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Edition #10 – Mobile Ordering

Analyzing Mobile Ordering: Why Your Organization Should Adopt, What Not To Do & The Players In The Space

So I haven’t attended an in-person game since the pandemic began. But man am I itching to post up in the Yankee Stadium bleachers on a hot summer day. Vaccine shot number two on Monday and then straight to the ballpark (two weeks later).

Speaking of returning to venues, I’ve spent a lot of time over the past two months talking to companies building future in-venue technology. The next several editions will discuss emerging technologies changing the stadium experience. This edition will kick off the series by focusing on mobile ordering & in-seat delivery. 

One housekeeping item – If you want Chatting Sports Tech delivered to your inbox, subscribe at the top of this page. 

Let’s dive in…

All the rage coming out of COVID is stadiums upgrading to fully contactless payment. Is this the same as mobile ordering?

Not exactly. Contactless payment generally refers to the use of radio frequency identification (RFID) or near field communication (NFC) to make secure payments. Think paying with your smartphone by holding it near a point of sale terminal. Essentially you remove cash entirely and eliminate the need to physically hand over a plastic card.

By mobile ordering, I’m referring to the ability to place an order through a smartphone and eliminate waiting in concession lines or flagging down a hawker in an aisle. 

Going contactless doesn’t address certain pain points of concession ordering. Contactless might speed up lines but doesn’t eliminate them. Fans are still distracted from watching a game. There’s no benefit to the workforce who still need to manually key in an order and then quickly round up the items. 

Early in the pandemic, everyone clamored to go cashless since the coronavirus was assumed to live on surfaces and be transmitted through touch. Though proved untrue by science – don’t stop washing your hands however – the pandemic provided the spark for more venues to go fully contactless even though the technology had existed for a while. But don’t automatically assume headlines that a venue has gone contactless means it implemented a robust mobile ordering strategy. 

Gotcha. So walk me through the value of mobile ordering.

Let’s look at the benefits of mobile ordering from three angles: 1) Improved customer satisfaction, 2) Technology can drive more dollars and 3) Removing frictions aligned with cash.

  1. Improved customer satisfaction – When I meet a person who enjoys waiting in lines, it will be the first in my 32 years on this planet. People HATE lines, especially mid-game where time spent waiting could result in missing a game’s most exciting play. With mobile ordering, fans who value watching the game over getting food have an avenue to order efficiently. 
  2. Technology can drive more dollars – Besides increasing your customer base, mobile ordering technology can drive additional revenue through higher per caps. If used effectively, promotions and push notifications can increase cart size. Push inventory that’s not selling. Sell hot dogs 50% off within 5 minutes of a big play. Add popcorn to an existing item for $2. As long as you cover marginal cost, additional sales are accretive to your bottom line. 
  3. Removing frictions aligned with cash – We touched on this above. Cash is messy. You don’t collect any buyer payment history. It’s slow to process. It’s vulnerable to theft. Removing cash speeds up the check-out process, resulting in an increased volume of sales.

Those benefits seem obvious. Should I rush my venue to implement mobile ordering?

Lesson for any technology implementation – When you fail to consider the human element and training required, responses can be disastrous. Per Front Office Sports, MLB fans loudly complained about concession lines during opening weekend, forcing the teams to revert back to traditional walk up ordering from planned 100% digital ordering. Clearly, the pandemic accelerated the move to cashless but teams were ill prepared to deal with the high volume. 

Quick clarification before proceeding: We generally only hear when things go wrong. It’s why the media covers plane crashes so intensely but never mentions the tens of thousands of planes landing safely everyday.  Before you assume every mobile ordering implementation has hiccups, understand many venues successfully launched mobile ordering without a blip that you’ll never hear about. 

That said, it’s also very possible those MLB teams lost fans for life during those games. The in-venue experience is in constant battle with at-home viewing. Adding miserable concession lines can be enough to tip the scales for some people.

You mentioned the human element and training required. Can you elaborate on those and other operating challenges for implementation?

Identifying useful technology is only the first step to making life easier. The implementation piece is often the bigger determining factor whether technology can achieve its intended purpose (hence, why we are building a service to help sports properties navigate the entire sourcing through implementation process). 

Here are the operating challenges in my mind:

  • Awareness – People won’t order through mobile if they don’t realize it’s an option. How will you introduce fans to mobile ordering technology? Will there be in-stadium signage? Will there be a stadium announcement? Will fans be made aware prior to arriving? Success relies on a coordinated effort between venue operations and marketing. 
  • Access – In other words, how will customers be able to place orders? Mobile app or a QR web pass-through? I have a couple thoughts down below but what method you determine relies on connectivity in the stadium. More thoughts on this in a future edition. 
  • Integration – A customer facing ordering platform will often need several integrations to be successful. That includes: 1) Point-of-sale system – To accept payments, 2) Inventory Management – Back end reconciliation of supplies, 3) CRM – To collect customer information, 4) Mobile Wallet – To allow people to link branded cards and gift cards (optional), 5) In-Seat Delivery (if a separate vendor) – See below
  • Fulfillment – Fulfilling mobile orders is a different operational process. Will fans pick up from an existing concession stand or a designated pick-up area? If you use a designated pick-up area, how does that impact the customer flow in the venue? Regardless which you choose, you will need to retrain your workforce to ensure mobile orders get the same attention as walk-up customers. If I had to guess, this was a major factor in the opening weekend MLB fail. 
  • Workforce Size – Similarly, understanding the demand when implementing mobile ordering will determine whether additional staff are required. Normally, you’d consider piloting in a small area of a stadium but the pandemic forced many venues to adopt without a trial period. If mobile ordering increases volume of orders by 25%, will you have enough employees to adequately handle?

How does in-seat delivery factor in?

How I think about it – in-seat delivery is absolutely crucial coming out of the pandemic and for the next generation of fans. 

Why? Behavior is sticky, breaking habits is difficult and Americans are generally lazy. With everyone stuck inside, the pandemic accelerated the reliance on delivery services to the point customers now expect to have that option. 

With in-seat delivery, you face some of the same operational challenges as mobile ordering, namely adequate staffing and retraining your workforce. But if you can figure out a strategy that redeploys hawkers for deliveries, your operational flow can be made more efficient by transition from push supply to pull demand. 

What else should I consider as part of my mobile ordering strategy?

Your mobile ordering strategy shouldn’t be an isolated decision by venue operations. Rather consider other organizational objectives and how mobile ordering can influence fan behavior.

What’s an example? Let’s say a goal is to collect more fan information and supplement your CRM system. An asset at your disposal is your team mobile app. Thus, you can force fans to download your mobile app to access in-venue mobile ordering and then push additional notifications to that fan outside that specific game. Venue operations vendor selection would therefore benefit the marketing and sponsorship teams. 

What’s another example? An effective mobile order strategy can redirect flow positively. If you put a food pick up zone in front of a merchandise store, a fan may notice a cool new jersey they ultimately buy. Before mobile ordering, they would have headed straight to a concession stand, waited in line, maybe gotten frustrated and then headed straight back to their seat with a singular focus. With mobile ordering, free advertising of merchandising through strategic positioning. 

Who are the companies playing in the stadium space? 

There are a bunch of companies that have emerged. This list doesn’t even include mobile ordering solutions for non-sports use cases like restaurants. 

Since many of the companies aren’t solely focused on mobile ordering, I’m going through the list based on value proposition:

  • Don’t have sufficient WiFi in-stadium? UK company SwipeStation has built a mobile ordering system using kiosks that doesn’t require connectivity. Additionally, their system simplifies the order preparation process to reduce the training burden on concession staff. 
  • Looking for a low cost provider? Partake, which also has multiple other mobile fan engagement features, has partnered with multiple minor league baseball clubs at the lowest price point I’ve seen.
  • Want a company with a flexible contract model? FanFood offers fee sharing agreements or hybrid pricing (i.e., fixed per stand) allowing a client to choose the structure best fitting their situation. 
  • Think your fans are sick of another mobile app? TEXT4Service from TEZ Technologies enables ordering through a QR code without needing to overhaul your venue point-of-sale system. 
  • Looking for a company that is 100% focused on mobile ordering? Tapin2 provides a complete product set enabling mobile ordering including order taker hardware, kiosks, hawker technology, suite focused products and fulfillment solutions. 
  • Is in-seat delivery a priority? Several companies have grown since starting as in-seat delivery specialists, including SeatServe, Stadium Drop and sEATz
  • Do you have an existing POS system? That company may have built their own ordering solution. For example, point of sale company Appetize has built out its own mobile and online ordering software. 
  • Approaching mobile ordering from an ecommerce focus? Venuetize takes a mobile first approach to in-venue ecommerce, offering mobile wallet and a native loyalty & rewards program in conjunction with mobile ordering capabilities. 
  • Looking for a comprehensive venue solution? VenueNext combines mobile ordering with mobile wallet and point of sale as a complete offering.

That hopefully provides some quick context but if you’re looking into adopting mobile ordering in your venue and want to learn more, don’t hesitate to reach out for guidance.

That was a lot of helpful information. Can you summarize quickly?

Absolutely. Key takeaways:

  • The benefits to mobile ordering are numerous, including improved customer experience, ability to drive additional revenue and remove frictions associated with cash.
  • However, failing to consider operational challenges before deployment can result in headaches (see MLB opening weekend wait times).
  • Deploying mobile ordering technology effectively can help drive other organizational goals. 
  • The space is crowded. Certain mobile ordering companies have approached the service differently, though at the end of the day, customers only care about having a seamless ordering experience. 

Until next time,

– Charles

Future topics in this series will include digital ticketing & mobile wallets, smart check-out technologies, safety & security, connectivity and in-stadium engagement.

If you enjoyed this edition, tell your friends or colleagues about Chatting Sports Tech. Add me on LinkedIn and follow me on Twitter @ccampisi_EES.  

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Edition #9 – Smorgasbord

Checking Back On Old Editions For Changes And Updates

I dislike how little traditional media revisits past articles and predictions. Opinions and positions shouldn’t be static. When new information comes to light, we should reconsider old perspectives.

With that in mind, I’m going to periodically revisit old pieces to highlight what’s changed and add new information or tidbits originally left out.

Now you may be asking ‘Why is this edition called Smorgasbord?’ Great question, reader. Well, smorgasbord is defined as a “buffet offering a variety of hot and cold meats, salads, hors d’oeuvres, et.” When I was growing up, anytime my mother needed to clear out the fridge, she would call it ‘Smorgasbord Night.’ Clever marketing to get us excited about week old leftover ham.

Since I’m going to jump across past topics, I’m calling this the smorgasbord edition, in honor of my lovely mother.

