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Facebook enters the fantasy gaming market
Facebook is getting into fantasy sports and other types of fantasy games. The company this morning announced the launch of Facebook Fantasy Games in the U.S. and Canada on the Facebook app for iOS and Android. Some games are described as “simpler” versions of the traditional fantasy sports games already on the market, while others allow users to make predictions associated with popular TV series, like “Survivor” or “The Bachelorette.”
The first game to launch is Pick & Play Sports, in partnership with Whistle Sports, where fans get points for correctly predicting the winner of a big game, the points scored by a top player or other events that unfold during the match. Players can also earn bonus points for building a streak of correct predictions over several days. This game is arriving today.
Image Credits: Facebook
In the months ahead, it will be followed by other games in sports, TV and pop culture, including Fantasy Survivor, where players choose a set of castaways from the popular CBS TV show to join their fantasy team and Fantasy “The Bachelorette,” where fans will pick a group of men from the suitors vying for the Bachelorette’s heart and get points based on their actions and events that take place during the show. Other upcoming sports-focused games include MLB Home Run Picks, where players pick the team that they think will hit the most home runs, and LaLiga Winning Streak, where fans predict the team that will win that day.
In addition to top players being featured on leaderboards, games have a social component for those who want to play with friends.
Image Credits: Facebook
Players can create their own fantasy league with friends to compete with one another or against other fans, either publicly or privately. League members can compare scores with each other and will have a place where they can share picks, reactions and comments. This league area resembles a private group on Facebook, as it offers its own compose box for posting only to members, and its own dedicated feed. However, the page is designed to support groups with specific buttons to “play” or view the “leaderboard,” among others.
The addition of fantasy games could help Facebook increase the time users spent on its app at a time when the company is facing significant competition in social, namely from TikTok. According to App Annie, the average monthly time spent per user in TikTok grew faster than other top social apps in 2020, including by 70% in the U.S., surpassing Facebook.
Facebook had dabbled with the idea of becoming a second screen companion for live events in the past, but in a different way than fantasy sports and games. Instead, its R&D division tested Venue, which worked as a way for fans to comment on live events which were hosted in the app by well-known personalities.
The company has several other gaming investments, as well, including through its cloud gaming service on the desktop web and Android, its Games tab for streamers, and its VR company, Oculus.
The new league games will be available from the bookmark menu on the mobile app and in News Feed through notifications.
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NBA Top Shot maker Dapper Labs is now worth $2.6 billion thanks to half of Hollywood, the NBA and Michael Jordan
From the early success of Crypto Kitties to the explosive growth of NBA Top Shot, Dapper Labs has been at the forefront of the cryptocurrency collectible craze known as NFTs.
Now the company is reaping the benefits of its trailblazing status with a new $305 million financing led by some of the biggest names in Hollywood, sports and investing.
The new round values the company at a whopping $2.6 billion, according to multiple media reports, and comes at a time when NFTs have captured the popular imagination.
Leading the company’s financing was Coatue, the financial services firm that’s behind many of the biggest later-stage tech deals. But heavy hitters from the entertainment world also took their cut — these are folks like NBA legend Michael Jordan as well as current players and funds including Kevin Durant, Andre Iguodala, Kyle Lowry, Spencer Dinwiddie, Andre Drummond, Alex Caruso, Michael Carter-Williams, Josh Hart, Udonis Haslem, JaVale McGee, Khris Middleton, Domantas Sabonis, Klay Thompson, Nikola Vucevic and Thad Young and Richard Seymour’s 93 Ventures.
Entertainment and music heavyweights including Ashton Kutcher and Guy Oseary’s Sound Ventures, Will Smith and Keisuke Honda’s Dreamers VC, Shawn Mendes and Andrew Gertler’s AG Ventures, Shay Mitchell and 2 Chainz also bought in on the action.
And from the venture world comes other strategic investors like Andreessen Horowitz, The Chernin Group, USV, Version One and Venrock.
The company said it would use the funds to continue building out NBA Top Shot and expanding the updated digital trading card platform to other sports and a broader creator community.
Top Shot has already notched over $500 million in sales for its animated trading cards featuring things like LeBron James dunking, and the sky (at least for now) is seemingly the limit for the collectible applications of blockchain.
It’s like the one thing that cryptocurrency can do really well and it’s been embraced far beyond the world of sports collectibles. The recent $69 million sale of a digital piece of art at Christies also marks a watershed moment for the art world.
