From transportation to healthcare and entertainment, innovations in consumer products and services are in the highest gear ever. Not surprisingly, advances in technology – both hardware and software – are driving rapid change and disruption, altering economic models more rapidly than some managers can handle.
Intel’s President Brian Krzanich says chips and computers are undergoing another revolution, leading to greater efficiencies and profits for those who adopt, or death for those who do not embrace this change. Part and parcel, brands are positioning themselves for millennials who consume and engage with richer, but shorter-form content primarily on mobile devices.
Pointing to the growing value of brands connecting with sports, some observations and forecasts:
• Arenas are evolving from simply a place to conduct a sports competition to full-on entertainment complexes with F&B, fun technology and hospitality galore. Making them tech friendly is a priority; after all, the current level of tech support at sports events and facilities is poor. A major goal is to speed connectivity so fans can send messages and post on social channels quickly, and avoid waiting for pages to load; every second someone looks down at their device and not the live action lessens the arena experience. Leagues and teams want to facilitate fans socializing passions for their teams, and the more they absorb live game experiences, the more games they will attend. Arenas of the future will have fewer seats as virtual reality provides premium level fan experiences for those staying at home.
• Tech is driving greater fan experiences and engagement, allowing teams to recognize customers and track their preferences. The goal is to streamline the customer experience; for example, alleviating parking hassles and ensuring speedy lines to gain entry and receive food and drink. Improved entertainment and service are both vital as the quality of the media broadcasts improves, giving people more reason to stay at home and be entertained. While many of us doubted sports would be consumed on mobile devices, hi-definition video and audio make our phones the primary device for viewing content.
• LeBron James’ high school friend Maverick Carter is correct in saying sports will continue to grow in relevance as its tailor-made for storytelling with technology bringing emotions to the human dimension. Social media continues to expand using digital information to track and tell short-form stories about our favorite stars. And most of it evolves into even more user-generated video – YouTube’s chief estimates 75% of all videos viewed will be digital versus television.
• Media is also improving experiences at home as higher fidelity audio, multiple hi-def cameras and new player performance statistics more richly engage fans following their favorite sports and stars. Think of robots with 360-degree cameras in the front row of various sections of stadiums and arenas. For a premium fee, you can access these virtual-reality seats and even get “member-only” content from coaches and players. This is partly in response to the disruption of traditional (cable) distribution with new and traditional broadcasters testing niche, skinny bundles to address millennials who are unplugging from traditional cable or “Generation Edge” that may never plug in at all.
• The advent of wearables further enables data capture from workouts and athlete diets, allowing us to follow even more “human” statistics of our favorite sports stars. Companies will use these stats on celebrity athletes to inspire consumers to track their own stats. This is one reason UnderArmour entered the wearables space, creating a performance tracking and analysis system similar to Fitbit: http://fortune.com/2016/01/06/under-armour-fitness-gear/
• Big Data is driving fan engagement. Draft Kings Founder Joe Ravitch estimates $3B+ is spent on data capture for gaming and team-athlete performance. Mark Cuban, a proponent of legalized sports betting, invested in FantasyLabs (similar to Draft Kings), though he believes daily fantasy is not gambling, but a game of skill. NBA Commissioner Adam Silver also favors regulated sports gambling and consensus is there are 100 countries which allow sports gambling. There is considerable runway here as Draft Kings and FanDuel touch only 5% of fantasy players.
• Advertisers like Verizon and Intel still look to television for reach and monetizing digital remains a huge challenge. WWE, with a major digital push into short-form videos, generated seven billion digital views, but earned just $7 million from this platform versus 10x+ more from television. Television remains the top medium for advertisers. However, what digital allows is context, and brands want to marry their context with content as a new medium of advertising. If a brand is weaved into a story about something of interest to consumers, it makes the brand relevant and the ad more authentic. Consumers won’t skip through relevant content like they will ads. The critical measure is engagement across all platforms, not limited to one; tech empowers platform integration tying television to data to gaming to social. Now, when you watch LeBron dunk, you can also click on the back story of how his limited-edition shoes were designed. Advertisers call this a wall of sound around big events where social and secondary / tertiary broadcasts tell the 360 story.
From healthcare to sports, we are about to enjoy experiences we only dreamed about just 10 shorts years ago. What will the next decade bring? Stay tuned.