Let’s dive in…

Edition 1 Super Bowl Special & Edition 1.5 Super Bowl Post-Mortem

  • NFL Media Rights: When the Super Bowl Post-Mortem was released, I mentioned the NFL was going to quickly sign new media deals and that the dip in Super Bowl viewership would have no impact. Well I’d say $105 billion over 11 years and increases from all existing media partners is a good outcome.
  • Issue with Nielsen Ratings: Ratings for sports are down across the board but could it be caused by the way Nielsen measures audience? Nielsen claimed no, rebuking an audit request but it does beg the question. I have a feeling we haven’t heard the last of this issue.
  • Correction on LiveLike: I spoke with someone at LiveLike after publishing the piece and realized I made a small mistake categorizing them as a VR company.  The company started in VR but when mass adoption of VR hardware never materialized, it pivoted more to real-time engagement. 
  • Bullish on AR/VR: That said, I’m still very bullish on the long-term potential of AR/VR. One reason? Facebook announced that 15% of its current org chart is working on solutions in the space. Another reason? The ability to simulate in-game action for training purposes. Here’s the NJ Devils using VR training.

Edition 2 Power of Community

  • Superfans: The community edition touched on building social+ companies, offering your customers community instead of a simple rewards program to build loyalty and why you should hone in on super fans per the pareto principle. This billboard article highlights the technologies enabling artists, creators and athletes to interact directly with their super fans as well as the economics behind it. 
  • Brand Love is Built on Emotion: Thought this was a good op ed in sports pro media reiterating many of the points raised in the community edition. Two specific quotes worth highlighting: 1) Brand love is built on emotions, not transactions; and 2) Brands need to understand the zeitgeist to build and grow human connections.
  • Community Thoughts From Twitter: Good notes from podcast guest Zoe Scaman around the idea that in social tribes, we seek a sense of togetherness and aligned passions. Meanwhile, here’s another thread explaining why soccer clubs are great examples of how to build communities at scale since there’s so many entry points to participate (buying merchandise, watching on tv, going to a game, etc.) 

Edition 3 Why Your Organization Should Pay Attention to the Fan Controlled Football League

FCF Updates: At the time Edition 3 was published, the FCF was only two weeks in but I made the argument there was serious staying power given the league didn’t copy the failed AAF and XFL models. With the season completed, we can point to a couple metrics illustrating the first season was a huge success.  Viewership increased from 735K in week 1 to 2.1M in week 5 while over 2K fans collectively invested $1M in team ownership. 

Edition 4 Future of Ticketing & Edition 5 Ten Ticketing Takes

Edition 4 discussed the potential for virtual seating to create new inventory and bring immersive experiences into the living room. No updates here – the technology is still being built by companies like Tru Spot

Some updates on the state of sports ticketing:

  • Rewarding Season Ticket Holders Despite Capacity Constraints: If you are a sports property and have been operating with limited capacity, you’ve probably faced the dilemma of how to prioritize fans when demand outweighs supplies. I thought this blog post had some good ideas but the starting point must be understanding who your fans truly are. And that requires using technology effectively. 
  • NFTs & Tickets: I mentioned how I was bearish on NFTs being attached to tickets except in unique situations. I also never mentioned the current high transaction costs with crypto (gas fees) which need to drastically decline to handle existing ticketing volume. That said, clearly there is an industry focus on bringing this idea to life, with SeatGeek in talks to roll out a prototype with the NFL and NBA. 
  • Breaking Up the Ticketmaster Monopoly?: Developing story worth monitoring – Several members of congress want to investigate Ticketmaster’s standing as a monopoly in the ticketing and live entertainment space, claiming damaging impacts to consumers. More to come.

Edition 6 Gamification

  • Robinhood: I mentioned how the financial services company uses digital confetti to gamify the act of buying stocks. Well, less than a week after publishing my piece, Robinhood made the choice to remove its digital confetti feature. As I hinted by labeling fans as ‘losers’, gamification can cover up actual risks behind a behavior. Sounds like Robinhood recognized the confetti was distracting from the company mission and decided to make significant design changes (that or they spun caving to political pressure).

Edition 7 Five on Fan Engagement

  • Fan Engagement & Sponsors: Since publishing, we spoke with the CEO of a ‘fan engagement’ company that intentionally brands itself as a sponsorship platform. Unprovoked, he echoed many of my concerns around fan engagement, including the definition being fungible and the importance of aligning sponsors with activations to drive fan conversion. His company has had recent success from sponsors bringing them directly into properties even if had previously been unsuccessful pitching that same property. The whole conversation speaks to the shifting balance of power from properties to sponsors.
  • Nike & Social Commerce: I wrote some thoughts here (published under David’s name due to a website quirk) why I love Nike’s decision to roll out an app specifically for women with a lot of fan engagement principles.  

Edition 8 The Gen Z Problem

  • Social Media & Challenges: I forgot to include how teams and leagues can utilize social media channels to engage Gen Z through fan challenges. One example? The NHL using Tik Tok and Instagram for an at-home skills challenge.
  • Millennials Killing Cable: Some more research and insights into how the 18-34 demographic has significantly lowered their live TV consumption, while 65+ remains fairly steady. Along the same lines, Gen Z places watching TV and movies way behind playing video games on a survey of entertainment options from Deloitte’s 2021 Digital Trends Survey. As a result, media networks are in the unenviable position of having to extract value from older consumers while adapting to changing consumption habits by Gen Z and young millennials. 
  • Creative Partnerships & Simulcasts: I used Fortnite NFL skins as an example of a creative partnership to garner Gen Z awareness and mentioned the NFL-Nickelodeon Simulcast for the Saints-Bears as a huge success. The NBA decided to aim higher, announcing a new MarvelCast for an upcoming Warriors – Pelicans game. Tune in on May 3rd. 

Until next time,

– Charles

The next edition will examine the Future In-Venue Experience

If you want Chatting Sports Tech delivered to your inbox, enter your email and hit the subscribe button at the top of the page.  

Finally, if you enjoyed this edition, tell your friends or colleagues about Chatting Sports Tech. Add me on LinkedIn and follow me on Twitter @ccampisi_EES. 

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Edition #8 – The Gen Z Problem

How Sports Tech Can Help You Secure Your Next Of Generation Fans

Today’s edition is all about Gen Z. There’s been no shortage of media attention on their sports appetite, with takes ranging from ‘they don’t like sports’ (uh-oh) to ‘they like sports but consume content differently’ (not so bad). Below I’ll share some research on the current situation and then touch on what it means for your organization and how technology fits in.

Two quick housekeeping items: 

  1. Subscribe at the top of this webpage to receive the latest edition in your inbox. For subscribers only, I share a weekly roundup on new sports tech investments on Fridays. 
  2. Check out past editions here. Topics have included community, gamification, ticketing and fan engagement.

Let’s dive in on Gen Z…

Explain this to me like I’m five. What do we know about Gen Z?

Generation Z – Gen Z for short – refers to persons born after 1996. The graphic below illustrates the generational segments per the Pew Research Center:

Although the age cut-offs are arbitrary (i.e., no reason not to use 1998), researchers rely on cohort classifications to analyze changes in views and behavior over time.

Unlike previous generations, Gen Z is digitally native, having grown up in a world with smartphones. 

They are also more racially and ethnically diverse than previous generations and on track to be the best-educated generation but in my opinion, those characteristics would lead us into a discussion around social activism in sports. Since social activism deserves its own edition, let’s table that and focus more on engagement. 

What does research around their fandom and viewership explain?

Research firm Morning Consult released results from a survey on Gen Z fan identity and sports viewing habits. Here are the two most telling charts:

It’s a bleak picture. I’m not surprised by the first chart for two main reasons. Number 1: There are soooo many other entertainment options available. Video game streaming in particular has captured a percentage of the population that would have gravitated to sports in past decades. Number 2: Youth sports participation rates have declined significantly over the past decade. The Aspen institute has some research here

But on the second chart, the key word in the question was live. How often do you watch live sports? And herein lies an issue.

Variety ran a great piece using data from analytics firm the Maru Group showing consumption habits of different age brackets. Granted the brackets don’t line up neatly with generational classifications, but if you use the 18-34 bracket as a proxy for Gen Z behavior, there’s some telling insights. Here are two more charts:

The big takeaway? Highlights are becoming a more dominant means of consuming sports (chart 1) but younger populations don’t consider themselves any less of a fan compared to older generations (chart 2). 

As a sports property, why should you care?

It’s pretty simple. Here’s a quote from NFL’s CMO Tim Ellis from a November Washington Post piece:

“There’s no strategy for bringing in a 35-year-old fan for the first time…You have to make them a fan by the time they’re 18 or you’ll lose them forever.” 

When thinking about customer cohorts for sports properties, you need to aggressively attract young people as the next generation of fans. If you can secure lifelong fans at an early age, they become profitable consumers once they’ve built discretionary income (tickets, merchandise, potential sponsors, etc.). But if you fail to lock Gen Z early, you’ve lost out on 60+ years of value. Meanwhile, your existing fanbase will slowly attrite from natural causes.  

What are interesting strategies you have seen to attract Gen Z? 

Here are a couple interesting ones:

  • The Simulcast Approach – In other words, having a separate broadcast targeted at younger populations. The NFL had great success with the Nickelodeon simulcast of the NFL’s Saints Bears wild card playoff game, bringing in over 2M viewers. Nickelodeon recently brought this model to the NHL, partnering with Islander’s second screen platform for a game versus the Penguins. 
  • Investing Directly in Youth Sport – One example? The NFL and Nike invested $5 million to bring girls flag football to every high school in America. There are selfish motives – Nike wants to sell more gear while the NFL wants to cultivate its next generation fans – but girls who never had a platform to play football also benefit greatly. 
  • Creative Partnerships with Popular Non-Sport Platforms – Popular video game Fortnite allows players to purchase NFL jersey skins for their characters. Fortnite enthusiasts who wouldn’t otherwise watch the NFL could be exposed to the league by seeing one of these skins, starting them on the path to fandom. 

I work in sports and want to target Gen Z. Where and how should I invest in sports technology?

Let’s approach it from two lenses depending on where you are in the ecosystem. 

If I’m at a property, I’m focusing on the fact Gen Z prefers consuming content in highlight form and therefore, investing in social media content creation tools to meet them on multiple platforms. 

