U.S. sports fans are spending more time getting their fix through digital channels: 30 percent now stream live sports on their smartphones or tablets, and 80 percent% use the internet when watching sports to enhance their experience. For them, digital is the new normal.
We at Two Circles think this is a huge opportunity—albeit a challenging one—for sports rights-holders, which we exclusively work with.
With the push of a button, they can publish a piece of content that reaches millions of fans directly in seconds. That makes them media owners, and it means that they have to tackle the same existential threat being faced by “traditional” media owners such as newspapers and broadcasters: how to effectively make money from the content they produce in a digital world where large amounts are given away for free.
Unfortunately, we see too many putting as much content as possible on platforms such as Facebook and YouTube—and judging success with increasing levels of engagement and social followings. This isn’t a viable long-term strategy. The social giants can bring huge reach and access to new audiences, but through their content, sports rights-holders are building an audience not for themselves, but for the social platforms. And it is the social platforms that are therefore benefiting.
We at Two Circles firmly believe that sports organizations shouldn’t embark on a digital strategy until they know how they’re going to use digital platforms to deliver themselves, and their partners, long-term and sustained business growth. And even if a key objective is reach and/or to engage with a younger audience, this isn’t a good enough reason alone to throw all of their eggs into the social basket.
How will they turn reach into revenue? Will it be by selling the audience tickets, merchandise and subscriptions? Or do they have sponsors that want to reach a specific demographic? These are some of the questions they need to ask to formulate the right digital strategy.
Channel mix and content strategy
Critically, rights-holders have an opportunity to put content on their own platforms—environments where they can own the experience and data on their fans’ content consumption—and they are digital environments that, when appropriate, can be used to charge for content.
It’s a complex and fragmented landscape, but the most successful sports organizations on digital are those that have a clear understanding of how they can balance reach and revenue across a range of owned and third-party digital channels—deciding the right mix, as is now standard, by using data around the media habits and preferences of their target audiences.
We at Two Circles think three organizations that are doing well on digital at the moment all have a clear understanding of the revenue/reach challenge.
National Basketball Association
The NBA has a clear channel strategy, and it shapes its product with deep audience insight.
By using a range of social media platforms to target a young fan base with native, snackable content, the NBA is driving interest to live broadcast coverage on its linear broadcast partners and its owned over-the-top platform.
Media consumption data from the NBA’s OTT platform, meanwhile, has been used to change the game format and introduce a new micro-transactional option product where fans can view the fourth quarter of a live game for $0.99.
Vegas Golden Knights
A team creating an identity from scratch, the National Hockey League’s Vegas Golden Knights have used a mix of social platforms to build an audience using a tone of voice that’s significantly different from your traditional NHL team.
The Knights know that in order to grow a long-term fan base, they need to speak to millennial and Generation Z audiences on their native platforms and in a tone of voice that’s familiar to them. Once this fan base has been established, commercial opportunities will come further down the line by shaking up the channel mix.
National Football League
With its OTT proposition, Game Pass (full disclosure: Two Circles runs the digital marketing for Game Pass across Europe), the NFL has a digital subscription product that delivers exclusive and personalized content to hardcore fans and uses data on consumption habits and preferences to shape the content created for the platform.
Critically, Game Pass also sits alongside traditional broadcast partnerships that reach a more mainstream audience and, therefore, its content channels don’t cannibalize each other.
Sam Yardley is a senior vice president at sports marketing agency Two Circles.