Advanced Television

Report: Digital tech to drive sports revenue growth

January 15, 2019

A report by global digital infrastructure provider Tata Communications examining the commercial transformation of sports identifies 2019 as a defining tipping point for the global sports industry, with digital technology innovation set to kick-start a new era of unprecedented commercial growth for broadcasters, rights holders and sports organisations.

The Show Me the Money! report – featuring insights from Formula 1, MotoGP and European Tour plus major global players HSBC and DAZN – highlights that streaming platforms, eSports, VR apps and other technology innovations are quickly becoming new crucial revenue drivers for sports alongside media rights, event attendance, sponsorship and merchandising. Not only do they help grow a sport’s global viewership in terms of volume, they can boost engagement among fans, creating a more compelling value-proposition for sponsorship and advertising.

That is why, according to the report regardless of the role an organisation plays in sports, it should have a unified digital strategy to unleash new opportunities for growth.

Describing digital technologies as the “secret sauce” for monetising fan engagement, the report notes that a successful digital strategy is all about augmenting the fan experience. This could mean enabling people at the stadium or trackside to experience sports in new ways or connecting people around the world to the live action in the most immersive ways possible.

Digital platforms also allow sports to create more emotional connections: more direct access to leading sports stars through platforms like Instagram helps fans identify with the big personalities. This makes them ‘stickier’ from a commercial perspective – so more likely to buy TV and streaming subscriptions, more likely to attend events and more likely to buy merchandise.

Other key findings include:

  • The lines between traditional and digital media platforms have blurred, causing a seismic shift in the entertainment landscape, tearing down traditional geographical barriers, and highlighting the need for the sports ecosystem to rethink how revenues are generated.
  • Digital platforms are giving sports access to geographies and audience demographics they were previously unable to reach.
  • The approaches the sports ecosystem is taking to reach new audiences and improve fan engagement are highly interrelated: the desire to get more people streaming live content on Facebook does not negate the necessity for packing stadiums full of fans.

“This report demonstrates that 2019 can be a defining tipping point for the sports industry,” said Mehul Kapadia, Managing Director of Tata Communications’ F1 Business and the company’s Global Head of Marketing. “Digital technologies are kick-starting a new era of fan engagement, and it’s going to be fascinating to see where the journey takes us. Yet, it’s important to remember that digital technologies are the friend, not the enemy, of the live experience. So, as the digital fan experience gets better, the pressure is increased to ensure that fans at venues can engage with the action in new ways too. A holistic fan engagement strategy enables broadcasters, rights holders and other key players in the sports ecosystem to maximise the commercial opportunities that digital platforms offer.”

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