“NBA Top Shot is successful because it taps into basketball fandom — it’s a new and more exciting way for people to connect with their favorite teams and players,” said Roham Gharegozlou, CEO of Dapper Labs. “We want to bring the same magic to other sports leagues as well as help other entertainment studios and independent creators find their own approaches in exploring open platforms. NFTs unlock a new model for monetization that benefits the fans much more than advertising or sponsorships.”
Powering the Top Shot system and Dapper Labs’ other offerings is a new blockchain protocol called Flow, which purports to handle mainstream consumer applications at scale, and can support mass adoption.
Flow also allows for transactions using fiat currency and credit cards, and provides a much needed ease of cryptocurrency, and can keep customers safe from the fraud or theft common in cryptocurrency systems, according to a statement from Dapper Labs.
Flow enables NFT marketplaces and other decentralized applications that need to scale to handle mainstream demand without extremely high transaction costs (“gas fees”) or environmental concerns, the company said.
“NBA Top Shot is one of the best demonstrations we’ve seen of how quickly new technology can change the landscape for media and sports fans,” said Kevin Durant, co-founder of Thirty Five Ventures. “We’re excited to follow the progress with everything happening on Flow blockchain and use our platform with the Boardroom to connect with fans in a new way.”
Already companies like Warner Music Group, Ubisoft, Warner Media and the UFC, as well as thousands of third-party developers, artists and other creators, are using the Flow mainnet to sell collectible cards and develop custodial wallets.
Additional investors in the round include: MLB players like Tim Beckham and Nolan Arenado; NFL players Ken Crawley, Thomas Davis, Stefon Diggs, Dee Ford, Malcom Jenkins, Rodney McLeod, Jordan Matthew, Devin McCourty, Jason McCourty, DK Metcalf, Tyrod Taylor and Trent Williams; team ownership, including Vivek Ranadivé (Kings); and notable sports investors Bolt Ventures.
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Why the Olympics should add esports
I recently sat on a panel for gaming website Pocket Gamer that was focused on esports and the Olympics. We were debating whether esports were filling the gap in sporting events, including the Olympic games, which have been paused due to the COVID-19 pandemic.
It was an interesting conversation that started out like most esports panels. The only difference here is that instead of the typical question, “When will esports catch up to traditional sports?” it was, “Will esports become mainstream enough to make it into the Olympics?” A slightly different question, but the same sentiment: The international games are one of televised sports’ marquee events, and esports companies hope to earn a seat at the grown-up’s table.
In truth, the Olympics have been dropping in ratings relatively steadily in the U.S. for a long time. The only Olympic games that scored in the top five ratings going back to 1992 were the Salt Lake City Winter Olympics, presumably because they were held in the United States. Overall, viewership has been declining in recent years and the games don’t hold the prestige they once did.
Additionally, audiences are slowly becoming worth less and less to advertisers because the age of the average viewer is rising rapidly, a trend we are seeing in almost all traditional sports.
I doubt it would surprise anyone to learn that the average age of almost all traditional sports viewership skews older than esports’ audience. Even then, I think the actual data will be quite surprising. Only one professional sport (women’s tennis) actually saw its average viewers age come down in the last decade or so. Even in that context, the average age of a Women’s Tennis Association home spectator is 55 years old.
The average age of esports viewership looks to be around 26 years old. Think about that from a marketer’s perspective. Traditional sports are just missing young people, by a wide margin.
Where are the kids?
But there are more factors at play than just a lack of interest from millennials and Gen Z driving this trend: There’s also a question of access.
The IOC made the decision in recent years to stream the Olympics (the way most younger people consume content), but it capped the ability to watch online to 30 minutes if viewers didn’t sign in with their cable company (a relationship many millennials don’t have) to continue watching.
Additionally, the IOC made the laughable decision to “ban” GIFs with the press covering the event, which qualifies as one of the more stupid things a governing body has ever tried to do. First, it won’t work. Secondly, and more to the point, it demonstrates how out of touch the IOC is with the ways in which media has evolved in the last 20 years.
However, unlike the Olympics, where no corporation owns the rights to volleyball or the pole vault, all esports companies own the IP associated with the game itself. That means, by default, the IOC would not have carte blanche when making decisions about how to represent the games, programming, licensing rights and other factors it has enjoyed for a long time.