  • For Your Internal Social Team – Technology can’t replace human creativity when it comes to producing interesting content but it can make the process more seamless. Slate, Tagboard and Kickly all have SaaS platforms for sports organizations to create templates and graphics, making the lives of social media teams much easier. These tools save your organization time while producing more interactive and visually stimulating content.
  • For Your Athletes – In the college space, this refers to platforms allowing student athletes to manage their own social media presence. See Opendorse and INFLCR
  • For Your Fans – Your organizational social media strategy needs to remove barriers and encourage fans to post authentic user-generated content. Some examples for fans attending games include: Digital Seat Media which uses QR codes on the back of seats to encourage fans to post on social media, Brizi which providers venues with an aerial camera that fans can use to take in-venue selfies and FanCam where fans post in-venue photos of themselves directly to social media.

If I’m at a rightsholder or media company, I’m focusing on quickly turning live action into shareable clips as well as making my broadcasts more similar to Twitch streams. Therefore, I’m investing in smart automation tools and production plug-ins like the following:  

  • Smart Automation – Both Thuuz and WSC Sports have built platforms using artificial intelligence and machine learning to automatically analyze live game action and create highlights of the most exciting moments. 
  • Production Plug-ins – By production plug-ins, I’m referring to widgets and other gamification features that can be added to live broadcasts and drive interactivity. We mentioned several companies in the gamification edition such as LiveLike, Maestro, Sport Buff and Rebus which can add polls and trivia items directly to broadcasts, to drive fan engagement.

That was a lot of helpful information. Can you summarize quickly?

Absolutely. Here are the key takeaways:

  • Gen Z is the first digitally native generation, growing up with smartphones. 
  • Gen Z consumes their sports content differently than older generations, with more emphasis on highlights and short form videos. 
  • If you don’t lock in a fan at an early age, odds are you lose them and any potential spending across their lifetime forever. That’s the reasons sports properties need to target these fans early.
  • If I’m a sports property, I’m investing in social media creation tools to make it easier for my digital team to produce and distribute content. 
  • If I’m a rightsholder or media property, I’m investing in smart automation to create bite-size highlights using technology and production add-ons to better engage younger generations.

Until next time,

– Charles

The next newsletter topic will be Smorgasbord. What does that mean? Just wait and see!

Have some thoughts? Want to talk more? Let me know via email (charles@engagemintpartners.com). 

If you’re part of a sports organization in the process of thinking through digital strategies to engage your next generation of fans, shoot the EngageMint Partners team a note. We’d love to help out.

Finally, if you enjoyed this edition, tell your friends or colleagues about Chatting Sports Tech. Add me on LinkedIn and follow me on Twitter @ccampisi_EES. 

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Edition #7 – Five On Fan Engagement

Five Thoughts on Fan Engagement Tech – Part 1

Last edition went in deep on gamification, which sets us up perfectly to transition to today’s topic: fan engagement. 

One quick housekeeping item: For newsletter subscribers only, I’ll be writing a brief roundup on new investments in sports tech dropping weekly on Fridays. Subscribe at the top of this page if that’s up your alley. I WILL NOT be posting those round-ups to this Chatting Sports Tech website.

Back to fan engagement. The Enterprise Solutions team has spent significant time thinking about the future of fan engagement technology given EngageMint’s core offerings around customer experience. Over the past two months, we’ve spoken with over 40 companies with fan engagement platforms or products. The below are some of my thoughts from those conversations.

Let’s dive in…

1) Collectively We Need To Be Smarter About How We Talk About Engagement

Oftentimes, vanity metrics such as followers, likes, comments, views, etc. are used as placeholders for value when it comes to engagement. Since these metrics are widely available and easy to track, much of the sports industry defaults to this data. The problem is these measures don’t always tell the whole story.

Put differently, not all likes or not all followers are created equal. If you’re running a marketing campaign, would you rather have 10K shares on social and generate $10K of revenue or 1K shares on social and generate $100K of revenue? 

As a rule of thumb, the larger the reach the more valuable. However, when you factor in the effectiveness of reaching your target demographic and alignment with organizational goals (for example, direct sales > awareness), going viral should not always be the goal.

The good news? Digital tools have become more robust, given the emergence of artificial intelligence and machine learning. The fan engagement companies that provide the most value will continuously adapt how they measure engagement and not simply rely on those early generation internet metrics (likes, views, etc.). 

2) Is There a Fan Engagement Bubble? 

Lately when I haven’t been scouring Twitter for the latest sports news, I’ve been reading the book, A Random Walk Down Wall Street. One chapter goes in depth on the largest speculative asset bubbles in history, including the internet bubble. Leading up to this bubble, non-digital businesses were changing their names to include web-oriented designations like dot.com or dotnet to take advantage of higher valuation multiples. And the strategy worked for awhile….until the bubble burst.

Why do I bring the internet bubble up? Well, it seems like every company is slapping “fan engagement platform” to describe itself even if that terminology doesn’t adequately describe its products or services. A quick search through our growing Enterprise Solutions database of sports tech companies yields nearly 100 companies having a description including one of ‘fan engagement,’ ‘fan experience’ or ‘engagement platform.’ 

For example, we’ve looked into some companies that provide in-venue digital displays. How do they label themselves? Fan Engagement Platforms. Technically not untrue since fans engage with digital displays but if I’m in marketing at a college athletic department evaluating fan engagement strategies, I probably don’t have the authority to recommend a new in-stadium digital display.

So are we in a full-on fan engagement bubble? Probably not the appropriate terminology. But I would say the uptick in companies focused on “fan engagement” is real and sadly unsustainable. 

3) The Business Model For Fan Engagement Companies Is Overly Reliant on Sponsors 

Obviously there’s a cost for any sports property to plug in a new fan engagement technology. But when we talk with fan engagement companies, they argue a sponsor will easily cover the cost. That’s logical; however, it doesn’t make for an easy sales process.

What do I mean? Let’s say I was the decision maker in an athletic department and Start-up X pitched me a free-to-play game costing $20K that will not only double in-app engagement but also create $50K of sponsorable inventory. Even if I take the doubling of engagement as fact with a tangible benefit to my fans, I can’t take the $50K of sponsorship revenue for granted without having to jump through some hoops. 

To realize that revenue, I would have to revisit my current sponsor portfolio and gauge interest in the new asset. If no existing sponsor is willing to spend more for an unproven asset, I may then need to find a new sponsor and they don’t grow on trees. Given sponsor relationships would be managed by a different department or a third party rights-holder, there are now four parties required to reach a successful outcome (Gaming Start-up, Me in Marketing, Sponsorships Sales, Brand / Sponsor). The complexity to reach a deal compounds as the number of parties increases. 

If I agree in principle with the free-to-play game but can’t get a new sponsor and my sponsorship team on board, I’ve simply created a cost center with no clear path to ROI.

4) Fan Engagement Is Worthless Without Data Collection and Data Analysis

If you are not collecting information on your fans while engaging them, your organization is missing out. This includes an inability to understand if adjustments to features are required (i.e., something causing bounce rate) and inability to monetize active fans down the road. 

Now, most fan engagement companies I’ve spoken with understand the value of capturing data and providing back-end analytics to their clients. The problem though is knowing how to act on that data to drive operations. Too much data can result in paralysis.  

There’s also the privacy issue from data collection, clearly a regulatory priority between GDPR in Europe and the California Consumer Protection Law. However, recent research shows people are willing to provide non-essential personal information if it leads to more desirable personalized experiences. Thus, the ultimate winners creating fan engagement technology will leverage the data collected to provide the most personalization. 

5) Give Me A Company That Stands Out

Sure. Let’s talk about CUE Audio, which is not only fascinating from a technology perspective but also has a smart business model.

First the technology. CUE patented technology that collects data through sound and turns phone speakers into audio beacons. For in-person events, CUE will create an inaudible audio file to play over a team’s speaker. Phones recognize the trigger and give CUE access to play video or content through the phone. No wifi, cell service or bluetooth is required, important for older venues with poor connectivity. 

Additionally, when the pandemic kept fans from attending events live, CUE innovated, building a new sync feature which allows videos or content to be pushed to fans anywhere across the globe (though requiring a connection). 

You may be asking where does the fan engagement component fit in? Well, CUE’s most popular product is an experiential light show that has been activated at hundreds of sporting events across the pro and college ranks. It’s a cool, immersive experience where fans become part of the show by using their phones. Memorable and unique? Check and check. 

The company does much more than light shows but since I want to keep this short, check out the company website for more use cases. 

Besides their game changing technology, CUE separates itself from other fan engagement technologies on the business side for multiple reasons: 

  • Whereas I mentioned an industry over reliance on sponsors above, CUE often goes to market with a sponsor, having partnered with the major soft drink partners when pitching several teams. 
  • Standard contracts usually span the length of a season, not an annual period, showing a willingness to work around the client’s schedule. 
  • The technology can integrate directly into an existing mobile app and become a traffic driver (downloads of team apps for attendees spike before an event). Relying on a separate CUE audio app would create an unnecessary friction to adoption.
  • CUE continues adding features, providing upsell opportunities for them and new experiences for fans. During the pandemic, a couple universities used CUE’s trivia module to engage fans from home during the week. (Yes I know I bashed trivia as stale and undifferentiated in the gamification edition but with CUE you can upload corresponding videos, making it more of an interactive experience).

That’s all for now. Until next time,

– Charles

The next newsletter topic will be The Gen Z Problem

Do you disagree with these takes? Let me know via email (charles@engagemintpartners.com). And if you’re in the process of evaluating fan engagement technologies, shoot me a note. The EngageMint Partners team would love to hear your thought process.

If you enjoyed this edition, tell your friends or colleagues about Chatting Sports Tech. Add me on LinkedIn and follow me on Twitter @ccampisi_EES.

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Edition #6 – Gamification

Why Gamification Must Be Part Of Your Digital Strategy

After last edition shared thoughts on ticketing trends, let’s pivot to a more fun topic. Gamification. Who doesn’t love a good game? 

Gamification is nothing new. But whereas gaming used to be a way to pass the time, gamification must be a part of any sports organization’s digital strategy for engaging fans.

In this edition, I’m going to:

  • Define Gamification
  • Talk about how the world’s biggest companies embrace gamification
  • Discuss the importance to the sports industry
  • Touch on some of the sports tech companies in the space
  • Give some predictions for the future

Let’s dive in…

So what do you mean when you say Gamification?

The term gamification traces its roots to 2002 but didn’t hit the mainstream until 2011. This article describes the history and basics but here are the most salient points: 

  • Definition: Applying fun and addictive elements of games to real-world activities to encourage engagement
  • Gamification relies on principles of psychology to drive behavior. The article lists three main components: 1) Motivation, 2) Mastery and 3) Triggers
  • Motivation = Reason someone participates in the game; the best games use intrinsic goals
  • Mastery = Set of rules or skill needed to compete at the game; should be fair and skill-based; not determined solely by luck
  • Triggers = Actions that create a positive feedback mechanism
  • Some other popular gamification aspects include loyalty programs, leaderboards and status bars

Gamification is critical because it helps solve a key challenge every business faces – user retention. 

