Pushing buttons dominates modern sport
Nielsen Sports, the provider of analytics for the sports industry, recently gave their annual presentation on the biggest trends in sports business and the two major talking points over the last year are the rise of e-Sports and the fact that sports bodies and their sponsors have to know who their fans are in this rapidly evolving marketplace.
Their research shows that, on average, only 10 to 15% of any sport’s fans are actually “game experts” – people who have intimate knowledge of the rules, history, players, tactics etc.
So any sports body or sponsor that only targets this section of the fan base are clearly missing out, for instance on the 30-35% of “connection fans” – for them it’s about the big event and they are the people packing out the stadia for Pink Day, the Cape Town Sev- ens rugby or the Durban July.
In the past, the relationship between a sport and a brand was based on the sponsor wanting visibility and the sport just wanting money.
But this relationship is now much broader and the rights a sports body sells need to be more flexible and more tailored to their specific partners. Sponsors these days want to own stories and content rules in this digital age in which internet advertising spend overtook that for TV worldwide last year.
It was disappointing to hear that our traditional sports like rugby and cricket are battling to grow in this environment. In South Africa; 25% fewer millennials are interested in rugby, and cricket has seen the same drop in support.
The fastest growing sport in the world is e-Sports, which is basically what professional, competitive gaming is called, and unfortunately, rugby and cricket just don’t have games on the market that are good enough. Research has shown there is a strong crossover between people who play the virtual game on their computers and supporting the actual “live” sport.
For instance, Fifa’s e-WorldCup drew seven million gamers last year and Formula One enjoyed similar success with their eSports Final, the winner of which gained a one-year contract as a simulator driver for McLaren.
That e-Sports is rapidly evolving into a major player in the sports industry is shown by the fact that one-third of all their fans came onboard in the last year and they are typically millennial men with money to spend.
Which means major global brands like Gillette, C-Smart and Mercedes are moving into that space, the higher LSM also attracting sponsors like Audi and Mountain Dew.
Gaming is a $32 billion industry now and at the competitive level it is a mega-production, a whole show with adverts, sponsored decks and kids packed into stadia.
This year’s Overwatch League features 12 franchises based in cities like Boston, London and Shanghai who paid $20 million each to participate.
The broadcast rights were sold for $90 million and the average audience is 280 000 per minute.
Speaking of broadcast rights, this field has also become extraordinarily broad for sponsors and sports bodies. Pay TV’s influence is still stable, but there are disruptors now in the picture, especially tech giants like Amazon and Facebook and even Twitter.
The cellphone has become a way of life and we are living in a mobile-first generation. Although high data costs hold us back in South Africa, 20% of local football viewers watch via internet streams, with 69% of those people watching the game live and 42% of those watching the whole game.
Rugby has 25% of its viewers streaming the game, 68% of that watching live and 48% for the whole game; cricket’s figures are 22% streaming, 78% of that live and 40% watching the full game.
The sports industry is certainly a very fluid environment for rights-holders and sponsors to get their heads around.