Finally, it’s worth noting that the IOC doesn’t like the idea of “violent” games being added to the Olympic roster. It would prefer to see current sports transformed into virtual competitions. But anyone who knows anything about esports understands that this isn’t how esports works. Before a game ascends to esports royalty, it needs to be a good game. If nobody plays it, it’s unlikely anyone will want to watch it.
Secondly, it has be digestible as a viewing experience. World of Warcraft Arena is a game that draws a lot of players, but it’s almost impossible to know what is going on unless you’re an expert at the game or you have a godly shoutcaster who can translate the on-screen action. You can’t make track and field an esport and hope audiences will want to watch.
The IOC Solution
The IOC has taken steps to try and stave off declining youth viewership trends by adopting sports considered “young” in the past few years. Five sports recently added to the Olympic games include:
- Sport climbing
- Surfing
- Skateboarding
- Karate
- Baseball/softball
The baseball/softball addition notwithstanding, I think you would have to live under a rock if you thought that competitive sport climbing held a candle to Fortnite or League of Legends in terms of generating youth interest. Frankly, this seems like an idea that came from an old person trying to find a way to “get the kids back.”
To the IOC’s credit, it has begun to hold panels and conferences with esports experts and game publishers, but the deals that will come from these will look REALLY different than what they are used to. It seems to me that we have a long way to go here.
For my part of the panel, I argued that the Olympics need esports much more than esports need the Olympics. Media companies are only going to overpay for broadcasting rights for traditional sports for so long. At some point, someone is going to notice that the “inside the demo” group isn’t there and move on.
The thing that esports CAN get from the Olympics is understanding a better way to monetize its audience, something that the Olympics do well and esports doesn’t do well right now. A report from Goldman Sachs shows the audience size and monetization based on that audience, showing that esports dramatically underindex on monetization relative to their more established sports league equivalents. It is clear that esports is immature from a monetization perspective and, while the Olympics aren’t on this chart, I would assume that it punches WAY above its weight, much like MLB does, trading on its reputation more than on actual results these days.
The IOC should act fast, though. It won’t be long until esports figures this whole thing out and once they do, the Olympic games won’t have anything to offer this emerging media powerhouse.
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With stadiums closed, TV networks turn to live esports broadcasts
The COVID-19 pandemic has wiped out the spring seasons for professional sports and associated revenue for TV networks, but esports is filling part of that void.
Gaming companies behind titles licensed by each major league are the winners in this unexpected shift; Electronic Arts (EA) is first among them with FIFA, Madden NFL, NBA Live and NHL in its EA Sports portfolio and more than 100 esports events planned for 2020. The way EA, networks and sports leagues are responding to production challenges in this crisis will reshape the esports market going forward.
Millions of people sheltering in place has created a breakout opportunity for esports broadcasting:
- A large portion of the internet-using population is at home 24/7, with screens as their main entertainment outlet;
- Sports fans have few competitive live events to watch;
- Broadcasters like ESPN, CBS, and Sky lost their most valuable content for attracting live viewers and need alternative content;
- Star athletes and non-sports celebrities are stuck at home with wide-open schedules.
In late March, 900,000 viewers tuned into Fox Sports for Nascar’s iRacing series, with 1.1 million watching in early April; the network has also broadcast Madden NFL tournaments with NFL commentators and athletes. ESPN is televising NBA players facing off against each other in NBA 2K (by Take-Two Interactive) and pro drivers (and other pro athletes like Manchester City striker Sergio Aguero) are racing each other in Codemasters’ F1 2019 game. ESPN has broadcast competitive play of non-sports games with League of Legends (by Riot Games) and Apex Legends (by EA) tournaments.
To be clear, ratings for these events have varied widely, but networks and game companies are rethinking how esports is broadcast, which will advance its pop-culture appeal.
Games adapting pro sports are best bridge to non-gamers
Esports is a massively popular activity with its own large piece of turf in pop culture, but it hasn’t secured a central role. Research firm Newzoo pegs the global audience of “esports enthusiasts” at 223 million. But unlike soccer and basketball, esports is siloed because it caters to viewers who are generally avid gamers. The action is extremely fast, so commentary by a streamer rarely helps outsiders understand what is going on enough to become engaged.
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MLB Ballpark app adds Apple Business Chat-powered concierge experience for All-Star game
Just in time for tonight’s Home Run Derby, Major League Baseball is rolling out a new feature on its Ballpark app that utilizes Apple’s Business Chat feature for a customized in-person experience. MLB says it’s the first league to roll out the feature, letting users ask location-specific questions — though Apple Business Chat has been used for things like drink orders in the past.