Before we proceed, gamification is not an entirely new concept. Sweepstakes, contests, leaderboards, loyalty programs, etc. have been around for decades. But it’s the explicit intentionality when designing digital features that has made gamification a recent hot topic. 

That’s some helpful context. Where can you find gamification in the world? 

Short answer: Everywhere. It’s difficult to find a successful consumer facing technology company not built with gamification principles. Some examples across various industries: 

  • Social Networks -> Facebook, Twitter, Tik Tok, Instagram all have feedback loops with likes / follow features 
  • Fitness Apps -> Peloton uses leaderboards and tracks progress throughout a workout
  • Financial Services -> Robinhood uses push notifications and rains confetti when you make a trade 

Here’s a great twitter thread from an Andreesen Horowitz partner exploring gamification examples 

But gamification does not need to only be used for customer engagement. The applications can be much broader. Here’s a case study how Amazon is expanding its gamification program for warehouse employees to improve performance on monotonous tasks.  

Interesting. Bring it back to the world of sports. 

Sports teams are no different from other consumer facing businesses. Fans are consumers and teams are in a constant battle to capture more fan attention. Your fans already tune in to watch your matches but how are they spending their time before and after? They might be reading recaps or checking injury updates already but what else can you do to drive engagement? Enter gamification. 

“Fan engagement platform” has become the trendy way to label a digital platform that includes some level of gamification. We mentioned in edition 2 how professional sports organizations have wisened up and are using team mobile apps as the new fan hub. Most of these mobile app platforms have built-in trivia, loyalty programs and / or other free-to-play games or at least integrations with a third party provider for those features. 

The benefits to a team are obvious. Some examples: 

  • Games drive certain fan behaviors. Many colleges establish rewards programs to get students to attend non-revenue generating sports (i.e., geofence the area for check-in). Students are intrinsically motivated to show they are the most loyal fan and reach the top of the leaderboard.
  • Games drive traffic to a mobile app or website resulting in greater sponsor exposure which can be leveraged for more revenue. A weekly trivia contest creates a sponsorable asset (“brought to you by XX”) plus gets fans in a rhythm of visiting your mobile app and puts more eyeballs on sponsor activations.
  • Games improve fan profiles. If certain fans always enter contests to win an autographed team jersey or unique gameday experience, they can be retargeted with a new merchandise drop or ticket sale link with a higher probability of conversion. 

Final point and it’s a big one: Gambling. Everyone and their mothers are bullish about the impact of legalized gambling to grow the entire sports industry since every research study conducted shows having money on a certain outcome results in higher levels of engagement. We could spend all day on this topic so let’s just focus on one angle: Gambling Properties are in a land grab to acquire customers and in the process, sponsoring sports teams everywhere. 

The playbook usually looks like this. A gambling company enters into a partnership with a team. As part of the deal, especially in states that haven’t legalized mobile gambling, the team introduces a free-to-play game sponsored by the gambling company. Often these are prediction games which involve a series of ‘bets’ without money tied to them. The gambling company gains access to customer information, which can be used to find higher prospect future customers (i.e., fans who are bad at making predictions). Recently, the Warriors, Cavs, LA Kings, Clippers and Bulls all announced partnerships with Betway that appear to be following this playbook. 

I’m not going to comment on the ethical implications of encouraging gambling. Plus what gambling apps know about you is scary. But if you assume gambling being adopted across the entire US is inevitable, teams might as well use this opportunity to create new assets and revenue streams. 

Who are some of the interesting companies in this space?

Most sports organizations don’t have the capabilities or employee expertise to internally create a mobile app with gamification features or design the technology for free-to-play games. Thus A LOT of companies have emerged looking to capitalize. Here’s just a handful of the companies we’ve looked into for Enterprise Solutions:

Companies building games for properties as their core offering:

  • FanBeat – Mobile sports application helps increase fan engagement through gamified live-action and curated content
  • FanneX – Mobile application designed to provide interactive entertainment for sports and entertainment event production
  • Tally – Free-to-play sports prediction platform dedicated to powering immersive, real-time predictive experiences
  • Partake – Mobile fan-engagement platform enhances the experience and connects the fan to the venue
  • Boom Sports – Builds mobile gaming products in conjunction with sports properties
  • GTG Network – Powers arcade-style games for organizations

Companies offering gamification features as part of broader services and products:

  • PICO – SaaS fan management platform to help sports teams, live events and brands build relationships with fans
  • Jebbit – Marketing platform designed to collect & activate relevant consumer data through innovative mobile experiences
  • Cue Audio – Utilize proprietary audio technology for real-time mobile trivia game; also building out 50/50 raffle capabilities
  • SportBuff – Developer of a live-streaming solution platform designed to create a live social game around the video content
  • LiveLike – Audience engagement platform allows broadcasters to transform streaming into fan-driven interactive experiences
  • Rebus – Platform designed to help events achieve profitability by giving event attendees an easy way to tailor their experience; donations, auctions, sweepstakes, raffles, trivias, gamification, etc.

Mobile app providers with gamification features:

  • FromNowOn – One-stop-shop mobile fan experience helping colleges, teams, leagues and venues transform the fan experience on gameday; includes loyalty program and trivia platform
  • InCrowd – Mobile fan engagement & sports marketing platform intended to enhance the fan experience; gamification digital experience tools
  • Fanisko – Fan engagement platform connecting sports teams with their fans and help them engage in mixed reality experiences; AR gaming includes Treasure Hunt type game a la Pokemon GO
  • Venuetize – Mobile engagement platform intended to improve and innovate the guest experience; In-app gamification
  • FanMaker – Athletic team loyalty programs intended to track and reward ticket purchases and other fan engagements; gamification through trivia and polls
  • Bleachr – Fan engagement features to test fans’ knowledge with Trivia and create buzz with challenges

Give me your predictions. What does the future hold?

I’m going to use a winner / loser format to address how the future will play out for the major stakeholders.

Winner: Fans 

We didn’t touch on it above but games are fun! Check out the Cavs partnership with GTG for some arcade style games. I could waste some serious time with that Hoops Daddy game.

With gamification features an essential part of the team app, content lives in a single place and fans have more entertainment options without leaving the team ecosystem. When you factor in many of these gamification features have prizes without any cost to enter, fans are winners. 

Additionally, fan expectations for gamified content will only rise. Competition exists from all forms of entertainment which means in order to compete with video games and social media, the gaming experience has to be interesting to keep fans coming back. 

Loser: Gamification Companies

Did you see how many companies I listed above? And that’s only a fraction of them. 

Products like trivia, free-to-play predictions, rewards platforms, etc. are all commodity-like. There’s no proprietary technology behind the design. Plus most of these companies are beholden to the platforms where users are gathering since these games rely on the team’s underlying audience. This isn’t analogous to creating a stand-alone mobile game because for every hit like candy crush, there’s hundreds of failures that never got off the ground.

So what’s going to happen? 

Those commodity-like gamification features (trivia, rewards) are becoming table stakes for mobile app providers instead of a revenue generating additive feature. Thus, these providers will need to build out their own capabilities or acquire stand-alone gaming companies to even get a seat at the table. 

Meanwhile, stand-alone gaming companies who don’t provide differentiated products or don’t handle actual administration of contests will need to create new innovative products to stand out. The problem though is that even if you create a new unique game, it’s really easy for another company to replicate the features meaning it’s impossible to sustain a competitive advantage. Gamification can help solve for user retention, but building a successful game in the first place is not easy and is why we often see the same tried and true formula (trivia, predictions, arcade style games, etc). 

It’s too early to speculate who the specific winners and losers will be from the companies listed above but anytime products are commoditized, distribution ends up being a significant factor. I’d expect some attrition in the category (i.e., shuttered companies), some consolidation and partnerships and even some new entrants (more AR/VR games) over the next several years. 

Winner: Sports Properties

On the opposite side of the coin, sports properties are big winners. Why? Since there is a large supply of game providers, teams have negotiating leverage. They already have a captive audience of fans and existing brand equity that gamification companies want to leverage. Plus, while hiring a company to build a game costs money, this cost can be off-set through sponsorships of new digital assets created. If properly executed, gamification can be a profit center, not a cost center.

Winner: Brands / Sponsors

Above I mentioned free-to-play games creating a customer lead generation funnel for gambling properties. That’s an easy example of a high sponsor ROI on an activation. But the potential extends beyond gambling properties. New assets created through gamification allow sponsors to activate in a way that’s aligned with their mission or brand, providing much higher return versus old models (i.e., paying for in-stadium signage).   

Loser: Fans  

Wait? Aren’t fans winners? Why are they also losers?

It’s complicated. By labeling fans as both, I wanted to highlight the double-edged sword fans face. When it comes to gamification, you are the product, not unlike how advertisers flock to Facebook to target users. If fans recognize that and resist the upsell attempts for paid products, you can simply enjoy some gameplay. 

However, companies have improved their targeted advertising and resisting is not easy. Posting this again since it’s eye-opening but check out how much a gambling app knows about you. People who are consistent losers of prediction games will find it difficult to escape the barrage of offers from a sportsbook.  

That was a lot. Can you summarize real quick? 

Absolutely. Here’s the key takeaways: 

  • Gamification means applying fun and addictive elements of games to real-world activities to encourage engagement
  • Gamification is everywhere (social media, financial services, fitness). The sports industry is no different with gamification being a core pillar of fan engagement platforms. 
  • There is no shortage of sports tech companies with gamification solutions or relying on gamification features.
  • In my opinion, sponsors and sports properties will be the winners from the increased emphasis on gamification due to commoditized offerings while the tech companies themselves will be forced to consistently innovate and defend market share. 

That’s all for now. Next week’s edition will be a mini one with Five Thoughts on Fan Engagement Tech.

Until next time,

– Charles

Do you disagree on what the future of gamification will look like? Let me know via email (charles@engagemintpartners.com).

If you enjoyed this edition, tell your friends or colleagues about Chatting Sports Tech. Add me on LinkedIn and follow me on Twitter @ccampisi_EES

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Edition #5 – Ten Ticketing Takes

Sharing Some Thoughts on the State of Sports Ticketing

Whereas the last edition explored a future where virtual ticketing gives fans courtside access without leaving the couch, this edition will bring us back to the current ticketing landscape. Given how complex ticketing is, I’m going to deviate slightly from the normal format and list my ten thoughts up front. I’ll then briefly explain each below, with emphasis on some interesting sports tech companies. 

