are reported to be in excess of USD 800 million. These in-game purchases account for almost 30% of full-game sales — a shocking amount considering the low costs of production and maintenance for these features.
Looking Ahead
Large quantities of supporters with high engagement rates, entertainment value and shareability are key sports industry assets that could help it grow into the new digital economy. Companies that are able to best understand and tap into those assets could end up having a major part of the pie as the industry enters a period of convergence and digitization.