Clicking into the Indians section will bring you Progressive Field, the center of this week’s festivities, where you can access the new All-Star Concierge feature. Developed alongside New York-based AI startup Satisfi Labs, the feature is designed to answer simple questions.
From there, it will either answer straight away or open the appropriate app, like Maps and Calendar. In the case of this week’s events, that could mean something as simple as the start time for the derby or something more specific like where to pick up a shuttle to a specific hotel.
The feature is being rolled out to start with tonight’s Home Run Derby and tomorrow’s All-Star game, but it should start arriving in more parks after the All-Star break as different stadiums begin to implement it. MLB has been experimenting with a number of different features to enhance the ballpark experience via smartphone, including, notably, the addition of an AR stat feature.
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Live streaming studio, Culture Genesis, launches its first show, the quiz-based Trivia Mob
A new generation of entrepreneurs is emerging to refashion the Los Angeles studio system for the digital age, forming companies that combine live-streamed video, podcasts and the newfound social media celebrities to craft entertainment for a new breed of consumer.
Two of those startup founders, longtime Apple executive Cedric Rogers and former developer for VEVO and MLB digital Shaun Newsum, are now pulling the curtains back on the first fruit of their production studio, Culture Genesis, with the launch of TriviaMob — a new quiz show targeting urban audiences.
The two creators envision their company as a combination of 106 & Park and Jeopardy with questions aimed at cultural references for the Highsnobiety and Complex set.
TriviaMob players can win up to $10,000 in cash by competing individually or as part of a group (or “mob”) to win collective prizes by tuning in and competing to shows that stream every Sunday. Each player has 10 seconds to answer 10 questions around art, music, science and history. Players that answer all of the questions correctly will get a share of the $10,000 prize and participants who opt to be part of the “mob” can earn points for sponsored prizes.
For its foray into live-streamed appointment entertainment, Culture Genesis has tapped Melvin Gregg, the influencer and star of Netflix’s American Vandal series along with a host of… well… hosts, including former Miss USA contestant, Brittany Lucio; DJ Damage, the co-host of Sean “P. Diddy” Combs’ flagship show, REVOLT Live; Jessica Flores; and TV host and comedic actress Dariany Santana.
Backed initially by Los Angeles-based accelerator MuckerLab and Betaworks’ latest LiveCamp program, the two founders see Culture Genesis as tapping into the twin trends of gaming and mobile technology adoption in young African American and Latinx communities. The founders cite statistics indicating that 73 percent of African Americans and 72 percent of Latinx consumers over 13 years old identify as gamers.
“We’re building software for an urban, multicultural audience that continues to lead and influence culture — not just in the U.S. but around the world,” said Rogers, in a statement. “We see this influence growing in Hollywood but it’s not happening fast enough in Silicon valley. We want to accelerate this shift.”
The business model mimics that of HQ Trivia, the once-popular quiz show whose success has waned even as it scored massive gains in venture fundraising — valuing the company at a reported $100 million.
But the founders of Culture Genesis see their first product as fundamentally different from HQ. “People want to see things for them by them,” says Rogers. “From our perspective HQ meant nothing to our audience.”
Newsum, the company’s chief technology officer, goes even further. “I think HQ was a prime example of our thesis. HQ from a multicultural perspective — that didn’t appeal to our audience. Part of what we’re doing with Cultural Genesis is bringing that urban understanding.”
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Live streams of karate and niche sports are terrifying major sports leagues
Of the 100 most-watched live telecasts in the US in 2005, 14 were sporting events; in 2015, sporting events comprised 93 of the top 100 telecasts. That shift occurred because TV shows are shifting to online or on-demand viewing, and live broadcasts of the biggest sports are the main thing TV networks have left to draw in live audiences. But the need to keep those sports on TV and off streaming services is only accelerating the rate at which young people are tuning into other sports leagues instead.
The rapid adoption of subscription video streaming services like Netflix and Hulu and of social live streams on Facebook, YouTube, and Twitch is enabling massive growth by sports leagues that you won’t normally see on TV. In the streaming era, more sports – and new types of sports like esports – keep thriving while interest in traditional pro leagues like the NFL and MLB declines.
OTT is where the growth is
The central narrative in the global film/TV industry right now is the response of incumbent companies to the growing dominance of Netflix, Amazon, and other streaming (aka “OTT” or over-the-top) services. The incumbents are merging to consolidate ownership of must-have shows onto a smaller number of new OTT services that will each be stronger.