  1. The greatest short-term hurdle for the industry is low consumer confidence…
  2. …Which means the balance of power will shift to the fans
  3. The ticketing industry is experiencing its own unbundling
  4. Organizations must think about ticketing holistically and use technology to maximize profit, not just ticket sales
  5. The pandemic accelerated mobile ticketing’s inevitability 
  6. And exposed the need for better credit solutions
  7. Ticket buying is finally becoming more social to the benefit of all
  8. Membership pass programs are here to stay
  9. Blockchain might create a new buyer pool…
  10. …But it will definitely shake-up the current secondary market

Let’s dive in…

The greatest short-term hurdle for the industry is low consumer confidence…

Until health restrictions are fully lifted which can’t be expected until 2022 at the earliest, a large portion of the population will be uncomfortable attending live sporting events. This obviously shrinks the ticketing buyer pool dramatically. Some of the statistics I’ve seen from released surveys: 

Thus, even if a stadium allows for 100% capacity, the data suggests fans won’t necessarily come back and tickets won’t sell out. Burden will fall on teams’ communications staff to continuously convey the message that health and safety protocols are in place and being adhered to as fans begin trickling back.  

…Which means the balance of power has temporarily shifted back to the fans

ESPN had a good article titled ‘Fans win post-covid ticketing which listed five ways fans will benefit: 1) Lower prices and more freebies, 2) Greater flexibility on refunds and exchanges, 3) Farewell to cash and paper tickets, 4) Bye-bye to bots and 5) No expected fee hikes on major reseller market. How properties react with ticket prices coming out of the pandemic will be fascinating to watch. 

Prices will have to be lowered, especially as there’s less demand in the market (putting my MBA microeconomics class to use). But by simply lowering prices, teams establish a lower starting point for future year increases. 

Let’s use simple math to illustrate. A ticket was $50 before the pandemic. The team drops it by 20% for 2021 to lure fans back. Psychologically, fans internalize the new $40 ticket as the norm.  But to then raise prices back to $50 in 2022 would mean a 25% price hike. Some customers become outraged by the size of that increase. The sports team’s PR department has to put out a fire. 

This is the same rationale why NYC landlords use free month rent concessions to entice lessees rather than drop the average monthly rent. The economics to the renter are the same (or better if you factor in time value of money) but the landlord can re-establish old prices once life returns to normal.

The customer will win but teams would prefer freebies over price drops (one solution? membership programs discussed below). Will it be enough to get fans back in the stands? I’d guess not. Teams will ultimately have to bite the bullet and lower prices.

The ticketing industry is experiencing its own unbundling

Unbundling in my words – When a one stop shop for multiple services each with separate pain points is disaggregated by companies laser focused on a specific service. One of the most common examples is the unbundling of the commercial bank from the FinTech world. Whereas the community bank used to provide its customers with every type of financial service, startups have emerged that are focused on a single aspect (e.g., home lending, wealth management, payment remittances, education finance, etc.) and do that one service much more efficiently or at a lower price.

The ticketing industry is facing a similar unbundling, albeit on a smaller scale. There used to be the primary platforms (e.g., Ticketmaster, Paciolan, etc.) and secondary platforms (e.g., StubHub). But over the past decade, multiple smaller companies have emerged in the ecosystem targeting specific pain points and providing tools in areas such as group sales, membership passes, VIP experiences, seat upgrades, marketing, etc. These areas weren’t core competencies of the primary platforms, leaving the door open for smaller and more nimble companies. I’ll touch on some of these new companies below.

Organizations must think about ticketing holistically and use technology to maximize profit, not just ticket sales

With any ticket strategy, the goal should be to maximize the bottom line and not necessarily ticket revenue. Would your organization rather sell a ticket for $100 or $80? Obviously $100. But what if the person who’d buy that $100 ticket never spends at the ballpark while the $80 buyer always buys a t-shirt, program and meal for $50 generating 60% margins. Or if the $100 ticket would sell through a site taking 30% commissions while the $80 ticket would sell through a site taking 10% commissions. In both scenarios, the $80 ticket drives more to the bottom line. 

The above is a hypothetical but hopefully you see that sticker price isn’t always the telling metric. Thinking about ticketing holistically involves a deep understanding of who your customers are, what they do when at the stadium, what your ticket broker ecosystem looks like and what your channel mix is selling across primary and secondary platforms. 

Ticketing is driven by supply and demand principles. Organizational goals will differ drastically across sports. Ohio State football will almost certainly sell-out home games so the school’s goal becomes revenue maximization. That’s a big reason why the school announced a new tier model for season ticket holders going forward, a clever way to frame price increases. On the flip side though, the Yankees are more worried about getting people into the stadium on a random Tuesday against the Orioles, meaning their goal is to maximize distribution across the multiple platforms and keep seats from going empty. 

Regardless of goal, technology has to be a pillar of any organization’s strategy to optimize profit. That could involve using dynamic pricing software in-house from a company like QCue to manage supply and demand or hiring a third party specialist to handle distribution using their own proprietary technology (Dynamic Pricing Partners, Eventellect, Event Dynamic).

The pandemic accelerated mobile ticketing’s inevitability 

Mobile ticketing was always the future. Rapid smartphone adoption was enabling teams and venues to go paperless. Plus with teams wanting to control the fan journey and collect more data to provide personalized experiences, mobile ticketing had to be the backbone. But some teams were hesitant to force mobile ticketing on fans because they didn’t want to upset the portion of their base that wasn’t tech savvy. 

Well COVID-19 reshuffled priorities and accelerated the pace of paperless (and cashless) adoption as teams wanted to avoid exchanging physical tickets and risk spreading germs. With nearly every professional team already having mobile ticketing integrated as a feature of their gameday app and most colleges utilizing some type of mobile pass-through, it’s only a matter of time before mobile ticketing is the norm for every fan (Yes, I believe the need for some paperless ticket is overblown if mobile ticketing becomes the exclusive option).  

And exposed the need for better credit solutions

The pandemic was a black swan event when it came to event cancellations. Besides the one off weather catastrophe or sick artist, events were almost never canceled so ticketing providers never built infrastructure to handle mass refunds. All of a sudden, fans were sitting on hundreds of dollars of credit but without a clear ability to direct those funds, particularly if a fan was hesitant to attend an upcoming game during the pandemic.

Season Share, the company behind the Orlando Magic credit program from the ESPN article, has created a flexible spending product that makes it easy for fans to track unused credit and apply to other purchases and experiences (seat upgrades, merchandise, etc.). Hopefully – and this may be wishful thinking – but products will change the age old industry mindset that all sales are final. 

Think about the potential. Let’s say 48 hours before a game, a family can no longer attend due to an emergency. Historically, either the tickets are relisted on the secondary market or the tickets go unused. Scenario 1 is bad because the fan likely takes a loss after fees and the team doesn’t collect info on the new attendee. Scenario 2 is also bad because the family gets no money while the seat goes unfilled and the team earns no concession revenue. 

With tools that easily allow for cancellation and credit receipt, the original buying family is happy (money can be applied later) and the team is happy because they can re-release the ticket inventory. Assuming deadlines would be added a la the hotel industry where people can cancel up until XX number of hours prior to stay without a charge, teams would be protected from the downside of a flood of last minute cancellations.

Ticket buying is finally becoming more social to the benefit of all 

Edition 2 touched on the power of community and how the next wave of giant companies need a social element (social+). Ticket buying is no exception. In the past, it was a solitary activity. If I planned to attend a Yankee game with three friends, I’d buy a block of four tickets, then collect payment from each of those friends on venmo, and up until recently when mobile wallet transfers became easier, I had sole custody of all the tickets. The team would have no visibility into my three friends while the buyer faced the annoyance of collecting payment.

The good news? Companies recognize these pain points and are solving them. FEVO has built social commerce features that sits on top of the normal checkout process. Consumers can buy as individuals and easily share socially to drive higher conversion rates on group buying. 

Then there’s also the group sales component. One ticketing company founder estimated that up to 90% of a ticket sales rep’s time can be spent coordinating group sales (think a local little league purchasing tickets), which make up only 10% of total team sales. Spinzo wants to make the lives of these ticket sales reps easier, by providing white label templates to easily customize and manage group sales pages for different organizations. 

Membership pass programs are here to stay

If you want to dive in on membership programs, check out EngageMint’s interview of Chris Giles, former ticketing exec with the Oakland A’s who implemented a membership model and then left the A’s to start FanRally. Chris does a great job talking through the economics and the business model so I won’t go into many details.

Besides FanRally, more companies are building various pass programs with FanMaker, Fevo and Season Share all joining the fold. Though detractors think this model introduces cannibalization (i.e., members who would have bought higher priced single game tickets are now getting a discount), I’m bullish because of a) more data collection allows for more experience personalization (think country club model), b) drives more attendance for off games and c) new stadium inventory (i.e., sell standing room then get people to upgrade seats or buy concessions and merchandise).

Blockchain might create a new buyer pool…

Ted Leonsis, owner of the Washington Capitals, Wizards and Mystic and part of the NBA owners committee investigating blockchain, recently shared his thoughts with Sportico. A big headline? Packaging tickets with a digital asset enabled through the blockchain will create a new buyer pool interested in the digital asset but not interested in ever attending the game. 

That may ultimately be the case, but I’m bearish besides the rarest of occasions. The article mentions how attaching a promotional item is similar to traditional bobblehead nights. Sure there are people who collect bobbleheads, but most promotional items aren’t valuable collectables. And yes, you need to actually attend the game and usually show up early to procure a bobblehead which wouldn’t be the case. Would I buy a ticket to get a digital asset and in the process assume the risk to re-sell the ticket? Not as long as there are transaction costs, both monetary (fees) and non-monetary (time). Plus, think how flooded supply in the market would become if every team is attaching a digital asset to every ticket. 

The ONE scenario where I do think this model could thrive is for that 1% of truly special games. Examples? Derek Jeter’s last game at Yankee Stadium or the Staples Center honoring Kobe Bryant after his death. People have emotional attachment to these players’ careers and are willing to spend money to feel a part of the experience, even if they can’t attend. These digital assets might not have serious investment value (too much supply) but people would place sentimental value on the memorabilia. Plus, demand for these tickets already exists if the original buyer wants to re-sell the ticket and keep the digital asset. But then again, maybe the better strategy is for the team to release commemorative digital assets completely separate from tickets. 

…But it will definitely shake-up the current secondary market

Where I am very bullish is blockchain’s potential to overhaul the secondary ticket market. Dallas Mavs owner Mark Cuban shared some thoughts here. Currently teams don’t benefit when a fan resells a ticket through a secondary platform (e.g., Stubhub). The team doesn’t know who the new fan is nor do they collect any of the transaction costs while the Stubhubs of the world collect a fee on both sides. Using blockchain technology, which records every transaction on its immutable ledger, allows a team to understand the entire transaction history and share in any sales revenue. If I’m Mark Cuban or any team owner, I’d be racing to figure out a blockchain solution that grows my top line while shifting power away from existing secondary platforms. From personal experience, I immediately venture to Stubhub when searching for a ticket.