The majority of American households have a Netflix subscription (i.e. access to one of Netflix’s 56M US accounts), another 20M have a Hulu subscription, the number of OTT-only households has tripled in 5 years, and 50% of US internet users use a subscription OTT service at least weekly. Almost one-third (29%) of Americans say they watch more streaming TV than linear TV, and among those age 18-29 it’s 54% (with 29% having cut the cord on linear TV entirely). People, especially young people, want to watch shows on their own time and on any device, and they get more value from a few $8-40 per month subscription platforms than a $100+ per month cable bill.
Meanwhile, social live-streaming platforms that got their start enabling people to either vlog or watch video gaming are expanding to all sorts of live broadcasting: Twitch averaged 1 million viewers at any given point of day in January, and there were 3.5 billion broadcasts over Facebook Live in the first two years after it launched (with 2 billion users viewing at least one).
We’ve hit the pivot point where media is streaming-first. Netflix is now the leading studio in Hollywood, spending $13 billion this year on content. Linear TV viewing is declining: every major cable network (except NBC Sports) has declining viewership and aging viewers. Between 2007 and 2017, the median age of primetime viewers on ABC, CBS, NBC, and Fox went up 8-11 years and are all in the 50s or 60s.
Major pro sporting events are the last bastion of TV networks because the dominant brands are, for the most part, only available live on TV. Beyond those, the only content getting large audiences to tune in simultaneously are a couple Hollywood awards shows and premieres or finales of a couple hit shows (Big Bang Theory and NCIS).
The exclusive broadcast rights to those live sports events – particularly the NFL, NBA, MLB, and top NCAA basketball and football games – are the last defense for major broadcast networks. They are the reason for younger Americans to not cut the cord. ESPN makes $7.6 billion per year in carriage fees from cable companies paying for the right to carry the main ESPN channel (the other ESPN channels add another $1 billion); that number is increasing even as ESPN’s viewership is declining.
Disney (ESPN’s owner) and other leading broadcasters don’t want to let people watch major sporting events online instead (at least not easily or cheaply) because doing so would pull the rug out from under their traditional revenue stream and OTT revenue (subscription + ads) won’t make up for it quickly enough. This problem is only exacerbated by the fact that TV networks are paying record sums for exclusive broadcast rights to top sports leagues out of fear that losing them to a rival could be a nail in their coffin.
This strategy is delaying, not stopping the shift in consumption habits. More and more young people are tuning out (or never tuning in) to the major pro sports on TV, and the median age of their audiences shows that: 64 for the PGA Tour, 58 for NASCAR, 57 for MLB, 52 for NCAA football and men’s basketball, and 50 for the NFL…and all are getting older. (Cable news networks, the other holdouts who are still doing well on live TV face the same situation: the average age of Fox News, MSNBC, and CNN viewers is now 65, 65, and 61 respectively.)
The major pro sports staying on linear TV has expanded the market opening for new sports to fill the open space with young people who mainly consume content online. In fact, a growing marketplace of different sports leagues (including esports) developing their own fanbases is an inevitability of the shift to OTT video as it lowers the barrier to entry to near-zero and let’s geographically dispersed fans unify in one place.
1. Lower barrier to entry for distribution
Lawn bowling is no longer your grandfather’s sports league. Mint Images/Getty Images
Niche sports leagues – or frankly, even big sports leagues that just aren’t at the scale of professional football, baseball, basketball, and hockey – have always had a hard time getting coverage on television. But you can produce and distribute video for an online audience more cheaply than for a television audience.
In fact with Facebook Live and Twitch, you can stream live video for free, and you can share clips across every social channel to attract interest. To launch your own OTT service or partner with an existing one, you don’t need to start with a massive audience from the beginning and you don’t need millions of dollars from sponsors just to break even.
Having signed over 150 new deals this year alone for its 20+ sports verticals (which will stream 2,500 live events in 2018), Austin-based FloSports has established itself as the go-to OTT partner for sports leagues with an established, passionate following that aren’t massive enough to garner regular ESPN-level coverage.
From rugby, track & field, and wrestling to bowling, competitive marching band, and ballroom dance, millions of Americans have participated in these activities in their youth and through clubs as adults but rarely see them on television. In fact, the rare instances when such sports are on TV – like their national championships – the league is usually paying large sums (potentially hundreds of thousands of dollars) for that airtime rather than getting paid by the broadcasters.