I haven’t spent as much time analyzing emerging blockchain ticketing companies in depth and can’t speculate on who ultimately becomes a winner in the space but there are a couple to keep your eye on. There’s BandwagonFanClub, which has a proprietary blockchain database software monitoring each ticket transaction. And then there’s Aventus Systems, which has a Blockchain based B2B open source ticketing software from Europe for ticket sales and resales. It’s also very possible a company like Dapper Labs, the facilitator of NBA Top Shot, starts building in the ticketing vertical. 

Let’s wrap there as that was a lot of ticketing specific information. Thank you for taking the time to read all the way through. If you enjoyed, please share with someone else who loves sports business or is interested in sports tech. 

Until next time,

– Charles

The next edition will touch on one of the sports world’s favorite buzzwords, gamification

If you haven’t already, add me on LinkedIn and follow me on Twitter @ccampisi_EES. Feel free to share some feedback on the newsletter or just pass along interesting findings in the sports tech space via email (charles@engagemintpartners.com).

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Edition #4 – Future of Ticketing

The Future of Ticketing : How Different Will Things Look?

The pandemic disrupted a historical cash cow. Pausing live events followed by attendance limits resulted in pretty much a lost year for the ticketing industry. But will we look back in a decade and say COVID-19 started the process toward the reimagination of ticketing?

My first draft ran way too long so I’ve ultimately split the topic into a two-parter. This edition will focus on the greatest long-term headwind the ticketing industry is facing and how virtual ticketing technology has the potential to be a savior. The second part will focus more on the current pain points in the ticketing industry and touch on the companies addressing them. 

Let’s dive in….

Before going any further, what’s the latest with the ticketing industry?

Ticketing is directly tied to live events. If there are no live events, there are no in-person tickets sold. Duh. For a quick proxy on the pandemic’s impact, Ticketmaster plummeted from nearly 500 million tickets sold in 2019 to 120 million in 2020. Take out the 90 million tickets sold in Q1 2020 and that’s 30 million additional tickets across the final nine months of 2020.*

A quick google search of ‘how have ticketing companies been doing during the pandemic’ yields the following headlines:

Ouch. Now I normally don’t advocate using article headlines without reading further (clickbait culture is real) but I think these articles drive home the point. The year has been nothing short of disastrous.

One note before proceeding: When I’m talking ticketing in this edition, it’s meant to be synonymous with live event attendance. In the second part, I’ll separate the two and discuss topics that are more specific to the nuts and bolts of ticketing.

That is some useful context. But you said this edition was going to focus on long-term ticketing. Is there more here than just the pandemic?

Previous editions mentioned some discouraging sports trends such as declining interest from younger generations and the prevalence of the second screen. But in my opinion, the greatest threat to attendance comes from the at-home viewing experience.  

Over the past couple of decades, the at-home experience has improved exponentially. It has a whole list of advantages compared to heading to the stadium:

  • Improved broadcast production quality – At home you get replays of key plays. You can rewind if you missed anything. Multiple camera angles. The Redzone Channel. Meanwhile, if you’re using the restroom at the ballpark or checking your phone during an inopportune time, you may miss a game’s biggest play.
  • Convenience – It’s much easier to get off the couch and grab a beer from the fridge than walk from your seat and wait in a concession line. Plus no traffic driving to a game. No parking troubles. No connectivity issues from the network being stretched too thin at the stadium.
  • Cost – The average cost for an NFL ticket is now over $100. When you factor in parking costs, concessions and merchandise, you can buy a decent flat screen TV for what it costs to take a family of four to an NFL game.
  • Increased competition – When you boil sports attendance down to its core, it’s a form of entertainment. Which means, competition comes from anything that could fill your leisure time. If I’m watching a game and it’s no longer competitive, I can easily turn on a new Netflix show or fire up a video game. Until the human race solves teleportation, it won’t be that easy to leave the stadium. 

Meanwhile, the in-venue experience hasn’t changed much, if at all. Especially if your favorite team hasn’t upgraded its facilities in several decades (some MLB stadiums for example). Sure a team may introduce a new fan feature that gains popularity (Love this) but with the exception of new gameday technologies (mobile ticketing, mobile ordering, social feeds) aimed at removing frictions, when I watch a game at Yankee Stadium today, there’s not much difference from when I watched there as a child**. 

Now there will always be an appetite to attend games, particularly from die hard fans. I’m not arguing that the at-home experience will ever become so amazing that stadiums are ultimately left empty. But teams rely heavily on people who only attend a handful of games a year to fill seats. If these casual fans no longer see the appeal of heading to the stadium or don’t want to pony up the high price tag, the entire ticketing industry takes a massive hit.

I get it. Sports properties selling tickets face a serious threat from the couch. What’s the fix out there?

In the previous section, in-person attendance was pitted versus at-home viewing as two possible extremes. But what if there was a middle ground? A way to feel like you are sitting in the stands, cheering with your team but also never leave the couch? 

That’s what Tru-Spot Technologies is betting on. Their virtual fan experience technology has the potential to completely revolutionize ticketing. Using 360-degree cameras, 3D renderings, and bi-directional audio, they can replicate the experience of being in a seat at the game, by providing the same sightlines and crowd audio. A fan receives the benefits of being in person and feeling the electricity only available at a stadium, without having to deal with the hassles like parking, purchasing concessions, etc.

Plus, their technology is not reliant on a virtual reality (VR) headset. I’m bullish on the long-term prospects of VR to deliver immersive experiences especially since the price of the hardware has become significantly more affordable ($200-300 vs >$1,000 three years ago). But I wouldn’t want to wear a clunky headset for a full three hour game just to experience the action. 

With virtual seating, the revenue upside is massive for the sports properties that control distribution. All of a sudden, you’ve created unlimited new digital inventory that can be marketed and sold. 

Let’s use college basketball’s biggest rivalry to illustrate: Duke is playing its bitter rival UNC for the ACC basketball regular season championship. Guaranteed sell out. But as the ticket sales department, I’m constrained by the 10K capacity of Cameron Indoor. Enter Tru-Spot. Now I can sell section 1 row 1 seat 1 to another 10K fans. I’d doubt Duke could charge the full value of a ticket but say a virtual seat costs $20, much less than a normal ticket. That’s $200K created out of thin air. Now add amounts for other available virtual seats in the venue and multiply by all other home games for the year – that’s an easy eight figures of revenue potential if managed properly!

Courtside seats in particular are a great opportunity. Once through my previous employer, I was lucky enough to have third row Knicks tickets at MSG. I was blown away by how jam-packed the court felt due to all the massive humans and how difficult it was for players to find even small open windows to get off a shot. Television broadcasts do not do justice capturing this. Would I pay to experience that same sensation for several games a year if I was already planning to be home? Absolutely. With Tru-Spot, your average Joe could feel like Spike Lee or Jack Nicholson and not need a work connection or have to shell out the price of an arm and a leg. 

All that praise aside, Tru-Spot has plenty of hurdles to clear before virtual seating becomes widely adopted. Obviously the company is in an early stage. The technology needs to be perfected and scaled. Once the technology is locked in, the customer experience will need to be fine-tuned to feel authentic and give people a reason to keep coming back. Plus as the SportTechie article mentions, stadiums need to have enough connectivity to process the massive amounts of data (banking on 5G). For many of the older stadiums, that’s a serious undertaking. 

I’ll be closely following Tru-Spot’s journey and set myself a reminder to check back in a decade. But I’d bet on the power of technology like Tru-Spot to disrupt the at-home experience. The fan deserves a third option between the current at-home experience and in-venue experience.  

Until next time,

– Charles

As mentioned above, next edition will focus on the current state of ticketing and companies that have emerged to address the pain points. Expect more exciting ticketing nitty-gritty. 

Footnotes:

*Stats from the Live Nation 2020 10K and Q1 10Q.  Live Nation is the parent of Ticketmaster, the dominant primary ticketing platform in the US.

**except for the new ballpark being across the street albeit with the same dimensions, look and feel

Add me on LinkedIn and follow me on Twitter @ccampisi_EES. Feel free to share some feedback on the newsletter or just pass along interesting findings in the sports tech space via email (charles@engagemintpartners.com).

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Future of Sports
Chatting Sports Tech

Edition #3 – Fan Controlled Football

Why Your Organization Should Pay Attention to the Fan Controlled Football League

Have you ever become infuriated watching your favorite football team’s play calling suck? Or screamed at the TV when your coach opted for a cowardly punt on fourth down? Well then, can I interest you in an analysis of the recently launched Fan Controlled Football?  

Wait, what the heck is Fan Controlled Football?

Fan Controlled Football or FCF is the latest re-imagination of professional football. Unique aspects of league gameplay include:

  • Streamed on Twitch
  • Seven player versus seven players
  • Short 50 yard field
  • No kicking or special teams
  • One hour games

However, the real innovation surrounds the fan experience: 

  • Fans vote on all the plays during the games on Saturdays
  • Fans also vote in live player drafts on Wednesdays to fill out the roster of players
  • Essentially, there’s a loyalty program, Fan IQ. The more a fan interacts with the league, the more powerful his or her vote becomes
  • Drone cams, helmet cams and VR provide alternate views
  • Players and coaches take part in live weekly shows to give fans another chance to engage with the league

Currently there are four teams in the FCF: Glacier Boyz, Zappers, Beasts and Wild Aces. 

Each team is led by a group of high profile owners:

  • Glacier Boyz are led by rapper Quavo and professional cornerback Richard Sherman
  • Zappers are led by social media star Bob Menery and NY Met Trevor May
  • Beasts are led by former all-pro RB Marshawn Lynch and WNBA player Renee Montgomery
  • Wild Aces are led by online personality Greg Miller and LA Charger RB Austin Ekeler

Creating the league was an endeavor several years in the making. The founders have been very thoughtful about organization and how to give control to the fans. Check out this podcast to listen to the plan straight from one of the founder’s mouths. 

What’s preventing the FCF from going the way of the AAF or the XFL?

In my mind, there was a large strategic difference in how these leagues were constructed. Each of the following paragraphs could be a standalone 10 thousand word blog but since no one wants that, let’s run through the argument why I think the FCF has serious staying power. 

Some context: the Alliance of American Football (AAF) didn’t even make it through its inaugural season before folding in 2019 while the latest iteration of the XFL ended prematurely due to COVID in early 2020 before filing for bankruptcy in April. 