FloSports gives a home to the superfans of its partner leagues, with full coverage of the sport and commentary meant for real fans. It produces events in the manner best fit to highlight the action and turns superfans – who generally pay a subscription – into evangelists who recruit friends. There are numerous sports that have millions of participants yet no active, high-quality event coverage; those are underserved markets.
By tapping into this, FloSports properties (like FloWrestling, FloTrack, etc.) have gained hundreds of thousands of subscribers and created a surge of interest in teams like Oklahoma State’s wrestling team, which saw an 144% increase in live stream viewing and 68% growth in event attendance after joining FloWrestling (leading to them to set an all-time attendance record in the university’s basketball arena of 14,059 people). In the first half of 2018, FloSports’ various Instagram accounts collectively received 307M video views, more than the collective accounts of Fox Sports or of all NFL teams (and NFL Network).
2. Going global right away.
Johanne Defay of France at a World Surf League event. Mark Ralston/AFP/Getty Images
The top pro sports leagues have geographically concentrated fan-bases that fit the geographic restrictions of TV broadcasters, which end at a country’s border. Online streaming empowers sports that have large fan bases who aren’t geographically concentrated to aggregate in the digital sphere with enough eyeballs (and paying subscriptions) to drive engagement with the sport’s content through the roof.
Since being acquired in 2015 and renamed World Surf League, the governing body of professional surfing has developed a large global following – with 6.5M Facebook fans and 2.9M Instagram followers – through the launch of live streams and on-demand video on its website and mobile app, plus partnering with third-parties like Bleacher Report’s OTT service B/R Live. Only 20-25% of WSL’s viewers are in the US but since its competitions are streamed direct-to-consumer online, they were able to reach surfers around the world right away. After seeing WSL’s Facebook Live streams garner over 14M viewers in 2017, Facebook paid up to become the exclusive live-stream provider for WSL competitions for two years, beginning this past March.
3. Immediate data on audience engagement.
As with all offline-to-online shifts, OTT video streaming captures dramatically more data on audience demographics and engagement than television does, and it does it in real-time. This makes it easier for emerging sports leagues to partner with advertisers and show immediate ROI on their sponsorships, plus it informs their understanding of how to produce their particular type of sporting event for maximum audience engagement.
Karate Combat is a year-old league that builds off the existing base of karate participants and fans around the world (numbering in the tens of millions) with a new competition format specifically intended for OTT. The league allows full-contact fighting and sets the match in a pit (rather than a traditional fighting ring) for better camera angles. It also replaces the traditional focus on having a big in-person audience (which is expensive) and instead sets the fights in exotic locations (like the fight this coming Thursday night on top of the World Trade Center).
Like many emerging sports leagues, Karate Combat is vertically integrated: the league organizing the competitions is also the one producing and streaming the event coverage over its website, mobile apps, and social channels. This not only means it captures the content-related revenue from subscribers, advertisers, and numerous OTT distribution partners, but it sees every data point about fans’ viewing behavior and their interaction with various dashboards (like biometrics on each fighter) so they can optimize both online and offline aspects of the production.
4. Online means interactive
Jujitsu fighting is now an OTT service. South_agency/Getty Images
Online viewing creates the opportunity for functionality you can’t achieve with linear TV: interactive displays overlayed on or next to live video. Viewers can pull up and click through real-time stats, change camera views, or switch overlays (think the the yellow first-down line in NFL broadcasts or coloring around a hockey puck to help you track it on the ice). Ultimately, a more interactive experience means a more social and more entertaining experience (and the sort of deep engagement advertisers value too).
FloSports’ ju-jitsu live streams (FloGrappling) give subscribers multiple live cameras each covering simultaneous matches on different mats so they can click between them. This is a more personalized experience than passively watching one broadcast on TV and it gets that subscriber actively engaged, with their behavior providing valuable data points for FloSports and their deeper interaction likely more compelling to event sponsors.
The display might also highlight live comments from friends or friends-of-friends in order to draw viewers into a more social experience. Discussion of a specific live stream with others watching it has been a central feature for Twitch and Facebook Live and enables the league or team streaming the event to directly engage with fans around the world.