When analyzing the now defunct leagues, the main thesis behind starting them was the public’s appetite for professional football could sustain additional leagues to the NFL. These leagues introduced some slight tweaks to NFL gameplay (e.g., different special teams formats) but for all intents and purposes it was the same old 11 versus 11 football. What these leagues failed to consider though was the significant step down in talent on the field versus the NFL. The AAF tried to address this by hiring high profile coaches, but who has ever turned on an NFL game for their favorite coach?

All the while, these two leagues relied on a similar business model as the NFL. Professional sports leagues like the NFL rely on four primary buckets of revenue: Media rights, Gameday revenue, Sponsorship and Merchandising. The NFL is currently the richest professional sports league with all 32 teams profitable because of the growth in its massive media contracts (current deals expire within the next two year and negotiations are ongoing with 100%+ increases being floated in the news). 

The XFL and AAF mimicked the NFL’s media strategy, choosing linear television for primary distribution. But when the expected eyeballs never materialized, the leagues’ media partners unsurprisingly decided to back out, collapsing an essential revenue pillar that led to the leagues’ demise. 

Turning the attention to the FCF and considering lessons from the previous leagues’ failures, there are three main reasons I don’t think FCF will have the same fate:

  1. The League Doesn’t Want to be the NFL – Unlike the AAF and XFL, the FCF drastically changed the gameplay, opting for 7 on 7 rather than the traditional 11 on 11. While Bleacher Report had an article all the way back in 2013 detailing the rise of this new format, it has never made its way into the public conscience. Yet the fast paced emphasis on passing offenses appeals to a scoring obsessed fan base (hello fantasy football lovers).
  2. The League Is Not Beholden To Its Media Partners – By choosing streaming on Twitch over traditional media, FCF doesn’t have the same issue of over reliance on media partners like the AAF and XFL had. Networks have a finite number of time slots and incentive to run the best performing programming to sell to advertisers but Twitch is a completely different animal built on a different business model. No one has to buy the rights to the FCF for the league to operate. Plus, the FCF is meeting the consumer on a platform that they are already familiar with. Check out this article for some statistics on Twitch’s meteoric rise as a platform. 
  3. The League Recognizes the Value of StoryTelling and Personality – Whereas the NFL’s goal is to put the optimal product on the field by grabbing the most talented individuals, the FCF understands individual stories are often much more compelling. Players in the FCF’s initial pool were often selected for having the most interesting backgrounds and not necessarily the most talent (though they aren’t necessarily slouches). In addition, the owners of the teams are established personalities and bring their own fan bases, often from outside the typical sports fan realm.

The FCF is now two weeks into its inaugural season. How has performance been to date?

I can’t find numbers from the second weekend yet (games are streamed on Saturdays) but opening weekend metrics were strong. Highlights include: Most downloaded free sports app for a three day period, over 700K live views on twitch, greater than 250K plays called by fans, more than 70% of fans called more than 5 plays. From an engagement perspective, all of those are positive.

The league has been fairly successful to date gathering sponsors before a single game was played. Wendy’s is the big brand name as the official field-level partner, but with WHOOP, Vroom, Kinexon, Black Box VR and Schell Games also on board, the league also attracted several sponsors who share an interest at the intersection of sports, technology and gaming. 

I do want to raise a cautionary tale though. The opening game of the XFL’s 2001 original launch was considered a success with a 9.5 nielsen rating as plenty of people tuned into the broadcast of the love child of wrestling and football. But interest dwindled drastically throughout the season when fans realized play quality was low and so-called innovation were mostly gimmicks. The league’s championship drew a pathetic 2.1 rating, helping lend to the easy decision to fold the league.

Anything else interesting from a business perspective?

Yes. The league offered a small percentage of each team’s equity to the public, offering another avenue to give fans skin in the game. It’s a creative strategy that helps solve for how to create team loyalty when 1) there’s no geographical location tying you to an organization (i.e., I’m a Yankee fan being born and raised in New York) and 2) the majority of players are unknowns.

In total, what the FCF is building goes directly along with the last edition of this newsletter about the power of building a community. Every decision leading up to the league’s inception revolved around the goal to drive engagement and make the fans part of the experience. The FCF doesn’t want an audience; it wants a community. 

What lessons can I apply to my organization?

Let’s summarize takeaways into three lessons that can be applied to every organization:

  1. Know Your Audience – I truly believe the AAF and XFL failed because of an inability to properly evaluate potential customers. As the tech world would say, no product market fit. Reminds me of the epic failure of Quibi and mis-reading the market. Meanwhile, the FCF is targeting a different customer with a unique value proposition and meeting them on a platform they’re already familiar with.
  2. Adapt Your Business Model To The Times – A big trend I haven’t touched on in depth is the growing power of influencers. The FCF is clearly taking advantage of having popular influencers as team owners while the AAF and XFL failed to capitalize on the same trends. A similar example is the current status of boxing. While traditional boxing has been experiencing a steady decline in interest for the past several decades, celebrity boxing leagues are sprouting up and capturing much higher viewership levels. For example, the dual exhibition matchups of Logan Paul versus Nate Robinson and Mike Tyson versus Roy Jones Jr generated over a million pay-per-view buys, the highest boxing pay-per-view buys in a long time.
  3. Build a Community to Keep Customers Coming Back – Hopefully I don’t have to explain this one again….

That’s all for now. Next week’s full edition will explore the Future of Ticketing.

Until next time,

– Charles

Add me on LinkedIn and follow me on Twitter @ccampisi_EES. Feel free to share some feedback on the newsletter or just pass along interesting findings in the sports tech space via email (charles@engagemintpartners.com).

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Future of Sports
Chatting Sports Tech

Edition #2 – Power of Community

Welcome back to your regularly scheduled Chatting SportsTech with Charles programming. This edition will go deep on The Power of Community in Sports. Unlike Edition 1.5 – I’ll avoid confusion and use integers only going forward – this format will more closely follow Edition 1. I’m going to start at the macro level to understand why an increased emphasis is being placed on building digital communities, talk about applications in the sports world including how to use communities to drive revenue growth and end with a deeper discussion of some emerging sports tech companies. 

Jump to the last section if you’re only interested in reading about the sports tech companies.

Let’s dive in…

Why talk about community building now? Hasn’t the human race been forming communities since the dawn of time?

You aren’t wrong about that last point. What has changed though is the vast library of available tools and technology allowing community formation previously constrained by physical geography. 

What really drove me down this rabbit hole was this Andreesen Horowitz article. For those of you unaware, Andreesen Horowitz is one of Silicon Valley’s most prestigious VC funds with ambitions to become a major force in media.*  The author uses the terminology ‘Social+’ to describe companies that build a social experience around a single category, like music or gaming. This graphic gives examples of the categories moving to social:

While I disagree with Peloton’s classification (there is a strong social component) and recognize the author has an agenda to promote Andreesen Horowitz portfolio companies, I agree with the inherent benefits to a social+ company. A social+ company ensures faster feedback loops and helps drive customer retention, creating a defensible moat.

Before proceeding, it’s important to highlight the large difference between an audience and a community. You have an audience if you’re lecturing from your soapbox or  pushing notifications to a group of followers. That’s why Andreesen considers ESPN a ‘non-social’ company. You have a community when there’s consistent interaction not just between you and your followers, but between members of that follower group. Humans are social beings; we crave the interaction that keeps us coming back.

That makes a lot of sense. Tell me more how this all fits in with the world of sports. 

In my opinion, the sense of community with sports is the number one reason why people invest so much of their time and effort following a team, players and / or a league. It’s why grown adults wear the jerseys of much younger adults to display their loyalty to a team. It’s how two complete strangers can immediately bond by sharing experiences from a common fanhood. It’s why I spent $2,000+ as a recent college graduate to watch Notre Dame battle Alabama live at the 2013 BCS Title Game (let’s not rehash what happened during that game).

The lack of a community is what has made 2020 and beyond so challenging. The pandemic stripped us of all the joys of serendipitous gatherings at a bar for the big game. Without the traditional gameday experience, fans are missing that emotional attachment to a team. In most places, television is all we have, since fans aren’t allowed in stadiums or arenas. 

With the rise of mobile, the ‘second screen’ experience has been the natural evolution for fans feeling connected to a larger population while watching the game from home**. Essentially, viewers have sports on television while simultaneously playing on their phone (or computer). I’ve heard Twitter, my platform of choice, described as the World’s Greatest Sports Bar for its ability to facilitate interaction between people from across the globe as it relates to live sports contests. 

As technology has advanced and the pandemic introduced barriers to in-person interaction, social watch party technology has emerged as the next frontier. The rapid rise of video game streaming on Twitch and other free platforms has shown a tremendous appetite for social viewing. Sports had been slower to evolve given the complications of media rights ownership. However, multiple new companies are tackling social watching in the sports space to replicate the community aspect. I’ll touch on some of the vendors in the sports tech section below.  

So I understand the trends but how does building a community help a sports organization generate more revenue? 

The Harvard Business Review published a good article titled, “Want More Loyal Customers? Offer a Community, Not Rewards.” My favorite line: “In the modern aspiration economy, people develop true brand affinity only when it gives them a sense of community.”

This concept links directly to the pareto principle pareto principle, which says the 20% of your most loyal customers contribute 80% of your company’s revenue. Customers who have true brand loyalty are usually ingrained in that company’s community. By identifying those top 20% loyal customers, you can concentrate marketing efforts on this segment to increase sales of tickets, merchandise, digital products, etc. 

Sports organizations face a significant problem though. For the longest time, community building was outsourced to the existing social media platforms. For example, Facebook fan groups made sense since people already spent a large portion of their time on Facebook. But Facebook was the sole beneficiary of these allegiances, improving their individual consumer profiles and optimizing their advertising algorithms. Meanwhile, sports organizations received no visibility into who their fans really were, passing up valuable data and sacrificing the ability to drive better conversion rates. The good news is that organizations are quickly recognizing the value of first party data, while more sports tech companies are popping up with solutions to address this data capture. 

That’s a great segue. Give me some sports tech companies who are set up to thrive.

I’ll explore two different segments: 1) Capturing first party data and 2) Watch party technologies. 

Let’s start with sports tech companies focused on building or mining communities to capture first party data. There’s been a significant shift over the past decade from team-centric news apps to a more robust gameday app experience complete with mobile ticketing, mobile ordering, social media and other gamification integrations. Professional teams and leagues have led the charge – see YinzCam as the official partner of the NFL – and I expect colleges to start following the trend (shameless plug – we’re helping several D1 institutions evaluate options. If you’re reading this and are in the market to revamp your digital strategy, feel free to get in touch with EngageMint Partners. The app providers who will win in the  long term understand the value of backend data analytics and the ability to segment and / or personalize fan experiences within the app. 

TopFan is a company whose value proposition revolves around the premise that customer data is organizational gold. A white-label mobile platform allowing organizations or influencers to build direct relationships with fans, TopFan has created a mobile community for the Denver Broncos separate from their gameday app. With TopFan, organizations or influencers have six-figure plus revenue upside by selling subscriptions to exclusive content, merchandise using exclusive drops and sponsorship inventory throughout. Initial results have more than doubled industry benchmarks, with average customer session length on the app exceeding 15 minutes (vs. 6 minutes for comparison).

Then there are companies like Pico that take a different approach to resolving an organization’s lack of first party data. Pico uses gamification and other digital activations across existing social media platforms to identify fans and collect data that can then be migrated to an organization’s CRM. Using Pico’s tools, an organization can have much lower customer acquisition costs versus other methods like Facebook ads while creating new sales channels for tickets and merchandise.

Pivoting to watch party technologies, companies that have emerged include Bleachr, Sceenic, Hot Mic and Maestro. All four have different value propositions and target customers: 

  • Bleachr introduced a new CrowdView Live platform several months back aimed at providing a more interactive watch party. Sports organizations choose events to host through the platform and invite fans to share the experience. 
  • Hot Mic is aiming to be the Twitch for Live Sports. Brands or sports organizations can tap a host to create and facilitate a new watch party, while all the viewers can watch a game altogether.
  • Maestro offers a white-label turnkey platform to clients for interactive video channels, fan-driven draft parties and virtual tailgates. Fans are able to create breakout rooms and watch together. 
  • Sceenic targets more media companies and leagues but like Maestro, provides a white-label software solution for friends and family to watch programming together. 

I fully expect watch party technology to continuously evolve given that most of these products emerged as a Covid response. There’s a possibility that AR / VR type technologies become the dominant social watch technology in the future, but in the meantime, social watch parties represent a powerful tool for potential sponsorship activation. The organizations able to use the tools most creatively (i.e., having a popular analyst or influencer host) can generate significant fan interest and truly enhance loyalty within their existing communities.

Let’s wrap there since you’ve probably had enough sports tech talk to last the week. 

Until next time,

– Charles

Next week, I’ll release an analysis of the recently launched Fan Controlled Football League, since a lot of the league’s strategy fits in with this Building a Community theme. Think of that as a mini-edition. The next full edition in two weeks will explore the Future of Ticketing.

Footnotes:

*Investment platforms creating their own media outlets is another major trend: Cutting out the middlemen and controlling your own narrative. I’ll explore this as part of a larger DTC edition in the future.

**We’ll dive into some of the metrics behind second screen experience and the overall trend in more detail in a later edition.

Disclaimer – EngageMint Partners does not have existing financial relationships with any of the sports tech companies discussed. However, as part of our day to day, we have frequent conversations with companies to better understand their business models on behalf of our clients. If you’re interested in further insights on specific companies and sectors, do not hesitate to reach out. 

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Chatting Sports Tech

Edition #1.5 – Super Bowl Post-Mortem

Since Edition 1 of Chatting Sports Tech went deep on the Super Bowl’s importance to the media industry, I wanted to craft a quick post-mortem after viewership numbers were released. Hence, Edition 1.5. Most of the insights are from people who follow media numbers way more closely than I do, but I’ll add my spin and link back to concepts touched on in Edition 1.

Edition 2: The Power of Community in Sports will still be posted toward the back-end of this week, following the regular bi-weekly schedule. 

Let’s dive in.

First off some facts

  1. The Super Bowl drew an average of 96.4 million viewers. That represents a 15% decrease from the previous year (Sports Business) and made it the least watched Super Bowl since 2007.
  2. The TV specific average was 91.6 million viewers while the digital stream averaged 5.7 million viewers (SB Viewership).
  3. The number of digital streamers represented a 65% increase while the number of at-home specific TV viewers decreased by nearly 9% from 2020 
  4. The median age of viewers was 50.6 years, up from 49.1 a year ago and 46.1 three years ago (Sportico).

This Super Bowl was marketed as GOAT versus the heir to the throne and should have been a ratings bonanza. But that clearly was not the case. What’s the immediate takeaway?

The honest answer – everything is relative and a little more context is necessary before jumping to conclusions. In other words, simply comparing viewership versus the prior year is a fool’s errand.

One of my favorite twitter follows and great storyteller, Joe Pompliano, wrote a good piece here. Some of the most relevant points:

  1. The finals of every single other major sports event was down significantly during the pandemic. Compared to the year over year performance of the Stanley Cup (-61%) and NBA Finals (-49%), the Super Bowl’s decrease doesn’t look as bad. Granted it’s not a great comparison given calendar timing and a more crowded Fall sports schedule, but the point remains that decreases have plagued all major sports.
  2. The Super Bowl still significantly outperformed every single other television program of the year. By a lot. Not surprising at all. When that’s no longer the case, media executives and Roger Goddell can officially start panicking.
  3. Given NFL regular season ratings were down 13% on the year, the Super Bowl viewership numbers are fairly in line.
  4. There are way too many factors to attribute a single cause for the decrease.

I’ll add three other things playing a part in depressed ratings / decreased viewership over the course of the night:

  1. Pandemic impact – I’m assuming the pandemic prevented the typical Super Bowl watch parties (“assuming” because everyone seems to have their own guidelines in place for what constitutes ‘safe’ behavior). Under that assumption, the people who care less about the football game but watch due to social pressure and the forced next day water cooler talk may have skipped watching the game altogether. Expect this to rebound next year, according to Fox Sports Head of Strategy.
  2. The blowout didn’t helpSportico’s article provides the number of viewers at different points during the game and predictably, the number of viewers dropped precipitously once Tampa ran away with the game. Compare that to Eagles-Patriots in 2018, where there were actually more viewers watching the game’s end versus the halftime show.
  3. The Refs Ruined The Game! – I’m stretching here, but based on my twitter feed, you would have guessed the referees all padded their 401Ks by wagering heavily on Tom Brady and his quest to conquer natural aging based on the lopsided penalty calls for Tampa. But I wouldn’t be surprised if a small portion of viewers just gave up on the game out of frustration.

Will these Super Bowl viewership figures influence future NFL media rights?

No. Almost certainly not. This Super Bowl represents only a single data point. Meanwhile, as Edition 1 mentioned, the NFL retains the most dominant position in the television world. The league’s relative strength versus other programming has actually increased with cord-cutting. In other words, the NFL remains appointment viewing when non-sport and news programming continually shift to on-demand, OTT platforms. 

Based on figures floated in the media, the next round of media rights should represent a significant increase on the current deals. The NFL is pushing to get a deal done before March. Why the rush? Given 2020-2021 losses due to a lack of ticket sales and that the salary cap is tied to league wide revenue, locking in new guaranteed media payments could allow the NFL to get creative and smooth the salary cap going forward instead of taking a massive hit for the upcoming year. 

What are the long-term takeaways?

The most obvious long-term takeaway is that cord-cutting isn’t going away and may even accelerate. Per the Sportico article, 17.8 million fewer people were watching TV on Sunday night compared to one year ago according to Nielsen. With every media company throwing its weight and attention behind its streaming platform, the writing is on the wall for Pay TV. An eMarketer survey conducted as of July projected 27.1% of households would have cut the cord by 2023. I’d guess that projected 2023 number would realistically be closer to 35% given pandemic effects and increased number of streaming options. Meanwhile, though plenty of people in the media championed the 65% increase in Super Bowl streaming, the absolute number of streamers is still a small fraction of overall viewers. I’ll dive more into cord-cutting in a future edition so let’s move on.

The aging population of viewers represents an alarming trend for the NFL though. Part of that aging is being captured in cord-cutting statistics as the typical cord-cutter skews younger but don’t expect the NFL to see this statistic and sit idly. Capturing the 18-49 year old demographic is crucial for the longevity of the major sports. I’ll also address targeting the youth population in a future edition since it’s a major priority of all the leagues.

A less obvious takeaway is that gambling has already fundamentally changed our appetite to watch sports and will only become more prevalent with increased legalization. Research shows people are more engaged with skin in the game (every sport tech company addressing gamification preaches this non-stop). Once it was clear Super Bowl LV was out of hand, any gambler not personally invested in a team is no longer interested in a game’s outcome if their wagers are dead. Compare this year to last year’s big game, where the Chiefs staged an exciting fourth quarter comeback to knock off the 49ers. The result was always in question and viewership remained high throughout. Yeah but it’s the Super Bowl. Don’t you want to watch until the end? I’d argue 21 weeks of watching sports rooting for outcomes over teams (e.g., the favorite needs to win and cover versus simply win) instills a certain sticky behavior that even the Super Bowl cannot overcome.

Now that the game was played and viewership numbers are in, are any of the trends highlighted in Edition 1 of Chatting Sports Tech impacted?

Let’s revisit edition 1’s three trends: 1) Greater Marketing Discipline, 2) Experiences > Stories and 3) Importance of Building Goodwill. 

Starting with the easiest one, nothing about Super Bowl LV changes the importance of building goodwill in my opinion. Several other brands besides Budweiser came forward and announced foregoing their annual Super Bowl ad in favor of good causes.  

Regarding marketing discipline, I would expect the soft Super Bowl LV ratings result in future ad prices remaining relatively flat, possibly a bigger impact than my initial prediction of gradual increases. I’d expect recency bias to cause brands seeking timeslots towards the back end of the game to approach with more hesitation. The risk of a blowout means potentially less eyeballs and less eyeballs equals a worse ROI for advertisers (though the opposite argument applies if later time slots are cheaper and the Super Bowl then remains close). 

Reiterating the experiences over stories trend, several other brands followed Pepsi’s halftime lead, using their ad slots to drive traffic to other activations. Bud Light stands out, reuniting the subjects of its most famous campaigns around its Bud Light Legends Campaign but don’t forget Reddit purchasing 5 seconds from another company’s timeslot, causing thousands of people to hit rewind. Activations and experiences will slowly become the norm. 

Anything else?

One more point on advertising revenue. I found this chart of Youtube versus Netflix advertising revenue pretty interesting. Since fixed advertising budgets create a zero sum game (i.e., an allocation to one platform takes from another platform), Youtube drawing more advertising dollars means less dollars devoted to traditional media.

I hope you didn’t bet on my Super Bowl Prediction (Insert Smiley Face)

Shoot me an email and let me know what you thought. Would love to debate or discuss any of the above in more detail.  

Only ~350 days until the next Super Bowl,

– Charles

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