An exception to the OTT-first strategy may be in sports that are entirely new and have zero existing base of participants or fans. Karate, surfing, and video-gaming all have millions of passionate participants around the world, going back decades. A new league like the 3-year-old Drone Racing League (DRL), which has raised $21M in venture capital to develop the sport of competitive drone racing, has to artificially stimulate the development of a fanbase if it doesn’t want to wait years for grassroots competitions to create a critical mass of fans even for a niche OTT service. It’s unsurprising then that DRL has focused on striking TV deals with ESPN, Sky Sports, ProSiebenSat.1, and others to thrust it in front of large audiences from the start, like a new game show hoping its format will entice enough people to take interest.
Power is in the hands of the league owners
Ari Emanuel, chief executive officer of William Morris Endeavor Entertainment. Jonathan Alcorn/Bloomberg via Getty Images
The best position to be in right now is the owner of a sports league that’s rapidly growing in popularity. The competition for audience by both traditional media companies and tech platforms leaves a long list of distribution partners eager for must-have, exclusive content – especially content like sports events that fans want to want live together – and willing to pay up.
Moreover, vertical integration to control your fans’ content viewing experience and own your relationship with them has never been easier. There are direct subscriptions, advertisers, event sponsors, event tickets, a portfolio of possible OTT distribution deals, and merchandising. The potential revenue streams a league can develop are only more numerous when you add in launching a fantasy sports league – like World Surf League has done – and the recent nationwide legalization of sports betting in the US.
Endeavor, the parent company of Hollywood’s powerful WME-IMG talent agency, seems to have recognized this and is an early mover in the space. It bought two sports leagues that have relied on TV deals and event attendance revenue – UFC for $4B and the smaller but rapidly growing Professional Bull Riders for $100M – and, since they each own their content, launched direct-to-consumer subscription platforms (UFC Fight Pass and PBR Ridepass) for super-fans and cord-cutters. (Endeavor also paid $250M to acquire Neulion, the technology company whose infrastructure powers the OTT services of the UFC, PBR, World Surf League, and dozens of others.)
There’s opportunity for new streaming platforms focused on being the media partner for these emerging sports leagues. Inevitably, the opportunity for bundling will consolidate many of the niche subscriptions onto a small number of leading sports OTT platforms, and that’s a powerful market position for those platforms.
What is unclear is if they can defend themselves as the incumbent media and tech companies come around to this phenomenon and commit billions toward capturing the market. The leading sports broadcasting companies all have OTT offerings and want to make them as compelling to potential subscribers as possible even if they exclude content from the biggest pro sports. A larger company that can afford to spend huge sums on exclusive sports streaming rights (like Disney with ESPN/ABC, Comcast with NBC/Sky Sports, CBS with CBS Sports Network, or Discovery with Eurosport) might opt to buy a company like FloSports as part of their deep dive into the space or they might just aim to outbid them when a league’s contract comes up for renewal.
The hope for an independent OTT platform devoted to emerging sports leagues is they get big enough, fast enough that they can afford to keep winning the rights to emerging leagues as those leagues grow and offers from competitors bid prices up. These dedicated OTT services will likely have to secure long-term – think ten years – streaming rights deals or acquire control of some popular new sports leagues outright to hold their own.
Like online distribution triggered an explosion of digital publishing brands and social influencers for every imaginable niche, the rise of high-quality live streaming and subscription OTT services will allow a lot more sports leagues to build an audience and revenue base substantial enough to thrive. There’s more variety for consumers and resources than ever for those with a rapidly growing league to attract fans worldwide.
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Facebook has signed a deal to stream 25 afternoon MLB games
Filed under moves that are potentially groundbreaking with big implications but with quite small numbers, Facebook has signed an exclusive deal with the MLB to stream 25 afternoon games, according to Bloomberg. The deal is a bit reminiscent of the one Twitter signed for Thursday Night Football back in 2016 to stream games that are outside of the range of primetime football (usually reserved… Read More
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Too much big data running through my brain
Big Data by all accounts is supposed to help humans perform better by augmenting our limited brain power. Computers, after all, have the ability to crunch data with lightning speed, something humans just haven’t been built to do. Conventional tech wisdom states that the more data you have, the better the outcome — even if that sounds counter-intuitive. That’s the thinking… Read More
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Four Reasons Why Sports Startups Are Scoring Big
When a professional sports team wins a title, it makes the front page of The New York Times. When Tom Brady, quarterback for the New England Patriots, controversially may (or may not) have deflated some footballs during a crucial game against the Indianapolis Colts, it was reported by every news media and became a trending topic on Twitter. Sports are a major part of our culture, and its… Read More
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